The oil industry is subject to booms and busts. Oilfield companies will often staff up their business when oil prices are high and they are making substantial profits, but companies may change their strategy when things are not going as well. When oilfields run dry, or it is not profitable to drill in a location anymore, the company may shed the workers they were once desperate to hire.
Numerous bust cycles have affected oilfields. For example, prices crashed between the mid-2000s, and companies that began drilling when prices surged before and after the Great Recession scrambled to cut drilling projects in the face of financial difficulties. In addition, the price collapse after COVID-19 began led to massive job losses in the oilfield sector. The consulting firm Deloitte compiled a study that showed that companies cut over 100,000 jobs in the oil sector at the beginning of the pandemic.
Oilfield employers may choose to close a single job site and let many of the workers there go. They may cut the workers’ hours dramatically or temporarily suspend their jobs for some time. Employers cannot cut your job and let you go on the spot; they can face legal consequences if they do.
The most crucial requirement that oilfield employers must follow is giving their workers notice of the layoff. If they fail to provide this notice, you can sue for damages. First, you should contact an experienced San Antonio oil field injury attorney to help determine whether you may have a potential lawsuit against your employer.
Why Congress Passed the WARN Act
The Worker Adjustment and Retraining Notification Act requires certain employers to give advance notice to employees of their pending layoff. The information is supposed to give employees enough time to:
- Look for a new job
- Obtain training so they are more qualified for a new position
- Acclimate themselves to the prospect that they will soon lose their job
Congress tried for nearly 15 years to pass the WARN Act in the wake of economic turmoil in the early 1970s. Companies had been closing plants and laying off workers without any notice, and these actions caused economic uncertainty for affected employees. Some were constantly working under the threat of sudden layoffs, which harmed overall productivity on the job. Congress finally passed the bill in 1988, which became law in February 1989.
Only some employers are subject to the requirements of the WARN Act. The law kicks in when an employer has 100 or more employees who either have worked for 20 hours or more per week for at least six months or work an aggregate total of 4,000 or more hours per week.
Requirements of the WARN Act
Not every layoff or plant closure is subject to the requirements of the WARN Act. Here are the triggers that subject employers to the law:
- The closure of a single plant, facility, or job site that employs 50 or more workers over 30 days
- Mass layoffs that affect 50 or more employees during 30 days at a single plant or job site affecting 33 percent or more of the employer’s active employees OR a loss of at least 500 employees during 30 days
The WARN Act may aggregate job losses over 90 days (even though it is more than 30 days) unless the employer can show that the losses were for different causes and not just a disguised attempt to evade the law.
In addition, the WARN Act applies when there is a sale of the business that results in layoffs, and who must give the notice depends on when the layoffs occur. If they happen before the sale, the buyer must provide the notice; if they occur after the sale, the seller must notify the workers.
Employees Who Are Subject to the WARN Act
Employers must follow the requirements of the WARN Act concerning the following employees:
- Hourly employees
- Salaried workers
- Managerial
- Supervisory employees
Then, the requirements of the WARN Act apply when the following occur:
- The employee is terminated or laid off for more than six months
- The employee has their regular work hours reduced by more than 50 percent for at least six months
The WARN Act may even apply to part-time employees.
What the WARN Act Requires
The WARN Act governs employers’ actions if a large-scale layoff triggers the law’s requirements. It is called the WARN Act because employers must give at least 60 days’ notice when there is a covered job loss. The employer must provide this notice to the impacted employee or their union representative (who will then pass it along to the employee) and must also notify the state and local government. The employer can give the employee severance pay instead of the required notice. Of course, employers can also give employees more than 60 days’ notice and may have to do so if they are required to do so by collective bargaining agreements. The employer can face legal action for violating a collective bargaining agreement if they do not meet its terms.
What Must Be in a WARN Act Notice
If a representative receives a WARN act, the notice must include:
- The name and address of the employment site where the plant closing or mass layoff will occur
- The name and telephone number of the company representative to contact for additional information
- The expected date of the first separation and the anticipated schedule for making separations
- The job titles of positions to be affected and the names of the workers currently holding affected jobs
Federal regulations advise employers that it is good business practice to give employees advance notice of a layoff when terminating a significant number of employees.
Note that your state may have its own version of the WARN Act but cannot pass laxer laws because the federal law requirements will preempt state law. However, states may pass even stricter regulations than the WARN Act, and many have done this. You may also consider filing a lawsuit under state law, and you can do that if the employer has broken state law but not federal law.
You Have the Right to File a Lawsuit When Your Employer Breaks the Law
Although the Department of Labor issues rules about the WARN Act, they do not enforce the law. The WARN Act includes a private right of action, meaning that you have the power to take enforcement action through a civil lawsuit against the company that violated your rights.
Recently, the WARN Act has been in the news. After Elon Musk instituted mass layoffs once he bought Twitter, employees filed a lawsuit against the company because they did not get any notice. They only found out they had lost their job when they tried logging on to the system.
Some employment agreements require you to arbitrate your WARN Act. For example, a federal court in the Twitter case ordered the dismissal of the class action lawsuit because the employment agreement contained a mandatory arbitration provision. Nonetheless, the former Twitter employees can still have their day in court in arbitration.
Recently, people have filed a spate of lawsuits under the WARN Act. These cases take the form of a class action lawsuit against the company, and in many cases, you will be filing your claim as part of the bankruptcy proceedings of the employer.
Defenses to WARN Act Lawsuits
Sometimes, the employer may have been unable to give the notice required under the WARN Act. In that event, they may not be liable to pay damages under the law, and here are some defenses that employers commonly use against lawsuits:
- Faltering Company – The company is experiencing business problems and seeking investment capital. The company has a good faith belief that giving employees advance notice of the layoffs may jeopardize the capital that can keep the company from a prolonged shutdown.
- Unforeseen Business Circumstances – The closing or mass layoff happens because of business circumstances that were not reasonably foreseeable at the time of required notice. The employer must plead this as an affirmative defense.
- Natural Disaster – The layoffs directly result from a natural disaster such as a hurricane, flood, earthquake, drought, storm, tidal wave, or similar events. The employer still must give as much notice as possible.
Many companies that go through with layoffs are in financial distress, and some may already be in the bankruptcy process and are making cost-cutting moves. The WARN Act generally applies when the company is in bankruptcy, but the employer cannot file for bankruptcy after failing to give the required notice. The WARN Act also applies when the debtor continues to run the business when they are in the middle of bankruptcy. However, the law does not apply when the bankruptcy trustee is winding up the company.
The realities of the bankruptcy process mean that one of these fact-specific defenses can dispute a lawsuit.
Your Damages in a WARN Act Case
If you were to win a WARN Act lawsuit, you may receive back pay and benefits for up to 60 days. Most courts will interpret the 60 days as the number of work days in that period, not awarding you compensation for the entire time, whereas other courts will pay you back for all the calendar days. In addition, the employer may have to pay reasonable attorney’s fees.
How a WARN Act Attorney Can Help Your Case
You must contact an attorney if an employer has laid you off without adequate notice. You can start a class action lawsuit that leads to financial compensation.
A WARN Act attorney can do the following for your case:
- Review the circumstances of your layoff to help determine if the employer met the WARN Act requirements
- File a class action lawsuit on your behalf in state or federal court (depending on the law)
- Review any defenses given by your employer to determine how to address them in court
- Negotiate a settlement of your WARN Act class action lawsuit or try your case in court
Employers may often settle the case before trial because they can be subject to a very high damages award if they lose in court. Your attorney will work to maximize your compensation in a settlement agreement.
Enforcing the law with an experienced attorney will be easier because you often go up against large companies.
There is no statute of limitations for the WARN Act under federal law. However, the time limit on the lawsuit is a function of the law in your state, so it is essential to have your lawyer track the deadline for you to file your case.
How a WARN Act Attorney Receives Payment
Like any attorney who files a class action lawsuit, a WARN Act attorney does not charge you anything upfront, and you do not need to pay an attorney for their time when they file the lawsuit. You pay your WARN Act lawyer if you win your case and receive a settlement or a jury award. The court will determine what percentage of your settlement or jury award the attorney will receive as their contingency fee for helping you win your case.
Consult a WARN Act Attorney Today
If you’re a construction worker who has recently been laid off due to plant closures or mass layoffs, always understand your rights under the Worker Adjustment and Retraining Notification Act. Navigating the complexities of the WARN Act can be daunting, which is why consulting a knowledgeable WARN Act attorney is highly recommended.
By consulting a WARN Act attorney, you can rest assured knowing that your case is in the hands of a professional. They will advocate for your rights and negotiate on your behalf, seeking the compensation you deserve. Additionally, they can provide valuable guidance in terms of the best course of action to take and what legal remedies are available to you.
The consequences of plant closures and mass layoffs can be financially and emotionally devastating. Don’t navigate this challenging time on your own. Consult a trusted personal injury lawyer today to protect your rights and seek the just compensation you deserve.