Sixth Circuit: No Duty to Give Conditional WARN Act Notice Based on Speculation of Bankruptcy

Last month, the Sixth Circuit affirmed the summary judgment dismissal of a claim under the WARN Act brought by 75 former employees who complained about the defendant employer’s failure to give them 60 days advance notice of their mass layoff.   Pearce v. Faurecia Exhaust Systems, Inc.,No. 12-3984 (6^th Cir. 6-19-13).  The Court found that the employer was entitled to rely upon the unforeseeable business circumstances exception in the WARN Act.  The employees were notified of the immediate mass layoff on May 7 following the April 30 bankruptcy filing of Chrysler, the plant’s major customer.  The Court rejected the employees’ contention that the employer knew a few weeks in advance that Chrysler intended to file for bankruptcy because no such evidence had been presented beyond mere rumors and speculation.  The Court also rejected the employees’ contention that the employer should have given a conditional WARN Act notice because such notices are discretionary under 20 C.F.R. § 639.7.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.