NCPA - National Center for Policy Analysis

Workers Taking Firms To Court After Layoffs

March 12, 2001

Increasing numbers of laid-off workers are taking their former employers to court under a little-known federal statute involving notification of job cuts.

  • Under the Worker Adjustment and Retraining Act of 1988, most employers must give at least 60 days' notice involving a plant closing or mass layoff.
  • Although the law was originally aimed at protecting manufacturing workers, former employees of both high-tech and traditional companies are claiming they weren't given adequate advance notice of a downsizing.
  • Employees who did not receive advance notice may be eligible for 60 days' pay -- although there are many exceptions in the law.
  • For example, companies may not be covered if they have experienced sudden unexpected business circumstances or if they have fewer than 100 employees.

Companies often provide severance pay as a way to protect themselves from such lawsuits. But many start-up companies have not been able to afford severance.

Lawyers report they are getting increasing numbers of calls from workers seeking information about their rights under the law.

Source: Stephanie Armour, "Lawsuits Spring Up After Layoffs," USA Today, March 12, 2001.


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