Employment-at-will default rule
The United States follows employment-at-will as the common-law default: either the employer or employee may end the employment relationship at any time, for any lawful reason or no reason, without advance notice. All states except Montana recognize this doctrine. Federal statutes create specific exceptions prohibiting termination for certain reasons, including discrimination based on race, color, religion, sex, or national origin (Title VII of the Civil Rights Act); age 40 or older (ADEA); disability (ADA); retaliation for taking FMLA leave; engaging in protected union activity (NLRA); or reporting workplace safety violations (OSH Act). States may add additional statutory or common-law exceptions (public-policy violations, implied-contract exceptions).
WARN Act — 60-day notice for plant closings and mass layoffs
The Worker Adjustment and Retraining Notification Act (WARN), codified at 29 U.S.C. §§ 2101–2109 and implemented through regulations at 20 C.F.R. Part 639, requires covered employers to provide 60 calendar days' advance written notice before executing a plant closing or mass layoff. The Act's purpose is to give workers and their families transition time to seek alternative employment or enter retraining, and to allow state dislocated-worker units to provide assistance promptly.
Covered employers
WARN applies to private-sector employers (including nonprofits engaged in business) that employ either (i) 100 or more full-time employees, not counting employees who have worked fewer than 6 of the 12 months preceding the date notice is required or who work fewer than 20 hours per week on average, or (ii) 100 or more employees—including part-time workers—who in the aggregate work at least 4,000 hours per week, exclusive of overtime. Regular federal, state, local, and federally recognized tribal governments are excluded. Workers on temporary layoff or leave who have a reasonable expectation of recall are counted toward the 100-employee threshold.
Triggering events — plant closing and mass layoff
A plant closing occurs when an employer shuts down a single site of employment, or one or more facilities or operating units within a single site, resulting in an employment loss (defined as termination other than for cause, voluntary departure, or retirement, or a layoff exceeding six months, or a reduction in hours of work of more than 50% during each month of any six-month period) for 50 or more full-time employees during any 30-day period.
A mass layoff (not resulting from a plant closing) occurs when an employment loss at a single site during any 30-day period affects either (i) at least 50 full-time employees if they constitute at least 33% of the workforce at that site, or (ii) 500 or more full-time employees, regardless of percentage. Employers must aggregate employment losses occurring within any 90-day period unless the employer can demonstrate that the separate actions resulted from separate and distinct causes and were not an attempt to evade WARN's requirements.
Notice recipients
The employer must provide written notice to (1) each affected employee or the representative (union) of affected employees, (2) the state dislocated worker unit, and (3) the chief elected official of the unit of local government where the employment site is located. Part-time employees are entitled to receive notice even though they do not count toward the numerical thresholds for triggering WARN.
Exceptions permitting reduced notice
The 60-day notice period may be reduced (but the employer must give as much notice as is practicable and include a brief statement explaining the basis for the reduction) under three narrow exceptions: (1) the faltering company exception (applies only to plant closings, not mass layoffs), where the employer was actively seeking capital or business and reasonably believed in good faith that giving notice would have precluded obtaining the needed capital or business; (2) the unforeseeable business circumstances exception, covering closings or layoffs caused by sudden, dramatic, and unexpected conditions outside the employer's control (examples in 20 C.F.R. § 639.9(b)(1) include a principal client's sudden and unexpected termination of a major contract, a strike at a major supplier, or an unanticipated and dramatic major economic downturn); and (3) the natural disaster exception for closings or layoffs that are the direct result of a flood, earthquake, drought, storm, tsunami, or similar event.
Enforcement and remedies
WARN is enforced exclusively through private civil actions in federal court; the U.S. Department of Labor has no enforcement role and will not issue advisory opinions on specific cases. Affected employees, their union representatives, and units of local government may sue. An employer who violates WARN by failing to provide the required notice is liable to each affected employee for back pay and benefits (including the cost of medical expenses incurred during the violation period that would have been covered under an employee benefit plan) for each day of the violation, up to 60 days. Employers may also face a civil penalty of up to $500 per day for each day of violation, payable to the unit of local government, though this penalty may be reduced or eliminated if the employer satisfies liability to each affected employee within three weeks of the plant closing or mass layoff.
Relationship to state mini-WARN laws
WARN does not supersede state or local laws or collective bargaining agreements that provide for additional notice, longer notice periods, or additional remedies. If a state or local law (often called a "mini-WARN" statute) requires a longer notice period, the WARN notice runs concurrently with that period; employers must comply with the more protective law. States with expanded WARN-type statutes include New York (90-day notice for employers with 50 or more full-time workers in the state, affecting 25 or more employees), California, Illinois, New Jersey, and others.
Source: 29 U.S.C. § 2101 et seq. (WARN Act statute) Source: 20 C.F.R. Part 639 (WARN regulations)