Many Exceptions, Few Teeth in Mass Layoff Notification Law
Twin announcements made public Tuesday of significant layoffs at companies in the Twin Cities highlighted what some call the "Swiss cheese" quality of a federal labor law, which was enacted to provide workers with "protection to workers, their families and communities," but in practice, experts say, has left nearly 600 Minnesota workers - and the state - this week almost completely in the dark.
"It's like a piece of Swiss cheese," remarked employment attorney Marshall Tanick, who brought the first lawsuit on behalf of a Minnesota employee based on the federal Worker Adjustment and Retraining Notification (WARN) Act, which generally requires companies about to commence mass layoffs to give the state 60-day notice.
"It has very little substance to it and it provides very little protections to workers," said Tanick.
Employers with 50 workers or more are required to report large layoffs to the state Dislocated Worker Program, which can then reach out to affected employees with job search assistance and retraining opportunities.
Through the end of April, 1,775 Minnesota workers had been part of a mass layoff WARN notice, according to figures compiled by the state Department of Employment and Economic Development. That's down 16 percent from the same time period last year.
On Tuesday, Medtronic announced 500 layoffs in Minnesota during its morning earnings call with analysts, but as of the end of the day had still not yet given the state of Minnesota such notification, according to Anthony Alongi, the director of the DEED's Dislocated Worker and Trade Adjustment Assistance programs.
Alongi's office did receive a WARN Act notice from Highway Technologies, which abruptly closed its Minneapolis facility, laying off all 74 employees with no notice ahead of time to them or the state. The state made the letter, dated Friday and marked 'via overnight mail,' available Tuesday.
"We are attempting to make contact with the company to confirm some details," Alongi said in an email, but also found "the company's language in this letter is consistent with exception language in the WARN Act."
The company cited two of the Act's three main exceptions: unforeseeable business circumstances and a faltering business outlook. The unsigned letter stated the Houston-based company "must take immediate and drastic measures to curtail its operational expenses as a result of business circumstances that were not reasonably foreseeable prior to this action."
In addition, the company wrote that it "believed that giving the WARN notice earlier than today would have precluded the Company from obtaining the needed financing capital or business."
Tanick believes companies fear little punishment for not fulfilling the WARN Act's notification provisions.
"It's a very rare instance in which either the state or the affected employees have the time, the money, and the desire to fight those inadequate notices. So most time, employers get away with it," Tanick said.