Easom v. US Well Servs.

In a recent case on appeal to the 5th Circuit, the Court held (1) that COVID-19 does not count as a “natural disaster” for the purposes of the WARN Act’s notice requirement exception and (2) that the standard for the WARN Act’s natural disaster exception is proximate causation. Terminated US Well Services, Inc. employees filed a class action suit against their former employer for US Well’s failure to provide the WARN Act’s required 60-day notice before a plant closing or mass layoff. The WARN Act excludes this requirement if the closure or layoffs directly result from “any form of natural disaster,” in which case an employer does not have to provide such notice. US Well argued that COVID-19 should be considered a natural disaster, such that the exception would be in effect at the time of the employees’ termination.

The 5th Circuit rejected this argument, finding instead that the Department of Labor’s interpretation of the Act, which narrowed the meaning of “natural disaster” to include only those of a hydrological, geological, or meteorological nature (such as floods, earthquakes, droughts, etc.), was controlling. Additionally, the DOL’s interpretation of the WARN Act exception required that the employer must prove that the closing or mass layoff was “a direct result of a natural disaster.” In deferring to the DOL’s interpretation and using Supreme Court and 5th Circuit precedent, the Court held that the exception imposes a proximate cause requirement on employers whose closings or layoffs fall under the natural disaster exception.