By: Lisa M. Watanabe

The recent holiday shopping season was not so merry and bright for a number of U.S. retailers due to price discounts, stagnant wage growth and low consumer spending.  The disappointing results have prompted several retailers to close their stores and announce layoffs.  Employers considering such an action should familiarize themselves with the federal Worker Adjustment and Retaining Notification (WARN) Act and related state laws that require employers to provide notice in advance of any closings or layoffs.  The following is a brief overview of those requirements:

What is the federal WARN Act?

The federal WARN Act was enacted in 1988 to afford workers and their families some transition time in the event of a plant closing or mass layoff to adjust to the prospective loss of employment and to seek/obtain other jobs.  WARN requires covered employers to provide 60 days’ notice to employees, union representatives, state agencies and localities prior to any closings or layoffs.

In addition to the federal WARN Act, the following states have enacted similar laws (aka mini-WARN acts) governing advanced notice: California, Connecticut, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, Ohio, Oregon, South Carolina, Tennessee and Wisconsin.  While many state laws mirror the federal WARN Act, there are a few states with more restrictive provisions.  Employers should contact counsel to obtain information on the laws in these states.

Does the federal WARN Act apply to every employer?

No.  WARN applies to employers with 100 or more full-time employees, or 100 or more full-and part-time employees who work at least a combined 4,000 hours per week.

When is an employer required to give advance notice?

The following three events trigger an employer’s duty to provide notice under the federal WARN Act: (1) a facility or operating unit shut downs for more than six months, or when at least 50 full-time employees lose their jobs during any 30-day period at a single site of employment; (2) layoffs of at least 50-499 full-time employees for at least six months during any 30-day period at a single site of employment, if they represent at least 33% of the total active workforce (if the layoff affects 500 full-time employees the 33% rule does not apply); and (3) a series of terminations or layoffs over a 90-day period, none of which individually would be covered under WARN, but which add up to numbers that would require WARN notice.

What type of notice is required?

Absent exceptions for unforeseeable business circumstances or natural disasters, written notice must be provided 60 days prior to the closing or layoffs to employees or their representative, the state/designated unit that offers assistance to dislocated worker units and the local government.

What are the consequences for violating the federal WARN Act?

An employer may be liable for back pay, benefits and civil penalties for each affected employee for each day of defective notice.

by Lisa M. Watanabe

In recent years, retailers, grocery stores and banks have been hit with a wave of lawsuits over California’s suitable seating requirements set forth in §14 of the Industrial Welfare Commission’s Wage Orders.  (See for § 14 in 16 of the 17 industry-specific Wage Orders).  Despite the surge in lawsuits, there continues to be several unanswered questions regarding the interpretation of subsections (A) and (B) to §14 which state the following:

  1. All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.
  2. When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

For example, how does an employer determine when the “nature” of an employee’s work “reasonably permits the use of seats” (in which case §14(A) would apply) or generally “requires standing” (in which case §14(B) would apply)?  Additionally, as is often the case with retail employees such as a cashier or clerk, what if an employee performs a variety of assigned job duties, some of which may permit seating and some which may not?

A pending case before the Ninth Circuit – Kilby v. CVS Pharmacy, Inc. – should provide answers to courts and litigants to these questions.  Kilby, a former cashier/clerk, filed a representative suit against CVS in 2009 for its alleged failure to provide her with suitable seating under §14(A).  The district court dismissed the lawsuit on the grounds that §14(A) was not applicable to Kilby’s job position.  (See Order Granting CVS’s Motion for Summary Judgment.)  In its decision, the district court interpreted §14(A) as requiring a “holistic” assessment of an employee’s entire range of assigned duties to determine whether the employee’s job “as a whole” reasonably permitted the use of seats (§14(A)) or generally required standing (§14(B)).  The district court also considered CVS’s business judgment in its decision – i.e., CVS expected its clerks/cashiers to perform their work while standing, and trained them to do so (among other things, CVS showed a training video to new hires that reinforced its expectations of them to perform a variety of work while standing).

On appeal, Kilby contends that the district court misinterpreted §14 and, and in doing so, failed to account for evidence that she spent approximately 90% of her time performing duties that could have been done while seated.  The district court’s interpretation of §14, according to Kilby, allows employers to deprive employees of seats “simply by assigning a handful of tasks that require standing … even if the workers’ other assigned tasks consume a significant portion or even the vast majority of the work day.”  As such, Kilby requests the Ninth Circuit to interpret §14 as guaranteeing employees the right to suitable seating whenever a specific task or duty performed for an appreciable period of time can reasonably be accomplished while seated.  Kilby also challenges the district court’s consideration of CVS’s business judgment in determining the nature of an employee’s work on the grounds that it frustrates the Industrial Welfare Commission’s intent to create an objective standard for determining which duties could be performed while seated.

The Ninth Circuit now has an opportunity to clarify the legal standard for §14 and offer much-needed guidance on the scope of suitable seating requirements for employees, including those individuals with mixed seating and non-seating job tasks.   Moreover, the case will clarify what role, if any, an employer’s business judgment, expectations and training may have in assessing the nature of an employee’s work.  The parties’ briefing has been completed and oral arguments before the Ninth Circuit (which should be scheduled and posted on the Ninth Circuit’s website — — in the next few months) will surely keep courts, litigants, and employers on the edge of their seats.