- summary
- Law firms
- Associated documents
- The federal WARN law does not require notification to employees of contractors, the court says
- 4,000 workers lost their jobs after the shutdown of the nuclear power plant
- Business groups said the case could impact a COVID-19 litigation
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(Reuters) – A US appeals court said Tuesday a company that had shut down construction of a nuclear power plant was under no obligation to give advance notice that its contractors’ 4,000 employees would be losing their jobs.
The decision of a unanimous, three-judge panel of the U.S. 4th Court of Appeals could be of greater concern to contract workers affected by large-scale layoffs from the COVID-19 era.
The court said that South Carolina utility company SCANA Corp was not the employer of the workers for the purposes of federal Worker Adjustment and Retraining Act (WARN) because SCANA did not control the contractors they employed.
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Another decision would inappropriately stretch the law, which requires at least 60 days’ notice for collective layoffs, and “expose plant owners to the prospect of uncertain and unclear liability,” the court said.
SCANA has been backed by trade groups such as the U.S. Chamber of Commerce, which issued an amicus letter saying that widespread application of WARN Act liability could have a devastating impact on companies involved in pending litigation over pandemic layoffs.
Plaintiffs’ attorneys at Raisner Roupinian and Klehr Harrison Harvey Branzburg did not immediately respond to requests for comment. Neither does Dominion Energy Inc, which SCANA took over in 2019. SCANA is represented by Ogletree, Deakins, Nash, Smoak & Stewart.
SCANA abruptly halted construction of the South Carolina facility in 2017 after the budget was exceeded, forcing contractors Fluor Corp and Westinghouse Electric Corp to lay off approximately 4,000 employees immediately.
A group of Fluor employees sued the company and SCANA earlier that year, claiming they had not received a proper WARN Act warning.
SCANA argued that it could not be held liable for not employing the Fluor employees. Fluor claimed that SCANA’s abrupt suspension of the project was an “unforeseen business circumstance” that exempted it from the WARN Act’s notification requirements.
In January, U.S. District Judge J. Michelle Childs issued a summary judgment on the companies.
The 4th Circuit Panel on Tuesday confirmed that SCANA has no stake in Fluor and Westinghouse, has not integrated its personnel policy with that of the contractor, and has not controlled the other companies or their employees.
“The scope of the [WARN Act] Liability is clear as it extends precisely to a company’s own employees, so companies don’t have to make difficult decisions about which unaffiliated companies are likely to have employees in any way affected by a plant shutdown, “wrote Circuit Judge J. Harvie Wilkinson .
The jury also included Circuit Judges Paul Niemeyer and Diana Motz.
The case is Pennington v Fluor Corp, 4th Court of Appeal, No. 21-1141.
For the plaintiffs: Jack Raisner of Raisner Roupinian; and Charles Ercole by Klehr Harrison Harvey Branzburg
For Fluor: Hagood Tighe by Fisher Phillips
For SCANA: Ted Speth from Ogletree, Deakins, Nash, Smoak & Stewart
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Daniel Wiessner
Dan Wiessner (@danwiessner) reports on labor and labor law as well as immigration law, including litigation and policy making. He can be reached at [email protected].
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