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WARN ACT Case Analysis

By: dmc-admin//February 23, 2005//

WARN ACT Case Analysis

By: dmc-admin//February 23, 2005//

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The decision’s precedential value is undercut, because only half of the analysis will remain applicable to future cases.

On the issue of causation, the court concluded, "Andersen could not indict itself. Andersen was not like a company that secretly plotted for a long time to move its operation to Mexico and closed up shop without any notice to its employees." On this element, the court’s analysis will apply to future cases.

However, the court’s discussion of the other element — foreseeability — can be limited, at least in part, to the facts of this case. Arthur Andersen could credibly claim that, in 2002, it was unfathomable the DOJ would indict an entire corporation, with 27,000 employees in 80 locations, as a result of the crimes of individual employees.

No future corporation can ever again make the same claim.

Also, on the issue of whether an employer must give some notice, even if not 60 days is not possible, the dissent makes a strong argument, something particularly evident when the federal statute is compared with Wisconsin’s mass layoff law, sec. 109.07.

Related Links

7th Circuit Court of Appeals

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Wisconsin’s statute contains no counterpart to 29 U.S.C. 2102(b)(3) — "An employer relying on this subsection shall give as much notice as is practicable…"

The majority opinion makes no effort to rebut the dissent’s reliance on the subsection, or provide an alternative interpretation of it.

Furthermore, as Wood notes, other circuits have found the subsection to mean that unforeseeable business circumstances are not a per se exemption from the statute, but allow the notice period to be either eliminated or reduced, as appropriate. Burnsides v. MJ Optical, Inc., 128 F.3d 700 (8th Cir.1997); Hotel Employees and Rest.

Employees Intern. Union Local 54 v. Elsinore Shore Asocs., 173 F.3d 175 (3d. Cir. 1999); and Halkias v. General Dynamics Corp. 137 F.3d 333 (5th Cir.1998).

Given the circuit split on this issue, and potential for a contrary holding by the U.S. Supreme Court, employers would be foolhardy to treat the unforeseen circumstances exception as a per se exemption from giving notice, and ignore subsec. (b)(3).

– David Ziemer

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David Ziemer can be reached by email.

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