Business course

Orlando hotel industry settles WARN Act class action claims for $2.3 million

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Diving brief:

  • Rosen Hotels and Resorts, an Orlando-based hotel system, has preliminarily settled class action lawsuits brought by a plaintiff and 3,631 other employees through the Worker Retraining Adjustment and Notification Act. A judge approved the $2.3 million deal August 2nd.
  • According to the complaint, hotel employees were placed on temporary leave in April 2020 (Turner vs. Rosen Hotels and Resorts, Inc., no. 6:21-cv-00161 (MD Florida 22 January 2021)). They remained on furlough for six months without receiving notification of their employment status, according to the complaint. The workers suffered “job loss” in the mass layoff and did not receive the 60-day written notice to which they were entitled under the WARN Act, according to the complaint.
  • In addition to failing to provide the workers with notice to leave, the hotel system failed to provide them with pay or benefits for 60 days after their respective layoffs exceeded six months, according to the complaint.

Overview of the dive:

The The WARN Act requires employers of at least 100 full-time workers to provide 60 days’ notice if they plan to subject 50 or more people at a single site to job loss, which is defined as termination, layoff of more six months or a 50% or greater reduction in hours in each month of a six month period.

The law aims to help workers transition from their laid-off position to a new role. Under the Workforce Investment Act, each state has a rapid response team whose assistance is triggered upon receipt of a WARN Act notice. The team assists workers in their career transition by coordinating with the employer to provide job search and placement assistance and on-the-job or classroom training, among other resources.

WARN’s applicability can be tricky for employers; temporary, part-time and government employees are not protected by its provisions, for example, and workers are also excluded if they are offered a transfer to a site within reasonable commuting distance or if they suffer a break of up to six months. Additionally, an employer can lay off 50 to 499 workers at a site without triggering WARN Act requirements if that number is still less than one-third of its workforce.

The influence of COVID-19 on WARN law enforcement has been a question on the minds of employers following mass layoffs at the start of the pandemic – especially since the law provides an exception to the policy. 60 days’ notice for layoffs resulting from natural disasters. Recently, however, the 5th US Circuit Court of Appeals estimated that the pandemic could not be considered a natural disaster for the purposes of the law.