Mass layoffs at Twitter and other companies could lead to a surge in lawsuits under the federal Worker Adjustment and Retraining Notification (WARN) Act. Complaints alleging WARN Act violations have risen since Q1 2022 after cooling for the better part of 2021, according to a Bloomberg Law analysis of federal district court dockets.
Twitter faced two class WARN Act complaints in Q4 2022 alone after announcing a bout of layoffs in November, and two more were filed against the tech giant just last month.
Other companies haven’t been immune from WARN claims—new filings rose for most of 2022. As layoffs are increasing across multiple industries in the US (and worldwide), so too are the number of WARN claims. Since WARN claims stem from mass layoffs, it makes sense the two statistics could be related.
In the past three quarters, new complaints remained relatively high, with 14 in Q3 2022, 12 in Q4 2022, and 14 in Q1 2023—the quarter with most recent data. New complaints in Q3 2022 and Q1 2023 are the highest since early 2019.
Unlike 2020—when employers saw relatively few WARN claims despite massive job losses at the height of the Covid-19 pandemic—WARN Act exceptions for temporary furloughs and layoffs caused by “unforeseeable business circumstances” aren’t at play anymore.
The federal WARN Act generally requires employers to provide workers with at least 60 days’ notice when they conduct mass layoffs or plant closings or face liability for lost wages and benefits.
Some states, including California and New York, also have their own “mini” WARN laws, though filings under state laws were not considered in this analysis.
More claims based on WARN violations may already be in the works, given the practical delay between the occurrence of alleged employer misconduct and the filing of a lawsuit. If the recent patterns of WARN filings going up or down based on layoffs or job growth continue, we should expect WARN claims to remain high through Q2 2023 and possibly beyond.
Bloomberg Law subscribers can also find related content, including our new In Focus: Layoffs page.
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