Businesses are subject to a variety of California employment laws affecting the employer/employee relationship. These include laws setting a minimum wage, establishing rules for overtime compensation and standards for workplace safety, and addressing employment discrimination and harassment. A lawsuit recently filed in a Northern California federal court alleges that a company violated state and federal laws that deal with employers’ obligations prior to mass layoffs of employees. Roberts, Jr. v. Telltale Games, Inc., No. 3:18-cv-05850, complaint (N.D. Cal., Sep. 24, 2018). The defendant, a video game developer in the Bay Area, recently announced that it had laid off most of its workforce in anticipation of closing its operations. The plaintiffs allege that the company failed to give advance notice as required by law.
The federal Worker Adjustment and Retraining Notification (WARN) Act of 1988 applies to employers with one hundred or more full-time employees. An employer must give notice in advance of a “plant closing” or a “mass layoff.” A “plant closing” occurs when an employer’s closure of a work site causes at least fifty employees to lose their jobs within a span of thirty days. 29 U.S.C. § 2101(a)(2). The Roberts case cited above involves an alleged “mass layoff.” The WARN Act defines this as a “reduction in force” within a thirty-day period that causes the loss of either (1) five hundred or more jobs, or (2) fifty or more jobs when that number accounts for at least one-third of the company’s total workforce. Id. at § 2101(a)(3).
California law applies more broadly than the federal WARN Act. The state statute applies to any employer with at least seventy-five employees, including part-time workers. Cal. Lab. Code § 1400(a). A “mass layoff” includes any incident that results in the loss of fifty or more jobs in thirty days. Id. at § 1400(d). Under both statutes, employers must give notice to affected employees or their representatives at least sixty days in advance of a mass layoff. 29 U.S.C. § 2102(a), Cal. Lab. Code § 1401.