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Mass layoffs in tech spur litigation

New York Teacher

The thousands of layoffs at Twitter and other tech companies in recent months have renewed a focus on the decades-old federal Worker Adjustment and Retraining Notification (WARN) Act, which requires written notice of at least 60 days for mass layoffs and plant closings.

So far this year, tech companies have laid off nearly 140,000 people. Business magnate Elon Musk reduced Twitter’s workforce by 50%, or 3,700 employees, after acquiring it in October. Five former Twitter employees allege WARN violations in a class action lawsuit against Twitter.

In November alone, Amazon laid off 10,000 people and Meta, 11,000.

Joseph Maya, a managing partner at Maya Murphy, said the law firm received more WARN calls in one week than in his entire career. “Do not be surprised if there’s tremendous litigation,” he said.

But WARN violations are not common because companies often go bankrupt after cutting jobs, said Karl Gerber, the founder of Employment Lawyers Group in California. Also, a mass layoff must occur at a single location to fall under the law, he said.

Employers that do not provide 60 days’ notice likely would not be penalized for violations if they offered severance and benefits, and Musk tweeted that Twitter’s packages meet those requirements.

Forbes Advisor, Nov. 23

Related Topics: Labor issues