Labor Law -- 2017

International Brotherhood of Boilermakers v. NASSCO Holdings Inc.   (Cal. Ct. App.)

Notice requirements under the California WARN Act

The NAM, along with a group of other associations, filed a brief concerning the California WARN Act, which requires employers to provide 60 days’ notice before any “mass layoff, relocation, or termination.” An employer who fails to provide notice is liable to each affected employee for back pay and lost benefits, and for civil penalties. The NAM's brief argued that the court erred by reading “layoff” in the Act to include a furlough — a brief break during which about 90 employees (less than 3% of NASSCO’s workforce) did not earn wages but nevertheless remained as NASSCO employees.

As way of background, the federal WARN Act (on which the California Act is based) imposes similar notice requirements but only on employers whose actions affect 100 or more employees before a “plant closing or mass layoff.” This appeal raises a question about the application of the California WARN Act to employees who would not be covered by the federal WARN Act. This is an important case for all California manufacturers, particularly those with cyclical employees or staffing requirements that ebb and flow.

Unfortunately, the California Court of Appeal affirmed the superior court’s decision, requiring an employer to provide 60 days notice prior to a mass layoff, even if the layoff is not permanent and is for less than six months.

Related Documents:
NAM amicus brief  (May 1, 2017)


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