Five years after enacting its Worker Adjustment and Retraining Notification (WARN) Act, Delaware has issued its first set of WARN Act regulations. The regulations generally mirror federal WARN Act regulations, but there are notable differences that employers with employees in Delaware should know.

Notice Content Requirements

Since its passage, the Delaware WARN Act has created uncertainty for employers about what must be included in WARN notices. Under the law, WARN notices to employees, unions, the Delaware Department of Labor, and the Delaware Workforce Development Board must include the elements required by federal WARN. Without clarifying which notices or distinguishing among various recipients, Delaware WARN requires that notices include:

• “the name, job title, home address, telephone number, and email address of each planned dislocated worker”;
• “general information regarding any payouts, severance packages, job relocation opportunities and retirement options”; and
• a statement about “whether the employer is self-insured for workers’ compensation insurance.”

Thus, unlike the federal WARN Act, Delaware WARN does not expressly include content distinctions between the various notices and recipients. Some employers that were reluctant to give each affected employee the names and contact information of all other affected employees have argued, based on the statute’s explicit reference to the federal WARN elements, that names and contact information only need to be included in the union notices because that is what federal WARN requires.

The Delaware WARN regulations clear up this ambiguity. In a separate subsection for employees and unions, the regulations clarify that the names, job titles, and contact information for each affected employee (as well as the other required information) must be included in notices to all affected employees and employee representatives.

The regulations also add a requirement that employee and union notices include a prescribed paragraph concerning unemployment insurance, job training, and reemployment services for which affected employees may be eligible. The paragraph is nearly identical to the paragraph required under New York WARN.

Finally, the Delaware WARN regulations suggest that notices to employees and employee representatives may including additional information useful to employees, such as the estimated duration of a temporary action.

Service of Notice

The Delaware WARN regulations also add several formality requirements. Under the regulations:

• Notices must be on official employer letterhead and signed by a representative of the employer with authority to bind the company.
• Notices to the Delaware Department of Labor require either original or digital signature and a statement by the signature attesting to the truthfulness of the information provided in the notice.
• Notices to the Delaware Department of Labor and the Delaware Workforce Development Board should be “mailed.” The regulations clarify that when an employer uses first class or certified mail to serve a notice, the notice must be postmarked (not received) at least 60 days before the employment loss.

The regulations are silent on whether email notice is permitted to any of the required recipients.

Sale of a Business

Under the current law, in the case of a sale of part or all of a business, the seller is responsible for providing the WARN notice for any triggering event up to and including the effective date of sale. After the effective date of the sale, the purchaser takes on the responsibility for providing notice.

However, under the new regulations, the law shifts the responsibility to whichever employer – seller or buyer – is ordering the event causing the mass layoff, plant closing, or relocation. For example, if the employment loss is set to occur less than 60 days after the sale closes, the buyer may be responsible for ensuring proper notice is timely given, although the sale has not yet been completed by the time notice is required.

Stricter Requirements for Existing Exception

Under the new regulations, some of the previously available exceptions now include additional requirements. Among the five existing exceptions to the 60-day notice requirements – (1) the “seeking-capital-or-business exception,” (2) the “unforeseen-business-circumstances exception,” (3) the “temporary-employment exception,” (4) the “natural-disaster exception,” and (5) the “strike-or-lockout exception,” the following three now require additional conditions:

To qualify for the "seeking-capital-or-business exception," the employer must:

• identify the specific actions taken to obtain such capital or business;
• show there was a realistic opportunity to obtain the capital or business sought;
• show the capital or business sought would have been sufficient to enable the employer to avoid or postpone the plant closing, mass layoff, or relocation; and
• show that a potential customer or financing source would have been unwilling to provide the new business or capital if notice were given.

Notably, under the new regulations, the employer’s actions are determined in a company-wide context. In short, an employer with access to capital markets or with cash reserves may not avail itself of this exception by looking solely at the financial condition at a single site of employment to be closed.

To qualify for the “temporary-employment exception,” the employer must:

• inform employees at hire that the position is temporary;
• show that industry norms do not define temporary status; and
• not retroactively label permanent jobs as temporary to avoid notice requirements.

To qualify for the “natural-disaster exception,” the employer must:

• show the mass layoff or plant closing would not have occurred but for the natural disaster, and the natural disaster was a substantial factor in bringing about the mass layoff or plant closing.

Under the new regulations, the term “natural disaster” has been expanded to cover a broader range of conditions, such as floods, earthquakes, droughts, wildfires, storms, tidal waves, tsunamis, any form of a pandemic declared by the Centers for Disease Control and Prevention, and similar effects of nature.

Extensions

Under the new regulations, the date a mass layoff begins is determined by when the first affected employee was laid off. If a mass layoff, plant closing, or relocation is delayed:

• for less than 60 days, an additional notice shall be provided as soon as possible, and must include a reference to the earlier notice, the new date of action, and the reasons for the delay. This additional notice shall meet all original requirements.
• for 60 days or more, a new notice is required, which follows all the same requirements as the original notice.

If an employer decides to continue operations and forego the announced plant closing, mass layoff, or relocation, then the employer shall give a notice of rescission to the Department as soon as possible after the decision is made, including reference to the earlier notice and the reason why such action is no longer required.

Recommendation

The Delaware WARN Act has always been complex, even prior to these new regulations. While the regulations have provided more guidance, they have also further complicated employer obligations under the law. With these changes, employers must stay ahead by understanding these regulations well to make informed decisions. To safeguard business plans and avoid compliance issues, employers are strongly encouraged to consult with counsel to ensure they are fully prepared to meet the new requirements.