Workers Stage Sit-In Over Plant Closing
December 11, 2008
Last week, Republic Windows and Doors, a Chicago manufacturer, announced that it would be closing immediately. The reason—Bank of America cancelled its line of credit. Republic’s 300 employees were given 3 days notice of the plant closing. In response, approximately 200 of Republic’s unionized workers staged a mass sit-in inside the factory to protest Republic’s failure to provide notice under the Worker Adjustment and Retraining Notification Act, also known as the WARN Act. Today, media outlets are reporting that Republic has reached an agreement with its unionized employees to pay the equivalent of 60 days pay. The Republic story, as well as the current economic climate, provide an interesting backdrop for discussing the Warn Act.
The WARN Act generally applies to any employer with 100 or more employees, not counting employees who worked less than 6 months in the last 12 months and employees who work an average of less than 20 hours a week. It requires a covered employer to give employees 60 days’ notice of any plant closing or mass layoff.
The workers occupying the plant originally demanded that Republic pay them for wages, vacation and severance pay totaling over 1 million dollars. Although the WARN Act does not require employers to pay any type of severance, employers can bypass the notice requirements of the Act by paying employees for the 60 days’ notice required under the Act.
The Republic situation is further complicated, however, because the WARN Act provides an exception for business circumstances that were not reasonably foreseeable at the time that 60-day notice would have been required. If this case had been litigated, Republic likely would have taken the position that the cancellation of its line of credit was an unforeseeable business circumstance that excused the company from complying with WARN. When unforeseen events occur, employers are only required to provide as much notice as is practicable.
The Republic case would be an interesting case to litigate. The outcome probably would be determined based upon a fact-specific inquiry regarding Republic’s knowledge of the danger of its credit line being cancelled, as well as Republic’s economic and financial ability to continue operations during the 60 day notice period.
Kudos to Republic’s workers for standing up for their rights. Indiana employees take notice.
