Older Worker Benefit Protection Act
The key thing to know: don't sign the severance agreement right away. If the person is over 40, federal law (the Older Workers Benefit Protection Act) gives them extra protections, and a few deadlines come up fast.
Severance and legal rights
• If they were let go as part of a group layoff, they get 45 days to review the release and 7 days to revoke it after signing. Allstate also has to give a written list of the job titles and ages of the people selected and not selected. That list is worth reading closely for any age pattern.
• Severance terms can often be negotiated: more weeks of pay, a prorated bonus, equity vesting, outplacement help, or extended healthcare.
• With a release this big, paying an employment attorney for an hour to review it is usually money well spent.
WARN Act
Here's what the federal WARN Act requires of covered employers (29 U.S.C. §§ 2101–2109; 20 CFR Part 639):
1. Determine coverage
- You're covered with 100+ full-time employees, or 100+ employees working a combined 4,000+ hours a week, not counting overtime.
- Part-time workers (under 20 hours a week, or employed fewer than 6 of the last 12 months) don't count toward the 100. They're still entitled to notice if they're affected.
2. Identify a triggering event
- Plant closing: a shutdown of a single site, or of a unit within it, that causes 50+ employment losses in a 30-day period.
- Mass layoff: 500+ employees at one site, or 50–499 if that's 33% or more of the site's workforce.
- "Employment loss" means a termination (other than for cause, a voluntary resignation or retirement), a layoff longer than 6 months, or a cut of more than 50% in hours in each month of any 6-month period.
- Aggregation: separate smaller cuts within 90 days add together unless you can show they had distinct causes.
3. Give 60 days' written notice to:
- each affected employee, or their union rep if they're represented
- the state dislocated worker unit (in Tennessee, the Dept. of Labor & Workforce Development)
- the chief elected local official
4. Include the required content
- For employees: whether the action is permanent or temporary, the expected date, any bumping rights, and a company contact.
- For state and local officials: the job titles affected, the number of affected employees, and union information.
5. Watch the special situations
- Sale of a business: the seller gives notice up to the closing date, and the buyer is responsible after that.
- Temporary layoffs that get extended past 6 months can trigger notice at the point of extension.
- Exceptions can shorten the notice period, but you still have to give as much notice as you can, plus a brief statement of why it's short. The exceptions are faltering company (plant closings only), unforeseeable business circumstances, and natural disaster.
- Exemptions: temporary facilities or projects, strikes and lockouts, and offers to transfer employees within a reasonable commuting distance.
6. Know the liability
- Each affected employee can recover back pay and benefits for each day of violation, up to 60 days.
- Failing to notify local government carries a penalty of up to $500 a day.
- Courts can award attorneys' fees.
- Many employers give "pay in lieu of notice," meaning 60 days of pay and benefits. That reduces the damages, but it isn't technically compliance.