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New Delaware WARN Act Heightens Notice Requirements for Delaware Employers

July 3, 2018

The Delaware legislature recently passed the Delaware Workers Adjustment and Retraining Notification Act (the “Act”), which is the state’s version of the federal Worker Adjustment and Retraining Notification Act (“federal WARN Act”). It awaits the Governor’s signature.

The Act requires certain employers to provide 60 days’ advance written notice prior to an employment loss due to either a “mass layoff” or “plant closing” (each triggered based on certain defined thresholds, but in neither event less than 50 impacted employees), or a relocation of all or substantially all of the operations to another location 50 or more miles away (with no minimum number of impacted employees, provided the employer has the requisite number of employees to be an eligible employer). Such advanced notice must be provided to: (1) affected employees (as defined in the Act) and their representatives, (2) the Delaware Department of Labor, Division of Employment and Training (“DET”), and (3) the Delaware Workforce Development Board. The Act applies to Delaware employers with 100 or more employees, excluding part-time employees or employers with 100 or more employees that collectively worked at least 2,000 hours per week. The Act’s main objective is to ensure DET receives early notification of employment losses to quickly assist dislocated workers with minimal disruption to their economic security.

Under the Act, the notice to employees must include not only all the elements required by the federal WARN act, but also certain information regarding all workers an employer is planning to release. Additionally, the notice must provide general information regarding severance packages, job relocation opportunities, retirement options, and any payout that an employer plans to offer the dislocated worker. Though the Act specifically differentiates mass layoffs, plant closings, and relocations, all job losses within a 90-day period may trigger the notice requirement, unless an employer can show that each loss is for a separate and distinct cause of action.

Notably, the Act, like the federal WARN Act, provides exemptions from the notice requirement in certain circumstances. Notice is not required if the employment loss is due to: (1) a physical calamity, act of terrorism, or war, (2) an unforeseeable business circumstance, (3) the completion of a project where the affected employees knew their employment was conditioned on the project, (4) natural disasters, or (5) strikes and lockouts. An employer is also exempted if, at the time notice was required, the employer was actively seeking business or capital that would postpone the employment loss, and the employer reasonably believed in good faith that providing notice would frustrate those efforts. Although these circumstances exempt an employer from the 60-day notice requirement, an employer must still provide as much notice as practical in a timely fashion.

If timely notice is not provided, the employer may be liable for back pay (as defined in the Act) and the value of any benefits, including medical expenses, for up to 60 days or half the number of days the employee was employed, whichever is smaller. Importantly, any payment made under federal law satisfies payment under the Act. The penalty for an employer in violation of the Act is $1,000 for every day notice was not provided or $100 per day for each terminated employee, whichever is greater. However, the maximum penalty cannot exceed the maximum penalty under federal law.

The Secretary of the Delaware Department of Labor will establish rules and regulations to execute the Act, including the power to investigate violations and hold administrative hearings. Additionally, the Secretary has the power to use its discretion to reduce the amount of employer liability if the employer in good faith believes its actions or failure to act is not a violation of the Act. Outside of possible administrative proceedings, the Act also grants an employee, the local government, or an employee’s representative the right to sue the employer for damages and attorneys’ fees in any court of competent jurisdiction within three years of a violation.

The Act will take effect 180 days after its enactment into law.

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