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'WARN' Notices - Dreaded News for Employees

December 27, 2011
On Tuesday, Morgan Stanley notified the New York State Department of Labor that it plans to fire 580 employees in 4 Manhattan offices.  A WARN Notice delivered the bad news. The Worker Adjustment and Retraining Notication Act was enacted on 8/4/88 and became effective on 2/4/89.  WARN offers protection to workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. The notice must be provided to the following:  (i) affected hourly and salaried workers, as well as managerial and supervisory employees (or their representatives, such as a labor union);  (ii) the State dislocated worker unit;  (iii) the appropriate unit of local government. Covered Employers. In general, employers are covered by WARN if they have 100 or more employees, not counting employees who have worked < 6 months in the last 12 months, and not counting employees who work on average < 20 hours a week.  Private, for-profit employers and private, nonprofit employers are covered, as are public and quasi-public entities which operate in a commercial context and are separately organized from the regular government.  Regular Federal, State, and local government entities which provide public services are not covered. Trigger Event - A Mass Layoff. A covered employer must give notice if there is to be a mass layoff which doesn't result from a plant closing, but which will result in an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer's active workforce. If the number of layoffs that occur during a 30-day period doesn't meet the above threshold criteria, notices must still be given if the number of employment losses for 2 or more groups of workers, reaches the threshold level during any 90-day period.  Such job losses within any 90-day period generally will count together toward WARN threshold levels. When Notice is Not Provided. As in the case of MF Global, all firm employees were terminated, except for a skeleton crew who were needed to help the court-appointed trustee close down the operations.  MF Global tried to sell the business, but was unable to do so - which prompted it to file for bankruptcy protection on 10/31/11.  Shortly thereafter, all firm employees were laid off, without advance notice. Several employee lawsuits were filed by individual and groups of former employees, some of whom were seeking class action status.  MF Global's failure to comply with the WARN Act was cited in every complaint. For further details on the WARN Act, go to:  [U.S. DOL Employment and Training Administration Fact Sheet]. For further details on Morgan Stanley's plan to lay off 580 NYC employees, go to:  [C-I's 12/27/11 Posting in WHO].