Third Circuit Holds No Need to Warn Under WARN ACT Unless Circumstances Causing Layoff Are Probable

August 16, 2017

The Worker Adjustment and Retraining Notification (WARN) Act in the U.S. requires that employers give sixty days’ notice to its employees before effecting a mass layoff. The WARN Act contains exceptions to the notice requirement, including the “unforeseeable business circumstances” exception, excusing notice if “the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable as of the time the notice would have been required.” What exactly constitutes reasonably foreseeable – is it once the layoff becomes probable (more likely than not) or is it if there is a foreseeable possibility that a layoff may occur? The Third Circuit recently answered this question with the former, finding that a probability of layoffs is necessary to trigger WARN Act notice requirements in Varela v. AE Liquidation, Inc. (In re AE Liquidation, Inc.).

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