Remember the WARN Act

A few years ago, cash-strapped states (and their eager vendors) found a way to get the state equivalent of money from the sofa cushions by going after life insurers that had not done a good job of getting benefits out to hard-to-find beneficiaries.

The states scooped up the unclaimed property, and the interest earnings on all of that unclaimed property.

Frank Scruggs, a former Florida labor secretary who now represents employers in labor disputes as a lawyer at Berger Singerman, said in an interview that he thinks local governments may notice a possible moneymaker of their own: Going after employers that fail to send the right Worker Adjustment and Retaining Notification Act notices.

The WARN Act requires most employers with 100 or more employees to send notices 60 days ahead of time when they are closing plants and organizing mass layoffs.

The law requires the affected employers to send the notices to managers, supervisors, workers’ union officials, the chief elected official in the employer’s town, and the dislocated worker unit for the employer’s state as well as to rank-and-file workers.

Workers, the workers’ unions — and units of local government — can all bring either individual or class-action suits.

Even if the potential plaintiffs are not all that interested in filing a WARN Act suit, the law gives lawyers a financial incentive to get the plaintiffs interested in suing, by allowing a court to include reasonable attorney’s fees in a judgment.