THE WARN ACT AND ITS LEGAL HISTORY

Abstract

After a long period of period of sustained economic growth, the U.S. economy has experienced a recession and remains sluggish, and layoffs and plant closings are on the rise. Consequently, it is prudent to review the relevant plant-closing legislation (Worker’s Adjustment and Retraining Act), attendant regulations, and subsequent court interpretations. Some seventy appeals court and Supreme Court cases were identified and reviewed. While there are several legal pitfalls firms must avoid to comply with the act, a variety of options are available to organizations that will not force them to meet the act’s 60-days notice requirement. After the longest growth period in American history, the U.S. economy went into recession in the third quarter of 2001 and then came the aftershocks of the attacks of September 11, and the Enron and WorldCom scandals. These events, among others, have led to layoffs in a host of industries. While the economy has shown some improvement, it remains sluggish and layoffs abound. Business bankruptcies are at an all-time high [1] and in the July of 2003 government report, unemployment was over 6% [2]. Interestingly, a seldom-studied federal statute, the Worker Adjustment and Retraining Notification Act (WARN), was enacted by Congress more than 10 years ago to address plant closings and mass layoffs in the United States. This