In the case of Meadows v. Latshaw Drilling Corporation, the United States District Court for the Northern District of Texas granted Latshaw Drilling Corporation’s Motion for Summary Judgment denying the applicability of the Worker Adjustment and Retraining Notification (WARN) Act to recent layoffs by Latshaw. Crowe Dunlevy attorneys Madalene A.B. Witterholt and Christina F. Cupp successfully argued Latshaw was not required to provide WARN Act notice to its employees.
The WARN Act requires employers give 60 days advance written notice to employees who will be affected in the event of a layoff or plant closing, assuming the employer meets certain minimum criteria. One of the requirements for the obligation to give a WARN Act notice is that the organization employ at least 50 employees at the single site of employment affected by the layoff or plant closing. Notice is also required to be given to state agencies and local municipalities of the impending layoffs. The Department of Labor may also issue $500/day penalties for failure to provide the proper notices.
At the time of its 2015 layoffs, Latshaw employed more than 1,100 total employees in multiple states. However, the court found each of Latshaw’s land-based oil rigs equated a single site of employment. Since no more than 24 employees were employed at any individual rig, a WARN Act notice was not required. If Crowe Dunlevy had not been successful, the client most likely would have been required to pay 60 days’ wages and benefits to hundreds of employees, as well as attorneys’ fees to the employees’ legal counsel. Plaintiffs’ counsel was also seeking class certification—which was not granted in light of the dismissal of the case.
We believe this is the first decision of its kind in the United States. Multiple district court cases have been filed and are pending regarding the applicability of the WARN Act to land-based drilling rigs.
Crowe Dunlevy took an aggressive approach and filed for summary judgment before provisional class certification could be granted and before discovery was complete. This nontraditional approach resulted in an immediate decision regarding the seminal issue of whether a drilling rig is a single site of employment under the WARN Act, or whether employees working at drilling rigs located miles apart should be combined for purposes of determining whether WARN Act notification is required. The court’s finding that consolidation was not appropriate is beneficial not only to the oil and gas industry but is also instructive for other employers facing layoffs and/or plant closings involving multiple sites of employment.
Contact Madalene A.B. Witterholt or any other Crowe Dunlevy Labor & Employment attorney with questions regarding the WARN Act and its impact to your business.