Mass Layoffs/Plant Closings

New Jersey Warn Act And Federal Warn Act
(Plant Closing Laws)

On December 20, 2007, New Jersey enacted a plant closing law that is similar to the federal Workers Adjustment and Retraining Notification Act (WARN), but imposes additional burdens on NJ employers. Like WARN, the Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN) requires employers to give 60 days notice to employees in the event of a plant closing or mass layoff, but imposes other obligations that are more restrictive. Highlighted below are some key similarities and differences between the two laws:

WARN
NJ WARN
Employers Covered 100 or more full time & part-time (20 hours/week) employees100 or more full time employees
Notice Period 60 days advance notice60 days advance notice
Reasons for Notice
  • Plant Closing (50 or more employees laid off for 30 days or more);

  • Mass Layoff (500 or more employees for 30 days or more or more than 50 employees if they make up at least 33% of the workforce)

  • Termination or transfer of operations (permanent or temporary shutdown of single establishment, facility or operating unit including termination of 50 or more full time employees during any 30 day period);
  • Mass Layoff (RIF related to transfer or termination of operations, including termination during any 30 day period of 500 or more full time employees or 50 or more full time employees representing at least 1/3 of full time employees at location)
Parties to Notify
  • Affected employees (nonunion),

  • Union president,

  • State Rapid Response Dislocated Worker Unit,

  • Chief elected official of municipality where business is located.
  • Affected employees (union & non-union),

  • Union representatives,

  • NJ Commissioner of Labor and Workforce Development,

  • Chief elected official of municipality where business is located.
Exceptions - No Notice Required
  • Faltering company,

  • Unforeseeable business circumstances,

  • Natural disaster

  • Strike or lockout

  • Sale of business
  • Temporary facilities or end of project

  • Termination of operations necessary due to fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage

  • Facilities operating 3 years or less
Content of Notices
  • Name & address where mass layoff or plant closing will occur,

  • Name & telephone number of company contact person,

  • Whether employment loss will be temporary or permanent & whether entire plant will close,

  • Expected date of 1st job losses, & schedule of any further reductions (for individual employees - anticipated date of job loss),

  • Job titles of affected positions &number of affected employees in each category,

  • Bumping rights, if any, and

  • Name of all union/employee representatives & name & address of chief elected officer of each union
  • Number of employees to be terminated,

  • Date of transfer or termination of operations or mass layoff,

  • Date of each termination;

  • Reasons for transfer or termination of operations or mass layoff;

  • Other available employment with employer;

  • Employee termination rights regarding wages, severance pay, benefits, pension, etc.;

  • Amount of severance pay due as a penalty if employer failed to provide required 60 days’ notice;

  • Employees’ right to receive information, referral, and counseling from Department of Labor & Workforce Development’s response team
Penalties
  • Inadequate notice to employees - back pay and benefits for period of violation, up to 60 days less any wages employer paid employee during notice period

  • Inadequate notice to local government - civil penalty of up to $500 for each day of violation except if employer pays each employee total due within 3 weeks after employer orders closing or layoff
  • Inadequate notice to employees - severance pay equal to one week of pay for each full year of employment (no reduction for partial compliance) - no limit;

  • Employers can offset WARN penalties but not severance due under policy or contract (no express prohibition offsetting severance under policy or contract against WARN penalties)
Enforcement Individual or class action suits by employees, unions or local government in US district court, attorneys’ fees if prevailCivil law suits by employees, unions or local government in NJ Superior Court, attorneys’ fees if prevail

Practice Pointer: Because NJWARN is relatively new, employers can anticipate much litigation, particularly where definitions and requirements differ between NJWARN and federal WARN. Before implementing any plant closing or large scale RIF, speak to qualified counsel. Employers with written severance policies should ensure that their policy states that all severance benefits are reduced by the amount of any NJWARN severance penalties.

For additional information on this topic, please contact Douglas S. Zucker at DSZ@zuckerhatfield.com or Kathryn V. Hatfield at KVH@zuckerhatfield.com.