As with so many other situations involving California’s employment laws, its protection for California-based employees experiencing a job loss is broader than the protections under federal law.  In The International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, Local 998, et al. v. Nassco Holdings Inc., et al., the California Court of Appeal, Fourth Appellate Division held, among other things, that California’s version of the Worker Adjustment and Retraining Notification (“WARN”) Act is broader than its federal counterpart.

The specific issue the court addressed was whether a furlough of several weeks constituted a “layoff” for purposes of a “mass layoff,” triggering the 60-day notice period when 50 or more employees at a covered establishment experience a “layoff” during any 30-day period.  The defendant argued unsuccessfully that no notice was required because its work stoppage was only for a brief period and therefore its action was not a “layoff” or “mass layoff.”  By contrast, the plaintiffs argued that notice was required because the statutory phrase “mass layoff” has no temporal limitation and includes the type of temporary layoffs that occurred, i.e., no termination, only a temporary separation from the position for lack of funds or lack of work.

In siding with the plaintiffs, the court relied upon the plain meaning of the statute, in addition to its recognition that the California Legislature specifically passed its WARN Act to provide broader protections for California employees.  The court noted, among other things, the following differences between the federal WARN Act and the California counterpart:

  • Under the California WARN Act, attorneys’ fees are awarded only to the prevailing plaintiffs (not to prevailing defendants as under federal law);
  • Part-time employees are included for purposes of calculating whether a mass layoff occurred (federal law expressly excludes these employees);
  • The notice must be given directly to employees (not just to employee representatives as under federal law) and to a broader scope of local officials and agencies; and
  • The California WARN Act’s exceptions for “physical calamity or act of war” is more limited than the federal WARN Act exception for “business circumstances that were not reasonably foreseeable as of the time that notice would have been required.”

Bottom Line

A California employer must comply with both federal and state law and be aware that state law may provide employees greater protections than exist under federal law.  In this instance, a California employer who is going to have a furlough or a temporary layoff of even a few weeks that would affect 50 or more employees in a 30-day period must provide the appropriate WARN notice under state law.

Bryan Cave LLP has a team of knowledgeable lawyers and other professionals prepared to help employers assess their obligations under both the federal WARN Act and the California counterpart. If you or your organization would like more information on either WARN Acts or any other employment issue, please contact an attorney in the Labor and Employment practice group.