DHL wins labor appeal
DHL has successfully defended a labor claim brought on by the 2009 breakup of its U.S. domestic shipping division.
The case concerned the amount of advance warning that is required by law before "mass layoffs or plant closings" as laid out in the Work Adjustment and Retraining Notification (WARN) Act. The statute requires 60 days' notice to workers; two former employees had alleged that the company didn't adhere to the statute. WARN is triggered only when a certain number of employees are affected by a closing in a certain window of time.
A lower court ruled that, in this instance, WARN didn't apply to DHL's closings, and a three-judge panel in the Seventh Circuit Court of Appeals last week affirmed the ruling.
DHL was able to move around the federal statues by offering voluntary severance packages to workers in its six Chicago facilities that were affected by the termination of services. These packages were negotiated in concert with the two labor unions that represented DHL employees and were approved by representatives of the workers. More than 500 employees were given either 10 weeks' pay or four weeks' pay in exchange for waiving their rights to bring future actions against DHL. Once workers voluntarily accepted the buyout, they were, in the eyes of WARN, no longer affected by layoff.
The court's decision has wide applications in any industry experiencing massive layoffs or business closures. It provides a legal precedent for companies dealing with unfortunate situations and how they might deal with laying off employees.
"For employers, what this does is it gives you guidance … so that if you’re faced with this situation, you don’t just go straight to, OK, we have to go ahead and give notice under WARN,” said DHL’s lead attorney, Richard Lapp of Seyfarth Shaw. “Maybe not."