Business Litigation Alert: "Legal Considerations During Massive and Quick Layoffs"

Class Action Lawsuit Recently Filed Against Drilling Company for Alleged WARN Act Violations

The Worker Adjustment and Retraining Notification Act (“WARN”) requires certain companies who conduct large and quick layoffs, as well as full or partial plant and facility closings, to comply with specific notice provisions to the company's employees.  In the face of the volatility in the energy industry, at least one class action lawsuit has been filed in which Plaintiffs claim that they were terminated without the proper written notice required by the WARN Act. 

Damages for a violation of the WARN Act may include an amount equal to back pay and benefits for the period of the violation (up to 60 days) as well as reasonable attorney’s fees. While there are exceptions that may apply under the WARN Act, including the faltering company and unforeseeable business circumstances exceptions, any company considering significant layoffs should evaluate the WARN Act before acting.

To see the petition for Mercer et al v. Patterson-UTI Drilling Company, LLC filed in the U.S. District Court for the Southern District of Texas, Houston Division (4:15cv00346), click here.

While this may be an isolated case, it may also be a test case for future class actions suits given the current economic environment in the energy industry.  If you have 100 or more employees, are considering a layoff or plant/facility closing and have questions or would like to discuss Porter Hedges LLP’s ability to help counsel you in such a circumstance, please contact us.

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