Orlando hotel business settles class-action WARN Act claims for $2.3M

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Dive Brief:

  • Rosen Hotels and Resorts, an Orlando-based hospitality system, has preliminarily settled class-action claims brought by a plaintiff and 3,631 other employees through the Worker Adjustment and Retraining Notification Act. A judge approved the $2.3 million deal August 2.
  • According to the complaint, hotel workers were put on a temporary furlough in April 2020 (Turner v. Rosen Hotels and Resorts, Inc., Well. 6:21-cv-00161 (MD Fla. Jan. 22, 2021)). They remained on furlough for six months without receiving notification of their employment status, the complaint said. The workers suffered “employment loss” as part of the mass layoff, and did not receive the 60 days’ advance written notice to which they were entitled under the WARN Act, the complaint alleged.
  • In addition to failing to provide workers with notice of furlough, the hotel system did not provide them with pay or benefits for 60 days following their respective layoffs exceeding six months, the complaint alleged.

Dive Insight:

The The WARN Act requires employers with at least 100 full-time workers to provide 60 days’ advance notice if they plan to submit at least 50 people at a single site to an employment loss, which is defined as a termination, a layoff exceeding six months or a 50% or greater reduction in hours during each month of a six-month period.

The law is intended to help workers transition from their terminated position to a new role. Under the Workforce Investment Act, each state has a designated rapid response team whose assistance is triggered upon receipt of a WARN Act notice. The team helps workers with their career transition by coordinating with the employer to provide job search and placement assistance and on-the-job or classroom training, among other resources.

The applicability of the WARN Act can be tricky for employers; temporary, part-time and government employees are not protected under its provisions, for example, and workers are also excluded if offered a transfer to a site within reasonable commuting distance or sustaining a break of no more than six months. In addition, an employer may lay off 50-499 workers at a site without triggering the WARN Act requirements if that number is still fewer than one-third of its workforce.

The influence of COVID-19 on the WARN Act’s application has been a question on employers’ minds in the wake of mass layoffs early in the pandemic — particularly as the act has an exception to the 60-day notice policy for layoffs resulting from natural disasters . Recently, however, the 5th US Circuit Court of Appeals held that the pandemic could not be considered a natural disaster for the purposes of the act.

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