HARRISBURG – Large employers typically must give workers two months warning before plant closings, but the law includes three exceptions, including one for faltering businesses that are up for sale or can’t find financing, according to the state Department of Labor and Industry.
When Snyder County cabinet manufacturer Wood-Mode announced on Monday that the Kreamer factory was closing and would cost 938 people their jobs, company officials said they couldn’t provide earlier notice to workers because executives had been trying to sell the company in a bid to keep the factory open.
The Worker Adjustment and Retraining Notification Act notice indicated that administrative workers would be laid off immediately on Monday and production workers would be laid off in phases ending by May 24. The WARN notice is intended to provide an opportunity for the state to start trying to help workers before they’re let go, said state Sen. John Gordner, R-Columbia County, whose district includes Snyder County.
“To their credit, the Rapid Response Team is moving quickly” with sessions scheduled next week, including an event on May 21 at Susquehanna University for Wood-Mode workers.
The state Department of Labor and Industry’s WARN Notice website includes notices from 40 companies in 2019. The Wood-Mode closing affects the largest number of workers and it’s one of just three notices that indicate the closing was taking effect immediately.
The faltering company exception to the WARN notice requirements “covers situations where a company has sought new capital or business to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings,” said Penny Ickes, a spokeswoman for the Department of Labor and Industry.
“If an employer provides less than 60 days’ notice of a closing or layoff and relies on one of these three exceptions, the employer bears the burden of proof that the conditions for the exception have been met,” Ickes said.
But the only way for workers to challenge the company’s actions would be to file a lawsuit, she said.
Attorneys contacted for this story said that in other cases, displaced workers have filed lawsuits either as individuals or as a group through class-action lawsuits.
Attorney Joe Sauder said attorneys might also argue the company could have been more transparent
“A closure like this is obviously devastating to the families who were immediately impacted and the community as a whole,” said Sauder, an attorney with Sauder Schelkopf, a Berwyn-based law firm that represents employees in WARN Act cases. “We look forward to speaking with former employees in an effort to try to recoup what they are entitled to under the WARN Act.”
In such cases, attorneys for the workers might challenge the company’s actions by questioning things like how realistic was the expectation that a potential sale was in the offing, said Jeff Schott, an attorney for the Harrisburg law firm of Ira H. Weinstock Attorneys at Law.
If successful, the company could be ordered to pay the workers’ legal fees. But the workers will generally only stand to get paid
Schott said he couldn’t comment on the merits of a challenge to the Wood-Mode WARN notice exception because he wasn’t familiar with the situation. But he said that other workers have won legal challenges when companies were found to have failed to provide the notification required by the law, he said.
“We’ve won cases like that,” Schott said.
Sauder said his firm recently represented 300 workers who won a $1.5 million settlement after they challenged the WARN notice provided when they were laid off by a Texas aviation firm in 2017.