No COVID Exception to WARN Act, 5th Circuit Rules

Author: David B. Weisenfeld

June 22, 2022

The COVID pandemic is not a natural disaster under the WARN Act, and therefore does not exempt employers from the mass layoff law's notice requirements, the 5th Circuit Court of Appeals has ruled. The WARN Act requires covered employees to provide 60 days' written notice of a plant closing or mass layoff, but provides a natural disaster exception.

This ruling is significant because lower courts have been divided over this issue. The 5th Circuit generally is viewed as a pro-employer court so its refusal to let the employer off the hook in this first-of-its-kind appellate court decision is telling.

In Easom v. US Well Services, Inc., a group of terminated employees filed a class action claiming their former employer let them go without advance notice in violation of the WARN Act.

Their termination letters, dated March 18, 2020, and effective immediately, had stated: "Your termination of employment is due to unforeseeable business circumstances resulting from a lack of available customer work caused by the significant drop in oil prices and the unexpected adverse impact that the Coronavirus has caused." Their employer argued that COVID fell within the WARN Act's natural disaster exception.

But the New Orleans-based federal appellate court disagreed. The court explained that the natural disaster exception to this 1988 law provides that no notice will be required if the plant closing or mass layoff is due to any form of natural disaster, such as a:

  • Flood;
  • Earthquake; or the
  • Drought currently ravaging the farmlands of the US.

The 5th Circuit found that the use of the term "such as" by Congress indicates that natural disaster includes events of the same kind as floods, earthquakes and droughts." By the late 1980s. Congress was familiar with pandemics and infectious diseases," the 5th Circuit noted. Thus, the fact that it chose not to include terms like diseases, pandemic or virus shows that those terms were deliberately excluded from the mass layoff law's exception.