California Governor Temporarily Suspends Notice Requirements of California WARN Act

Given the current public health crisis caused by COVID-19, many California employers are facing the prospect of temporarily shutting down their businesses. The question that many employers have had, however, is whether such shutdowns are implicated by the federal or California Worker Adjustment and Retraining Notification Act (“WARN”). Generally speaking, both the federal and California WARN require employers of certain sizes to provide their employees with at least 60 days’ notice prior to moving forward with mass layoffs, suspensions of operations, or plant closings. Both versions of WARN also provide for penalties to the extent such notice is not provided.

As it relates to temporary shutdowns, the federal WARN only covers such shutdowns if they extend for longer than six months. The federal WARN also allows employers to provide less than 60 days’ notice in instances of “unforeseen business circumstances” so long as they provide as much notice as practicable and explain in the notice why less than 60 days’ notice is being given.

The problem facing California employers is that California’s version of WARN contains no such limitations or clear exceptions for the current crisis. These facts placed California employers on shaky ground in terms of potential liability.

In order to alleviate these concerns, on March 18, 2020, California Governor Gavin Newsom issued an Executive Order temporarily suspending the notice requirements of the California WARN. Specifically, the 60-day notice requirements are suspended for the period that began March 4, 2020 through the end of the current emergency on the condition that California employers do the following:

• Provide the written notice required by WARN;
• Provide as much notice as practicable and a brief statement of the basis for reducing the notification period;
• Order the action based on COVID-19 related unforeseeable circumstances; and
• Provide the following statement: “If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019.”

For California employers facing the prospect of shutdowns, this Executive Order provides certainty regarding their liability (or lack thereof) under WARN. With that being said, California employers instituting shutdowns must still be sure that their notices provide all of the information required by WARN.