Employers Be Warned: Workforce Reduction Rules Meet New Workplace Definitions as Employees Go Remote

CitationVol. 2 No. 4
Publication year2022

Juan Enjamio and Steven DiBeneditto *

Abstract: The pandemic-inspired remote and hybrid workforce economy raises novel legal issues every day. An employer with hybrid or remote employees, for example, faces new questions when contemplating a workforce reduction given the notice requirements of the WARN Act. The Act's provisions apply only to "single sites of employment" though, which has traditionally meant physical buildings. Given this "single site of employment" definition, is the WARN Act suited to address the new worker paradigm? In this article the authors provide useful background on the WARN Act and assess for employers and employment attorneys its application in today's economy and in legal disputes.

Introduction

A common sentiment during the COVID-19 pandemic was that a different society would emerge from its ashes. While overstated in many cases, one segment of society that appears to have changed for good is the white-collar workplace. Indeed, after enjoying the flexibility of working from home for more than two years, many white-collar workers are demanding that a remote work option remain a permanent fixture at their place of employment. And, with seemingly no negotiating leverage due to worker shortages across the country, employers have mostly acceded to these demands, with many opting to implement a "hybrid" workforce where employees

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work from home for part of the workweek and travel to a physical workplace for the rest of the week. Other employers have opted to have employees work entirely from home in what is now generally known as a "remote" employee.

But widespread adoption of a hybrid workforce presents a complex set of legal challenges for employers. These challenges are especially prevalent when making employment decisions using laws that were drafted decades ago to a new workplace that was never considered during the laws' enactment. Nowhere is this problem more apparent than with the Worker Adjustment and Retraining Notification (WARN) Act, a statute adopted nearly four decades ago in 1988. Simply put, the WARN Act sets forth notice requirements for employers who plan to close a plant or implement a reduction in force. Yet the WARN Act's reduction in force provisions apply only to "single sites of employment," which has been traditionally understood to mean a physical building or a group of buildings in contiguous locations. This single site of employment definition makes the WARN Act ill-suited to address the emerging (but ubiquitous) issue of workers who are dispersed, e.g., remote and hybrid workplaces.

With that in mind, this article seeks to highlight the issues with the WARN Act and remote and hybrid workplaces and package them into a guide for employers. The article begins by summarizing the WARN Act and the regulations for single sites of employment. It then shifts to a recent district court case analyzing the issue of remote work under the WARN Act for purposes of Rule 23(b)(3)'s predominance requirement for class certification. The article concludes by offering some suggestions to help prevent WARN Act liability.

The WARN Act and Single Sites of Employment

The WARN Act requires covered employers to give employees at least 60 days' notice when closing a plant or conducting a "mass layoff" at a "single site of employment." 1 Under the WARN Act, a "mass layoff" is a reduction in force that is (1) not the result of a plant closing, (2) results in an employment loss at a single site of employment during a 30-day period for (a) at least 33 percent

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of the active employees (excluding part-time employees) and 50 employees (excluding part-time employees) or (b) 500 or more employees (excluding part-time employees). 2 As noted previously, a "single site of employment" has been traditionally understood to mean either a single physical location or a group of contiguous physical locations. 3 The question then is whether a hybrid or remote workplace is considered a "single site of employment" triggering notice requirements for mass layoffs under the WARN Act.

Any court answering this question will likely look to Subpart 6 of 20 C.F.R. § 639.3, the Department of Labor's WARN Act regulations for defining single sites of employment. Under Subpart 6, employees without a traditional worksite can be covered under the WARN Act in certain circumstances:

(6) For workers whose primary duties require travel from point to point, who are outstationed, or whose primary duties involve work outside any of the employer's regular employment sites (e.g., railroad workers, bus drivers,
...

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