Laid-off white-collar workers are using an obscure 20-year-old plant-closing law to sue their former employers for severance pay.
The federal Worker Adjustment and Retraining Notification Act, or WARN, requires employers to either give a full 60 days notice before engaging in a mass layoff, or to pay dislocated workers 60 days of wages and benefits, including health insurance premiums.
WARN has been generally ignored by employers, and the Department of Labor has no power to enforce it. But some states have already adopted their own, tougher versions, and labor advocates could push for a tightening of the law in the next Congress. In 2007 President-elect Barack Obama co-sponsored such legislation..
Meanwhile, employees have one remedy under the existing federal WARN law: filing a class action suit seeking back severance pay, plus attorney's fees.
The New York City employment law firm of Outten & Golden has filed WARN lawsuits on behalf of ex-employees of Lehman Brothers, clothing retailer Steve & Barry's, and Bill Heard Chevrolet, formerly the nation's largest chain of Chevy dealerships. In all, the law firm now has 25 WARN suits pending