5th Circuit: COVID-19 not a natural disaster for purposes of WARN Act

The COVID-19 pandemic does not constitute a “natural disaster” for purposes of the Worker Adjustment and Retraining Notification Act, the 5th U.S. Circuit Court of Appeals held last week in a case involving former oil and gas workers of US Well Services (Easom, et. al. v. US Well Services, Inc.), No. 21-20202 (5th Cir. June 15, 2022)).

In March 2020, US Well Services terminated the employees “‘due to unforeseeable business circumstances resulting from a lack of customer work” caused by factors including “the unexpected adverse impact that the Coronavirus has caused.’” The workers sued, alleging a violation of the WARN Act’s notice requirements. US Well Services argued that COVID-19 was a natural disaster and that, therefore, the WARN Act’s natural disaster exemption applied.

A district court agreed that COVID-19 was a natural disaster, but it also determined that the natural disaster exemption incorporates a “but-for” causation standard. The court further determined that the record did not show whether COVID-19 was the but-for cause of the layoffs. The 5th Circuit reversed, holding that COVID-19 was not a natural disaster and that the natural disaster exemption incorporated a “proximate” causation standard.

Under the WARN Act, employers must provide at least 60 calendar days of advance written notice of a plant closing or mass layoff affecting 50 or more employees at a single site of employment. No notice is required if the closing or layoff “is due to any form of natural disaster, such as a flood, earthquake, or the drought currently ravaging the farmlands of the United States.”

However, the 5th Circuit applied a textual analysis to determine that Congress “intended to limit ‘natural disaster’ to hydrological, geological, and meteorological events.” It further determined that exemptions to the law’s notice requirements should be narrowly construed.

“We, therefore, decline to expand the definition of ‘natural disaster’ beyond what is justified by the Act’s statutory language, context, and purpose,” the 5th Circuit concluded. The 5th Circuit’s ruling provides an important perspective for employers to consider in the context of mass layoffs that may have been related to the pandemic.

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