U.S. Navy ship at NASSCO
According to the website of the California Employment Development Department, employers should give a 60-day notice to employees and their representatives in advance of a "plant closing or mass layoff." The notices are in the form of a Worker Adjustment and Retraining Notification (WARN) published statement.
In March of 2014, 90 employees of National Steel and Shipbuilding Company (NASSCO) found out when they showed up for work that they would be laid off without pay for four to five weeks. There had been no WARN notice. Employees, represented by the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers, Local 1998, filed suit in Superior Court, demanding back-pay and significant statutory penalties.
The workers said the company's move should have been reported under the WARN provision as a layoff. NASSCO said WARN rules did not apply because this was a "temporary furlough" and not a "mass layoff."
Superior Court awarded the workers $211,405 in back-pay and pension benefits but refused to award them penalties. The trial court said that under NASSCO's staffing requirements, a short-term work stoppage is considered a "layoff." NASSCO appealed, and several companies filed briefs backing NASSCO. But on November 30 of this year, the Court of Appeal, Fourth Appellate District, upheld the trial court's decision, stating NASSCO had to pay the workers for back-pay and pensions, but they were not awarded statutory penalties.