Be Fore-WARNed: California Really Is Peculiar

Seyfarth synopsis: Companies contemplating a mass layoff must comply with the federal Worker Adjustment and Retraining Notification Act. In California, alas, companies must also consider the even more stringent requirements of California's own WARN act. That is the harsh lesson recently imparted by the California Court of Appeal in Boilermakers v. NASSCO Holdings Inc.

As just reported in our management alert, a California shipyard sustained liability when it failed to notify 90 employees of a four- to five-week furlough occasioned by a lull in their production work. Under the federal WARN act, no notice was required, because fed-WARN requires notice only for a "plant closing" or a "mass layoff," and the latter refers only to an "employment loss," which is either a termination, a layoff exceeding six months, or a 50% reduction in work hours during six consecutive months.