Quick Hits
- A surge in NJ WARN notices issued in the months prior to the April 10, 2023, effective date of the amendments suggests employers expedited terminations to avoid the new mandatory severance requirements of the amended law.
- At least three significant NJ WARN lawsuits are pending that may resolve open questions addressing remote work, statewide aggregation, technical terminations in the sale of business context, and other uncertainties.
NJ DOL Data
A review of the NJ WARN notice filings with the NJ DOL provides several insights into the impact of the new law.
- Nearly 3,800 employees received NJ WARN termination notices in January and February 2023 (two months).
- More than 11,300 employees received NJ WARN termination notices from March 2023 through March 2024 (thirteen months).
- Given the disproportionate number of NJ WARN layoff notices over the two-month January–February 2023 period, it is likely employers timed many of these notices to ensure the layoffs occurred prior to the April 10, 2023, effective date of the NJ WARN amendments to avoid the mandatory severance pay requirements of the new law.
Recent Case Filings
Several interesting class action lawsuits have been filed in the U.S. District Court for the District of New Jersey that may resolve certain open questions about the new NJ WARN amendments.
- Malave v. Tata Consultancy Services is a putative class action filed in November 2023 under NJ WARN brought by IT employees—who worked remotely at home or client sites—who allege their employer did not give them the ninety days’ advance notice or statutory severance pay required under NJ WARN when their positions were eliminated. The case may provide guidance regarding the new NJ WARN provisions that (i) an employer must aggregate employment losses across the state (versus the prior “single establishment” requirement) and (ii) a covered mass layoff is a reduction in force that results in the termination of employment for fifty or more employees at an employer’s establishment or“reporting to” the establishment.
- Del Rossi v. Formal Mills, Inc., is a putative class action under NJ WARN filed in June 2023 by retail employees who were terminated without ninety days’ advance notice or statutory severance when their employer ceased operations. The employees were rehired only weeks later by a buyer of the company, who provided them with a retroactive payment for their lost wages and benefits. The case may provide guidance regarding whether a “technical termination” occurring in a sale of business context is an “employment loss” that triggers NJ WARN, given that NJ WARN does not have an express “sale of business” exception, like the federal Worker Adjustment and Retraining Notification (WARN) Act.
- Castillero v. XTend Healthcare is a putative class action under NJ WARN, filed in April 2022—one year prior to the effective date of the April 2023 NJ WARN amendments—by temporary employees working at a COVID-19 vaccine call center who were discharged without receiving sixty days’ advance notice. The case may provide guidance regarding (i) whether temporary employees are covered by NJ WARN and (ii) the requirement that an establishment is only covered by NJ WARN if it “has been operated by an employer for a period longer than three years.” In Castillero, the employer of the temporary employees alleges that it did not “operate” the establishment at all (it just supplied the temporary employees to the call center operator) and that, in any event, the establishment was not in operation for more than three years when the layoffs occurred.
Ogletree Deakins’ Morristown office will continue to monitor developments and will pro updates on the New Jersey and Reductions in Force blogs as additional information becomes available.
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