No WARN for Layoffs at Non-Contiguous Facilities

November 13, 2009
Two former drivers for DHL Express, John Ellis and Timothy Price, filed suit against the company in Illinois district court for alleged violations of the Workers Adjustment and Retraining Notification Act after the company ended its domestic air and ground services and terminated more than 200 full-time workers at six separate Chicago-area facilities.

The WARN Act requires that an employer give employees 60 days’ notice of a “plant closing” or “mass layoff.” The act defines “mass layoff” as a loss of employment at a single site that affects 500 or more full-time employees or at least 50 full-time employees, if they make up at least 33 percent of the full-time workforce, in a 30-day period.

The court held that the six facilities did not constitute a single site of employment. Deferring to the Department of Labor’s interpretation, which describes such covered establishments as “either a single location or a group of contiguous locations” in “the same reasonable geographic proximity, used for the same purpose, and [that] share the same staff and equipment,” the court decided that the six facilities, which were located several miles apart, lacked the geographic proximity needed to trigger the WARN Act.

The court also found that employees who accepted the company’s voluntary separation program, through which they waived reinstatement rights in exchange for a four-week (or, in some cases, 10-week) severance package, should not be counted as a part of the employment loss. It reasoned that none of the employees had been subjected to a threat of a hostile or intolerable work environment. Ellis v. DHL Express, N.D. Ill., No. 1:08-cv-6541 (9/21/09). Impact: Employers are advised to review applicable WARN regulations—together with employee proximity, purpose and use of equipment—to assess WARN Act applications.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.