On March 17, 2020, California Governor Gavin Newsom issued Executive Order N-31-20 (the “Order”) as part of California’s response to the COVID-19 State of Emergency. The Order addressed two discrete issues: (1) exempting interstate motor carriers from certain state requirements to support emergency relief efforts; and (2) relieving employers of the 60-day notice requirement of the California Worker Adjustment and Retraining Notification (“Cal-WARN”) Act. For a detailed discussion of the interstate motor carrier portion of the Order, see here.
Cal-WARN requires employers who have employed 75 or more employees within the preceding 12-month period to provide 60 days’ notice to employees before conducting a mass layoff (50 or more employees in a 30 day period), relocation, or termination (plant closure or other cessation of operations). Cal. Lab. Code §§ 1400, 1401. In addition, unlike the federal WARN Act, the Cal-WARN has been applied to employee furloughs, including those that last less than 6 months. See The Internat. Brotherhood of Boilermakers, etc. v. NASSCO Holdings Inc., 17 Cal. App. 5th 1105 (2017).
However, due to the State of Emergency and the “Shelter in Place” orders being issued by numerous counties throughout California (see discussions of those orders here and here), many “employers have had to close rapidly without providing their employees the advance notice required under [Cal-WARN].” Exec. Order N-31-20 ¶ 2.
To remedy the problem, the Order temporarily creates a new exception to the Cal-WARN for certain mass layoffs, relocations, or terminations that are caused by to COVID-19 related “business circumstances that were not reasonably foreseeable as of the time that notice would have been required.” Exec. Order N-31-20 ¶ 2(iii). The unforeseen business circumstances exception has long been a part of the federal WARN Act, but was previously not a part of Cal-WARN.
The specific conditions that employers must satisfy to meet this new exception are as follows:
- The employer must give the written notices set forth in Cal-WARN (Exec. Order N-31-20 ¶ 2(i));
- Consistent with the federal WARN Act, the employer must give as much notice as is practicable and, at the time notice is given, provide a brief statement of the basis for reducing the notification period (Exec. Order N-31-20 ¶ 2(ii));
- Consistent with the federal WARN Act, the employer’s order of a mass layoff, relocation, or termination must be caused by COVID-19-related "business circumstances that were not reasonably foreseeable as of the time that notice would have been required" (Exec. Order N-31-20 ¶ 2(iii)); and
- The employer’s written notice must contain the following statement: "If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019." (Exec. Order N-31-20 ¶ 2(iv)).
This temporary exception to the California WARN Act is effective from “March 4, 2020 until the end of this emergency.” Exec. Order N-31-20 ¶ 2.
Recommendations
We highly recommend employers in California that are considering a mass layoff, relocation, or termination due to circumstances caused by the COVID-19 State of Emergency do the following:
- Employers should first determine whether they are covered by Cal-WARN.
- Covered employers that intend to or are required to have a qualifying mass lay-off, relocation, or closure must give proper notice otherwise required under the Act as soon as practicable, stating clearly that the layoff, relocation, or termination is caused by COVID-19-related "business circumstances that were not reasonably foreseeable as of the time that notice would have been required."
- Covered employers should ensure that their notices are updated to satisfy the requirements under the Order, including, at a minimum:
- Providing a statement indicating why a full 60 days’ notice was not possible;
- Include the following statement in the employee notice: "If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019."
Clearly, this Order creates a major temporary change to Cal-WARN and will have a significant impact on employers throughout California. FordHarrison attorneys are available to assist you in ensuring compliance with this Executive Order. If you have any questions or need assistance in complying with these Orders, please contact the authors of this Alert, Ross Boughton, rboughton@fordharrison.com, and Daniel Lyman, dlyman@fordharrison.com, in FordHarrison’s San Francisco Bay Area office. Of course, you may also contact the FordHarrison attorney with whom you usually work.
FordHarrison is closely monitoring the spread of Coronavirus and has implemented continuity plans, including the ability to work remotely in a technologically secure environment when necessary, to ensure continuity of our operations and uninterrupted service to our clients. We are following all CDC guidelines and state and local laws as applicable. We are committed to ensuring the health and welfare of our clients, employees, and communities while continuing to provide our clients with the highest quality service. Please see our dedicated Coronavirus Taskforce page for the latest FH Legal Alerts and webinars on Coronavirus, as well as links to governmental and industry-specific resources for employers to obtain additional information and guidance. For more information or to be connected with a Coronavirus Taskforce attorney, please contact clientservice@fordharrison.com.