Eleventh Circuit Rules That Casino Failed to Meet WARN’s Unforeseeable Business Circumstances Exception

Randi Klein Hyatt
Randi Klein Hyatt

In Weekes-Walker v. Macon Cnty. Greyhound Park, Inc. (11th Cir., No. 12-14673, Aug. 5, 2013), the employees of Macon County Greyhound Park Inc. (“MCGP”) filed suit under the Worker Adjustment and Retraining Act of 1988 (“WARN”), alleging that MCGP violated WARN’s requirement that prior to a plant closing or a mass layoff, an employer must provide employees with 60-days notice.

In January 2010, MCGP, an Alabama casino, temporarily laid off 68 employees and failed to give them advance notice.  A month later, in in response to an adverse Alabama Supreme Court ruling concerning the gaming industry, MCGP laid off its remaining employees.  Though the company met with employees, “[t]here was no mention of the WARN Act in any of these post-layoff communications, nor any listed reason for not complying with the WARN Act’s 60-day notice requirement.”  MCGP then reopened its gaming operations in mid-2010, but it permanently closed its electronic gaming activities on Aug. 9, 2010.  Again, MCGP did so without any advance notice.

The employees filed a lawsuit in the U.S. District Court for the Middle District of Alabama.  One statutory defense to WARN’s notice requirement is the “unforeseeable business circumstances” exception.  But, “even where the defense is properly invoked, some notice must be given.”  Because no notice was provided, the district court ruled in favor of the employees.  MCGP appealed to the Eleventh Circuit.

The Eleventh Circuit rejected MCGP’s reliance on the unforeseeable business circumstances exception, noting that an employer invoking the defense “shall give as much notice as is practicable and at that time shall give a brief statement of the basis for reducing the notification period.”  Such notice should be a specific statement that informs employees of the nature and expected duration of a layoff, the expected date, any applicable “bumping” rights, and the name and telephone number of a company contact person.

The appeals court also held that MCGP’s efforts to publicize its dispute with Alabama officials did not satisfy WARN’s requirement for a “brief statement of the basis for reducing the notification period.”  It did not help MCGP’s position that its published material confirming its position on electronic gaming never mentioned WARN, and never gave any specific information to employees.  Concluding that “employers must give notice to affected employees before they can exercise the unforeseeable business circumstances defense,” the court concluded that MCGP failed to meet the requirements of the exception and therefore violated the WARN Act.


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