In the first ruling from a federal appellate court examining COVID-19–related layoffs and the Worker Adjustment and Retraining Notification (WARN) Act, the Fifth Circuit Court of Appeals held in Easom v. US Well Services, Inc., No. 21-20202 (June 15, 2022), that a mass layoff resulting in part from the economic impact of COVID-19 did not qualify for the “natural disaster” exemption to the WARN Act’s sixty-day notice requirement for mass layoffs. The court also held that for an employer to rely on the exemption, the mass layoff (or plant closing) must be the “direct result” of the natural disaster. This is an important ruling for employers in Louisiana, Mississippi, and Texas.

Background

U.S. Well Services, Inc., provides hydraulic fracturing or “fracking” services to oil producers. In March 2020, oil prices hit historic lows due first to a “pricing war” between Saudi Arabia and Russia and then due to decreased demand resulting from COVID-19–related disruptions. Consequently, U.S. Well Services’ customers—the oil producers—significantly reduced, if not entirely shut down, their fracking work in Texas. U.S. Well Services, in turn, laid off a sufficient number of employees to constitute a “mass layoff” under the WARN Act but did not provide the employees with the sixty days’ advance notice required by the WARN Act.

Specifically, the WARN Act prohibits covered employers from ordering a mass layoff or closing a plant unless the affected employees are provided with sixty days’...

Read Full Story: https://www.natlawreview.com/article/covid-19-driven-layoffs-are-not-natural-...