Hunton Employment & Labor Perspectives

The Worker Adjustment and Retraining Notification (“WARN”) Act requires employers to give employees at least 60 days’ notice when a “mass layoff” is about to occur at a “single site of employment,” which is typically a single location or a group of contiguous work locations.  Courts are beginning to confront the question of what constitutes a “single site of employment” under the WARN Act for employees working remotely, and how remote work policies impact class certification considerations.  Given the prevalence of remote work during the pandemic and the likely continuation of such work arrangements, these decisions are of particular importance to employers considering mass layoffs or facing class actions based on the application of remote work policies or practices.

The United States District Court for the Eastern District of Virginia in Piron v. General Dynamics Information Technology Inc. recently addressed this issue in the context of a motion to certify a class under Rule 23(b)(3).  There, the proposed class consisted of employees who had worked remotely under the defendant employer’s Flexible Work Location policy.  Under this policy, the employees were given the option of working from a company provided setting such as an office or from an alternative setting like their home.  Evidence gathered during litigation showed that the employees frequently moved from location to location to conduct their work duties.

When the employees were laid off, they filed a class action lawsuit against the defendant employer under the WARN Act.  The proposed class asserted they weren’t given the 60 days’ notice required for “mass layoffs” occurring at a “single site of employment.”  The employer opposed class certification, arguing that the putative class could not show that the questions of law and fact for the class “predominate” over the same questions for the individual plaintiffs.  Specifically, the employer argued that the proposed class could not satisfy the predominance requirement because the plaintiffs did not work at a “single site of employment,” and thus could not trigger the WARN Act’s notice requirements for mass layoffs.   Instead, the court would have to look at each class member’s individual situation to determine the place of employment.

The Court began its class certification analysis by highlighting what it considered the relevant WARN Act regulation governing the case.  That regulation, which is usually used for people without a fixed work location like bus drivers and railroad workers, provides that a single site of employment for those who travel from location to location is (1) their home base, (2) the location from which their work is assigned, or (3) the location to which they report.  While not deciding how the regulation applies in this case, the district court (and the parties) largely agreed that the regulation would guide its analysis of the place of employment for remote workers under the WARN Act.

The Court then rejected the employer’s predominance argument, ruling that the class could be certified under Rule 23(b)(3).  The Court emphasized that the remote-work policy applied to all employees, and this policy would guide its determination of what constituted the site of employment for each employee.  Thus, the critical inquiry—the application of the remote work policy and its application to the work arrangements of the employees—would be common to all potential class members.  Because of this, the putative class members met Rule 23(b)(3)’s predominance requirement.  Essentially, since the putative class members were all covered under the same “mobile workforce” policy and since the policy was uniformly applied, the Court would be able to determine on a class-wide basis whether the employees established a “single site of employment.”

This case illustrates one of the wide variety of pitfalls that can arise with the shift from an office workforce to a remote or hybrid workforce—the possibility of layoffs to a remote work force triggering WARN Act liability.  It also highlights how the use of a common remote work policy or practice for remote workers can render a class of workers, who may otherwise not be similarly situated, sufficiently similar in both fact and law to meet the predominance requirement of Rule 23(b)(3).  With many companies shifting to a fully mobile workforce or hybrid environment, employers will want to consult with employment counsel to ensure compliance with all employment laws, especially those like the WARN Act that are seemingly inapplicable to the particular employment decision.