Planning For The Rebound: Step 19 – Are Future Layoffs “Unforeseeable” Under Cal-WARN?
As we previously reported, on March 17, 2020, California Governor Gavin Newsom Issued Executive Order No. N-31-20 (the “Order”), which suspended the 60-day notice and penalty portions of California’s Worker Adjustment and Retraining Notification (“Cal-WARN”) Act beginning March 4, 2020 “through the end of this emergency.”
While the Order was a welcome act for many employers facing immediate layoffs, it’s uncertain whether the Order will continue to benefit employers in the coming months.
Are COVID-19 Layoffs “Unforeseeable” Anymore?
The relaxed notice requirement only applies to employers who have had to undertake a mass layoff or close due to “COVID-19 related ‘business circumstances that were not reasonably foreseeable as of the time that the notice would have been required.’” In the past, sudden, dramatic, and unexpected actions or conditions outside an employer’s control indicated business circumstances that were not reasonably foreseeable. However, as the COVID-19 pandemic stretches into additional months, and employers continue to operate in a post-COVID-19 world, are future layoffs truly unforeseeable?
Undoubtedly, the answer to this question depends on the industry the employer is operating in, as well as other salient facts. Nonetheless, the leeway the Order initially provided to employers at the outbreak of the pandemic seems less applicable as the U.S. enters its sixth month of dealing with the crisis.
For example, while restaurants may be surviving on pick-up and delivery orders, can a restaurant employer plausibly claim two weeks from now that their mass layoff or closure was unforeseeable?
This simple example highlights the potential issues employers should be aware of when contemplating widespread layoffs at this stage of the pandemic. If an employer realistically concludes that they will need to lay off a large portion of their workforce within the coming months due to COVID-19’s effect on its business, the employer should immediately issue notice to employees.
What is “Practicable” Notice In Light of the Ongoing Pandemic?
While the Order may have suspended the rigid 60-day notice period of Cal-WARN, the Order still requires employers to “give as much notice as is practicable” to employees. Unfortunately, there is no formula for employers to use to calculate “practicable” notice.
Instead, determining whether notice was given as soon as practicable is a highly fact-intensive analysis that focuses on: (1) any delay by an employer in giving notice to employees, and (2) the amount of notice given to employees prior to termination. In some scenarios, courts have held a one-week delay of notice to be too long, while in other cases a month-long delay has been deemed appropriate.
To not run afoul of Cal-WARN, employers should strive to inform employees quickly after reaching the decision that a mass layoff or closure will take place. In addition, an employer’s notice should be provided to employees as far in advance of the effective date of the layoff or closure as possible.
If you are an employer considering a mass layoff or closure in the coming weeks or months due to COVID-19, we recommend working closely with counsel to ensure proper notice is timely provided to effected employees.
Questions about COVID-19 and the workplace? Contact the Hirschfeld Kraemer lawyer who normally provides your legal advice, or you can reach out to Michelle Freeman in Hirschfeld Kraemer’s San Francisco office, email@example.com, (415) 835-9003.
Did you miss previous posts in our Planning For The Rebound series? Click on the links below:
Step 1 – Requirements For Returning To The Workplace
Step 2 – Do I Have To Bring Back Furloughed or Laid-Off Employees?
Step 3 – Do Employers Need to Bring Back Under-Performers?
Step 4 – Ready To Go Back To Work? Not So Fast …
Step 5 – Passing the Test: COVID-19 Screening in the Workplace
Step 6 – Deciding Which Employees Can Return To The Workplace
Step 7 – Workplace Safety: Posters Are Not Enough
Step 8 – Safety Tips For Allowing Vendors and Visitors Into Your Workplace
Step 9 – Meal and Break Room Safety
Step 10 – Hygiene Tips For A Safe, Clean Workplace
Step 11 – A Workable Plan For Social Distancing
Step 12 – Dealing With Requests To Work Remotely: Separating Facts From Fear
Step 13 – Is Work Travel A Thing Of The Past?
Step 14 – New Hires and Offer Letters During COVID-19
Step 15 – Addressing Employee Return-To-Work Anxieties
Step 16 – Managing Employee Performance During COVID-19: Not “Business As Usual”
Step 17 – Severance Pay Considerations
Step 18 – Getting Ready For The Terrible, Horrible, No Good, Very Bad Fall Outbreak
For additional employer-focused information about COVID-19:
Click here to see the Hirschfeld Kraemer EMPLOYER’S GUIDE TO CORONAVIRUS