The WARN Act – Wrongful Layoff
After a recent massive lay off at Telltale Games, a former worker is now pursuing a class action lawsuit against Telltale Games on the basis that the company violated federal law known as the WARN Act when it terminated hundreds of workers before closing the gaming studio. This claim represents an example of just one of the many ways in which wrongful termination or wrongful layoff claims are initiated.
The Basis of the Class Action
Initiated in California federal court, the class action lawsuit brought by recently terminated workers, claims that workers were let go without cause and they were not provided with advance written notice as required by the WARN Act. Additionally, the workers were not provided any type of severance. Instead, the workers will only receive health benefits until the end of September, 2018. The total number of workers terminated by Telltale is 275 individuals, which includes a group of 250 employees that were laid off on September 21, 2018 and a skeleton crew of 25 individuals who were terminated later on.
What is the WARN Act?
The Worker Adjustment and Retraining Notification (WARN) Act became law in 1988 and requires companies with 100 or more full-time workers to notify workers at least 60 days before any mass layoffs or plant closings or face liability for wrongful layoff. For the purposes of WARN, a mass lay-off includes the reduction of 50 or more workers within a 30-day period. Companies that violate the WARN Act are required to provide affected workers with back pay and benefits for each day that the violation impacted them. If it is determined there was a wrongful layoff – meaning Telltale is determined to have violated the WARN Act, it will be required to provide at least 275 workers with pay and benefits for the 60 days following their termination. In addition to this federal version of the WARN Act, California has a similar state law enacted in 2003 and requires companies with 75 full-time or part-time workers who are planning to reduce at least 50 workers to provide this type of notification or face wrongful layoff claims.
The Future of the Case
The federal WARN Act acknowledges an exception of the 60-day advance notice act for companies who faced circumstances that were not reasonably foreseeable. While courts have interpreted this foreseeability category in a narrow group of circumstances, Telltale Games will likely argue that it was forced to close when its last backer pulled out. While it remains uncertain how this case will resolve for Telltale, the company will likely have a difficult time defending the termination of workers under California’s version of the WARN Act. Also, while the federal WARN Act acknowledges this foreseeability exception, California law does not.
Speak with an Experienced Employment Lawyer
If you are a worker who believes that he or she was wrongfully terminated by an employer or have been the subject of a wrongful layoff, you should contact an experienced labor lawyer. Contact Herrmann Law today to schedule a consultation during which time we will outline your various available options.