One laid-off Pluralsight employee said she got the news in the middle of a road trip with her family; another said she had just given birth.
“Nothing says, ‘Good morning,’” said a third employee, who also posted on LinkedIn, “like a surprise email from the CEO and a last minute Zoom Meeting saying you’ve ... ‘been impacted.’”
In contrast, more than 200 SkyWest Airlines employees working in Salt Lake City already know they will be let go in September.
The difference? SkyWest Airlines filed a WARN notice with employees and the state of Utah on July 11.
The Worker Adjustment and Retraining Notice (WARN) Act is supposed to protect employees from sudden mass layoffs. It requires employers with 100 or more full-time employees to provide at least 60 days written notice if their worksite is closing or if a mass layoff is coming.
But there are exceptions. And the rule’s parameters leave room for legal loopholes.
“Plenty of people are still trying to avoid the WARN Act,” said Stuart Miller, partner at Lankenau & Miller LLP in New York.
Miller’s law firm specializes litigating WARN Act violations. It’s representing Utahn Michael Gustafson, who hopes to lead a class-action lawsuit on behalf of hundreds of employees laid off in June from MarketStar, an international marketing business with its headquarters in Ogden.
“Transitioning” SkyWest jobs to Delta Air Lines
(Christopher Cherrington | The Salt Lake Tribune)
SkyWest is “transitioning” its airport operations and customer service jobs in Salt Lake City to Delta, one of its partners, a spokesperson for the St. George-based regional airline said.
Last year, partner United Airlines announced it was cutting 29 cities because SkyWest didn’t have enough pilots to fly the routes. SkyWest later said it was seeking federal approval to start a new charter service — which would face different requirements for pilot hours of experience — to underserved communities in the United States.
As the Salt Lake City jobs are eliminated, SkyWest employees can apply for “similar” roles at Delta or request to transfer to other positions within SkyWest, the company spokesperson said.
That layoff affects more than 50 people at the same workplace, which the WARN Act covers. But it might not if the employees were scattered over multiple work sites — and that’s the loophole that means tech companies rarely file WARN notices, Miller said.
Pluralsight has never filed one, despite laying off 400 people in December. Route, a Lehi-based delivery tracking software company, had two rounds of layoffs in December and June, according to former employees’ posts on LinkedIn and Glassdoor. Both were sudden and not previously announced.
Pluralsight, like other big tech companies, has offices in multiple places — Utah, Texas, Australia and Ireland. “Any time you see a big tech company, the odds of there being a WARN event [are low],” Miller said.
Cuts or closures also have to happen within the same 90 days to be covered. Miller said companies will sometimes space out several rounds of layoffs over time to stay below the reporting threshold.
More than a WARNing
Congress passed the WARN act in 1988 “to provide workers with sufficient time to seek other employment or retraining opportunities before losing their jobs,” according to the Department of Labor.
But the benefits of WARN notices go beyond the heads-up they provide. During the 60-day notice period, employers continue to pay and provide benefits to workers.
Gustafson, who was laid off June 30 from MarketStar in Ogden, has filed a federal lawsuit alleging the company failed to warn employees of the staff reduction and also failed to pay them for wages, commissions, bonuses, accrued vacation and holiday pay for the required 60 days.
MarketStar also failed to continue its 401K contributions, health insurance coverage and other benefits, his suit claims.
MarketStar did not respond to a request for comment.
Gustafson is proposing that his lawsuit be approved by a federal judge as a class-action case, which would allow him to potentially include the claims of roughly 280 employees laid off from the Ogden office.
It’s not an either-or situation. An agreement to compensate terminated employees does not replace an employer’s legal obligation to notify employees ahead of time, according to the Department of Labor. But lost wages are the penalty for failing to comply with the WARN act, so providing them upfront is a way for employers to avoid civil suits like the one Gustafson has filed.
Employees who sign a severance agreement generally don’t have a WARN case. “If there was any waiver signed, that’s it,” Miller said.
Two separate WARN Act lawsuits recently filed in Utah against Progrexion, a credit repair company, also seek lost wages and benefits for a mass layoff in April that affected between 800 and 900 people, according to federal court documents. The company has since filed for bankruptcy, which will stay both suits.
