Monday, May 12, 2014

ClearEdge Power Employee Files Class-Action Lawsuit

A former Connecticut employee filed a class-action lawsuit against ClearEdge Power alleging that the company failed to give the required 60-day notice before the company laid off 268 of its employees last week. Instead, the company issued a letter to its employees explaining that giving more notice would have prevented the company from finding new investors and customers and would have made it more difficult to collect payments from existing customers.

The Worker Adjustment and Retraining Notification Act (WARN) is a federal law, administered by the Department of Labor, that requires employers to provide their employees with 60 calendar days notice of plant closings and mass layoffs. WARN applies to employers with 100 or more employees. The advanced notice requirement is intended to give employees and their families time to transition to the loss of employment and time to find new jobs.

WARN does contain exceptions for faltering companies and companies that encounter unforeseen business circumstances. ClearEdge Power maintains that under these exceptions, it provided its employees with as much notice as possible, given the company’s circumstances.

Although the class-action has only just begun, it will be interesting to see whether the ClearEdge Power fell within one of the WARN Act’s exceptions or whether the employees were entitled to the 60 days notice of the shutdown.