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In recent news, a major company (Twitter) abruptly laid off a large number of staff effective immediately, apparently in violation of the Federal WARN Act and the similar California-specific act, which requires 60-day notice for significant layoffs.

Then, in an apparent effort to comply with the act retroactively, the company announced that now-former-employees would continue to be paid and receive benefits for 60-days (but would still be locked out of company resources, and not actually "working" for the company).

Is there a basis or precedent for this?

It seems to me that the WARN violation already occurred, and attempts to retroactively address it with a re-branded severance package should be futile. But it also seems incredible that such a large company, presumably with an well-staffed legal department could make such an unforced error.

Is there legal nuance here that I'm missing?

abelenky
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    What difference do you think this makes exactly? – David Schwartz Nov 07 '22 at 16:47
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    If the law requires you stop at a Crosswalk, and you stop 10 feet beyond it, it matters to the law. If the law requires an advance layoff notice, and you get laid off without notice, but instead get some similar benefits after-the-fact, I think it matters to the law. But IANAL, and I'm asking if there is a difference in the legal sense. – abelenky Nov 07 '22 at 17:02
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    They were not "laid off immediately". Work access was removed and then letters were sent advising them they had non-work employment status until Feb of 2023 (basically getting a paycheck for doing no work), as well as given severance packages. – Digital fire Nov 07 '22 at 17:19

1 Answers1

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The US Department of Labor Employer's Guide to Advance Notice of Closings and Layoffs states

Can I pay my workers their salary and benefits for 60 days in lieu of notice?

Neither the Act nor the regulations recognize the concept of pay in lieu of notice. WARN requires notice, making no provision for any alternative. Failure to give notice does a significant disservice to workers and undermines other services that are part of the purpose of the WARN Act. However, since WARN provides that the maximum employer liability for damages, including back pay and benefits, is for the period of violation up to 60 days, providing your employees with full pay and benefits for the 60-day period effectively precludes any relief.

(emphasis mine)

So from the Federal perspective, so-called pay in lieu is technically against the WARN act, but no penalty may occur.

Note that payment in lieu is not unique to this situation at all. For regulated high-trust industries, such as banking and aviation, pay in lieu is basically required due to the risk of employee sabotage.

user71659
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    The dominant view is that you should violate the law under these conditions. There is a minority moral view that the law is the law and it's wrong to break it whatever it says, but the majority moral view is that it's hard to argue that it's wrong to do something that everyone benefits from. – David Schwartz Nov 07 '22 at 17:29
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    Efficient Breach applies to contracts between consenting parties. Its not at all clear that theory applies to laws. Could one "efficiently breach" the speed limit if the fine is small, and the speed gain is important? – abelenky Nov 07 '22 at 17:34
  • @abelenky You are missing that workers are being paid the exact same benefits (salary, retirement, health plan) but they have to do 0 work. For those 60 days, they are clearly in better employment than they were before. Nothing in an employment contract or law requires a minimum level of duties and responsibility. – user71659 Nov 07 '22 at 17:37
  • And California law? – George White Nov 07 '22 at 17:39
  • @abelenky This is about a contract between Twitter and their employees that Twitter is breaching because the WARN act adds terms to that contract. Twitter is fully compensating the employees for that breach and the law gives no other remedies. Every breach of contract is going to involve some law that requires the parties of the contract to do or not do something because of the contract. Arguably, this is even less bad that a typical breach of contract because this is not an explicit contract term, so the employees might not even want it and may not have bargained for it. – David Schwartz Nov 07 '22 at 17:45
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    @DavidSchwartz - you seem to be mixing up contract and law. It requires companies to do some things that appear not to have been done. Note the WARN Act requires notice to public officials as well as to employees. From Department of Labor web site "to elected official of the local government where the closing or mass layoff is to occur." Unrelated to severance. I do not see the WARN Act as adding a term to any potential employment contract. Thought experiment - could employees have bargained away WARN? No -it's law. Stating it is an invisible contract term is therefore a huge stretch. – George White Nov 08 '22 at 00:11
  • @GeorgeWhite Again, the only remedy is salary for the warning period which they're providing. The notice to public officials only has to occur before salary stops, not before job responsibilities stop. There is no harm whatsoever, so no moral issue. And they've provided the compensation the law requires, so no legal or practical issue. There's simply nothing here. – David Schwartz Nov 08 '22 at 23:47
  • @abelenky Every driver I personally know has breached the speed limit the way you suggest, and most do it habitually. – Ryan Jensen Jul 18 '23 at 22:14