A company didn’t have to give 60 days’ notice of layoffs where it was forced to shut down operations due to the sudden loss of a major customer, according to a recent federal court ruling. Normally, under the federal “WARN Act,” companies with 100 or more workers must provide 60 days’ notice of a plant closing or a mass layoff. However, there is an exception for “unforeseeable business circumstances.”
The company’s financing problems resulted in its largest customer, which accounted for 40 percent of its orders, suddenly switching to another supplier. Even though the workers argued that the company had been going through financial difficulties for months and knew in advance about the possibility of layoffs, the court said that employers shouldn’t be burdened with having to notify workers of the possibility of layoffs every time there is a financial problem that might prove temporary. The loss of the company’s main customer in the midst of all of its other problems was unforeseeable, and it was enough that the company gave its employees written notice six days after it learned of the loss of the customer.