Warn Act Do You Agree

WARN Act

Do you agree with management's human resource plan of action for the immediate plant closing? Why or why not? Explain in detail and include the legal implications. What does the WARN Act say that allows the plant to close inside of the 60-day notice period?

Given that keeping the plant open will incur additional input costs and not benefit the plant or the workers, whose jobs will surely terminate soon, closing the plant seems wise. This gives the workers a chance to look for new work, rather than keeping them laboring at 'make work' with no hope of ameliorating the situation. If they experience difficulty finding work, they can seek unemployment compensation. While the circumstances are difficult, the extra few months will do little to improve the situation of the workers in the long-term, and only result in a more costly plant closure, with greater expense to the firm's shareholders.

The actions firm of the firm falls under the WARN Act because 3(a) 1 of the WARN Act allows for closure before 60 days if the employer is "actively seeking capital or business...through any other commercially reasonable method" but still cannot financially sustain the company Also, pursuant to 4(b) 1 of the WARN Act allows for immediate closure when a firm facing a catastrophic financial circumstances that "is not reasonably foreseeable," before the 60 days required. These include circumstances caused by sudden, dramatic, and unexpected actions or conditions outside the employer's control, such as a withdrawal of a major client like the sportswear company and the subsequent failure of negotiations. The withdrawal of the sportswear company is an event that could not be anticipated with reasonable business judgment practiced by a similar employer within the same market. Management has been making a good faith effort to negotiate and raise capital, another condition of the Act. True, the managers will still have employment for the 60 days, but this is not an example of favoritism, rather it is because the mangers still need to engage in the necessary steps to close the firm. Also, financing from another source is unlikely, given the troubled circumstances of the company, thus indicating the company can do no more than it is at present and keep the plant open for the duration of the 60 days to fulfill the conventional time provisions of the WARN Act.

What possible alternatives do the managers and HR have in handling this scenario? If no other attractive options exist and they must depart in two days, what kinds of assistance can the plant give the newly unemployed workers? Given the financial restrictions, is outplacement assistance a possibility?

The problem with outplacement assistance is that the firm hardly has the financial resources to give the workers any additional temporary assistance, and it is looking to cut back workers and employment costs, not redirect the workers to new jobs within their field. Given the location of the plant it may be difficult for workers to look for jobs elsewhere within the community, and thus the transition process is likely to be hard, no matter what outplacement assistance they were given. Perhaps the best thing to do would be for the company to offer the workers some advice and aid for in filing for unemployment insurance, and direct them to channels in which they can explore new employment opportunities, perhaps through a temporary agency.