No Natural Disaster Exception to WARN Act Requirements for COVID-19

The U.S. Court of Appeals for the Fifth Circuit held that COVID-19 does not qualify for the natural disaster exception to the notice requirements for mass layoffs under the Worker Adjustment and Retraining Notification (WARN) Act.

The WARN Act requires employers with 100+ employees to provide at least 60 days’ notice of mass layoffs meeting certain thresholds. There are several exceptions to the notice requirement, including where the layoff is due to a natural disaster. The Department of Labor’s regulations implementing the WARN Act defines “natural disasters” as “floods, earthquakes, droughts, storms, tidal waves or tsunamis and similar effects of nature.”

In Easom v. US Well Services, Inc., a hydraulic fracking company invoked the natural disaster exception when it laid off employees due to a dramatic drop in customer demand for oil and gas resulting at least in part from the COVID-19 pandemic. The Fifth Circuit, however, found that COVID-19 is not a natural disaster for purposes of the WARN Act. Rather, it includes events that are “of the same kind as floods, earthquakes, and droughts,” namely “hydrological, geological, and meteorological events.”

Notably, however, in its WARN FAQ for COVID19, the DOL suggested that employers review the “unforeseeable business circumstances” exception to the notice requirement. This exception applies where the layoff is “caused by business circumstances that were not reasonably foreseeable at the time that 60-day notice would have been required.” Given an employer’s particular business circumstances, this exception may apply to certain COVID-19-related layoffs, even if the natural disaster exception does not.