By George J. Miller
On February 16, 2011, the U.S. Court of Appeals for the Sixth Circuit (which hears appeals from federal district courts in Michigan, Ohio, Kentucky, and Tennessee) held that former employees who sue for violations of the Worker Adjustment and Retraining Notification Act (WARN) do not have a right to a jury trial. In this case, a class of former employees of Emery Worldwide Airlines sued the company, claiming that Emery violated their rights under WARN by not giving them the 60 day notice required by the law before they were permanently laid off. After a four day trial conducted by the court without a jury, the trial court ruled against the employees, holding that they were not entitled to a 60 day notice prior to Emery permanently ceasing operations.
The employees appealed both the decision that they were not entitled to a 60 day notice and the trial court’s earlier decision that they were not entitled to a jury trial. The Court of Appeals affirmed the trial court on both issues. With respect to the jury trial issue, the Court of Appeals agreed with the trial court that the Act’s remedy for violations–back pay and benefits for up to 60 days–is more like restitution for wrongfully withheld pay than it is like legal damages. Such restitutionary or “equitable” remedies are traditionally reserved to courts, not juries. An additional basis for the appellate court’s decision was a provision in the Act which allows the trial court to reduce the amount of liability in cases in which the trial court finds that, despite the violation, the employer had a reasonable and good faith belief that it was complying with the Act. The Court of Appeals reasoned that this provision of the law places the entire damage award within the discretion of the trial judge.
The upshot of this decision is that employers in states in the Sixth Circuit need not worry about the prospect of a jury trial in WARN cases. An added benefit of the decision is the emphasis on the trial judge’s authority to reduce damages and penalties when employers make reasonable, good faith efforts to comply with the Act.