Employees Cannot Sue for Violations of Maryland’s Mini-WARN Act.

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Maryland, like a number of other states, has a law similar to the federal Worker Adjustment and Retraining Notification Act, requiring employers to give 60 days’ notice of certain plant closings and mass layoffs. Compliance with the Maryland Economic Stabilization Act (or mini-WARN Act) had previously been voluntary but was made mandatory in 2020. However, the Maryland federal district court recently ruled that employees do not have a private right of action under the law.

The Law. The Maryland mini-WARN Act applies to employers with at least 50 employees operating an industrial, commercial or business enterprise in the State for more than one year. It is triggered by a reduction in operations, meaning either:

  • the relocation of part of its operation from one workplace to another, resulting in the reduction of the total number of employees by the greater of at least 25% or 15 employees; or
  • the shutting down of a workplace or a portion of its operations that reduces the number of employees by the greater of at least 25% or 15 employees over a 3-month period.

Under the law, employers must give 60 days’ notice of such reduction in operations to affected employees, their union if any, the Maryland Dislocated Worker Unit, and the chief elected official in the jurisdiction where the affected workplace is located. The notice must provide certain specified information. The Maryland law also contains some, but not all, of the federal exceptions to the 60-day notice requirement.

The Court’s Decision. In Teamsters Local Union No. 355 v. Total Distribution Services, Inc., approximately 60 employees at an automobile distribution facility were terminated without notice. Several of them sued, alleging that their employer had violated Maryland’s mini-WARN Act by failing to provide 60 days’ notice. The Maryland federal district court, however, found that the employees had no right to bring suit under the law. The law itself does not provide for a private right of action but does set forth an administrative enforcement procedure through the Maryland Department of Labor. The employees argued for an implied private right of action, but the court rejected their argument. In reviewing the legislative history of the law, the court determined that the General Assembly specifically addressed the enforcement mechanism and “focused exclusively on administrative enforcement to the exclusion of other methods of enforcement.”

But No MDOL Enforcement – for Now. This case is good news for employers, in that only the MDOL can enforce the law. Interestingly, at this time, the MDOL is taking the position that it will not enforce the mandatory notice provisions under the law until it has issued final regulations implementing the mini-WARN Act. (This was previously explicitly stated on the MDOL website; although that statement was removed, we have received confirmation of this continuing position in direct communications with the MDOL). Although proposed regulations have been released (as we discussed in our January 3, 2024 E-lert), no final regulations have yet been issued. We will keep you posted on when they are finally released, at which time the MDOL will exercise its enforcement authority.