WARN Act: What is it and how does it apply to Texas workers?

AUSTIN, Texas - When you hear of mass layoffs in Texas, you might also hear about something called the WARN Act.

The Worker Adjustment and Retraining Notification (WARN) Act is a federal law that requires businesses, under certain circumstances, to provide notice 60 days in advance of plant closures or mass layoffs, says the Texas Workforce Commission.

That advance notice is commonly called a WARN notice.

Central Texas WARN notices

By the numbers:

In Central Texas, so far in 2025, four businesses have issued WARN notices, two in Travis County and two in Bexar County, as of Feb. 18, according to the most recent data available from the Texas Workforce Commission. Those notices total about 154 people losing their jobs.

The majority of those losses comes from a notice issued by ICON Technology Inc, the company building 3D-printed homes in places like Georgetown and East Austin. According to filings with the TWC, ICON filed a WARN notice on Jan. 7, saying they plan to lay off 114 workers on March 8. 

In a statement to FOX 7 Austin, an ICON spokesperson says that the layoffs are to "re-align our team and team size to focus on our highest priorities."

In 2024, over 60 WARN notices were issued, impacting just over 6,500 people.

The most significant loss of work happened when the Tesla Gigafactory in Del Valle filed a notice saying it was laying off almost 2,700 people, or just over 40 percent of all the jobs lost in Central Texas in 2024, according to TWC WARN notice data.

The notice was filed with TWC on April 19, 2024, but was marked as "received" on April 23. However, employees who worked at the factory told FOX 7 Austin that they were fired by overnight email on April 15, four days before the notice was filed.

Scott Schneider, employment attorney and adjunct professor with the University of Texas at Austin Law School, spoke with FOX 7 Austin about what the WARN Act is and how it applies to Texas workers.

What is the WARN Act?

Big picture view:

Scott Schneider: "Yeah. So the WARN Act, if my recollection is correct, was signed, was passed in the late 1980s, I think was during the Reagan administration. Which makes me feel very old. Well, tell you that right now. And it was in response to that." 

"Let's talk about the history a little bit. It was in response to a number of factories shutting down as we industrialized in the country. You know, you think of like steel plants, auto plants, places that were hit, I think, particularly hard, like Pittsburgh and Detroit. And the idea behind the WARN Act was, you know, you give people that are impacted by a layoff sufficient time so that they can plan whether it's to facilitate some sort of training with a local kind of workforce office or to just give them time to start looking for something else. But yeah, what you were seeing were this kind of…as we de-industrialized, just these mass layoffs in communities." 

"And again, I mean the sort of I don't think this is super nuanced but the idea was well, when we're impacting that many people, we want to give them as much notice as possible so that they can get their affairs in order. And the stick was there was never a department that was tasked to sort of enforce the WARN Act. So the stick was that if you didn't do that, you could be sued. You didn't provide sufficient notice. You could be sued or, I think, fined by a local governmental official. But I mean, that's the history there. And it's really, like I said, moored in sort of the very quick deindustrialization that took place in the mid 1980s to late 1980s."

What is a WARN Notice?

Big picture view:

Scott Schneider: "Okay. So typically what I've seen is and when I've administered WARN notices, there's three things. First, there needs to be notice to the affected employees. Specifically, what is the timeline for, let's say, a plant closure? When will you be impacted? How long do we anticipate being able to keep you employed? Are there alternative places where if you want to transfer to another community, what positions do we have open? So that's one." 

"There's another that's supposed to go to, in essence, the sort of dislocated worker unit, like an unemployment office and all that sort of stuff. The idea is we want to put those entities on notice that a number of people are impacted by this. And, you know, to the extent that you can prepare and plan now to help them look for other positions or, you know, facilitate some sort of training. Provide them with benefits, streamline the benefits process. We're giving you a heads-up that a number of people who have been impacted by this are going to be seeking some sort of state-related assistance. "

"And then I don't remember all the governmental officials, I can look it up, but there are also the local governmental officials who are supposed to get the notice of the potential plant closing or the fairly significant reduction in force. And so that's the federal law."

"Now, there are different states that have their own mini-WARN acts. Texas, maybe not surprisingly, is not one of them. But like in a place like California, I can't remember all the bells and whistles there, but there's some for a place like California and some other states as well."

How does enforcement work in Texas?

Big picture view:

Scott Schneider: "Well, the enforcement is not necessarily left to the states. Well, it's two parts. Number one, the state can fine. So in theory, if you didn't provide sufficient WARN notice like 60 days notice, I think a fine can be issued per day that you didn't provide. And I think it's $500 per day civil penalty. That's not where the real meat-and-potatoes enforcement comes from." 

"The real significant enforcement comes from private right of action and a lawsuit can be brought on behalf of impacted workers to basically secure back pay and benefits for a 60-day period. I'm thinking recently of cases that we've had this sort of issue come up in like Twitter. When Twitter laid off people in 2022, there were basically lawsuits filed saying, "hey, this was a WARN triggering event. You failed to provide 60 days notice. We're suing you." And I don't know that it ever went to a full-blown judgment, but there was a settlement. So the primary enforcement vehicle is private litigation for failure to comply, failure to provide 60 days of notice."

Who is eligible for protections under the WARN Act?

Why you should care:

Scott Schneider: "Yeah, well, that's any employee that has been affected by a triggering event who works for a covered employer. So let me just back up. I mean, who's a covered employer under the WARN Act? I mean, that applies to both private for-profit and nonprofit organizations, but not to governmental employees." 

"So there's been a lot of discussion, like, I know I did an interview about this offer for severance for federal government employees. Well, there's no warning for them. And the WARN Act doesn't apply to all employers. It applies to only businesses that have 100 or more full-time employees. And so, if you work for one of those covered employers, a business with more than 100 more employees and there's a triggering event, which is a couple of things."

"One, we're basically shutting down a single site, and that impacts 50 or more employees within a 30-day period. Anybody who will be affected, who loses their job is a covered employee under WARN. The other one is a mass layoff, which is a kind of a term of art in WARN, which impacts 500 or more employees or between 50 and 499 employees at a single site of employment. And so long as that takes place within a 30-day period and that represents about 33% of the workforce. So if I'm one of the employees in one of those situations and I'm about to be laid off, then I get the protections of the WARN Act. And again, really the only protection is you're given a 60-day notice. And if you [the business] fail to do that, I can join a class, file a lawsuit, complain to my local government, etc."

What do workers need to do if they're informed of a potential layoff or a WARN notice?

What you can do:

Scott Schneider: "Yeah, I mean, look, that's if you get a WARN notice. More likely than not, what it means is you're probably going to lose your job. There have definitely been times when WARN notices have gone out and either a business has gotten additional funding or a grant has come through. And we tell the employees, hey, you know, no need to worry anymore, we're revoking the notice. But, you know, I hate to be this blunt about it, but if you get a WARN notice, it's number one, prepare to be laid off."

"The idea was 60 days was supposed to provide you with time to get training to go into another field. I think most people questioned at the time, and I think it's fair to criticize the law and act on the grounds that that's a completely unreasonable expectation. But, you know, maybe it's a matter of looking for training to find another niche. Maybe it's about planning to go to a job market that's a little more vibrant, but it's basically 60 days to sort of figure out what we are going to do when my job is gone or sometimes, like sometimes, people do WARN notices that are longer than that."

"But the idea is it's a two-month transition period to find something else and or to start putting your application together for unemployment insurance, all that sort of stuff. Now, look, if you don't get sufficient notice, what you'll probably get is an email from a plaintiff's attorney saying, "Hey, we want to represent you in a class action lawsuit", which is what happened, I believe, at Twitter when the WARN Act wasn't complied with there. So, yeah, I mean, it's definitely not a happy…this is not a nice thing to get. It's not a happy thing. But the idea is we'll give you 60 days to figure out something else to do." 

"And I'll say this. Look at the time when the WARN Act was passed. That was the criticism, that 60 days is really an insufficient period of time for people who've worked their whole lives in steel mills or car factories or whatever the case may be, to find an entirely new trade. So it is inadequate. But yeah, that's what happens next."

Why is something like the WARN Act so important?

Dig deeper:

Scott Schneider: "Yeah, I mean, for all of those reasons, I mean, the alternative prior to the WARN Act was if you went to work for, you know, ten, 15 years at a place, and then a day later, you were basically told "hey, too bad, so sad, we're shutting the facility down." And you didn't have any time whatsoever to kind of prepare. And, you know, you also had…there were really tragic stories about people who, a week before, were just buying a house and didn't know that the plant was about to shutter and move maybe to another country or just close entirely. So why it's important is it gives some period where people can basically get their economic, their personal, their work life in order. To the extent 60 days is adequate? 60 days is better than one or two days of notice or no days of notice. So that's why it's important."

"But I think, look, even at the time, it was pretty clear. I mean, critics of the bill said it just didn't go, it didn't go far enough, that 60 days was insufficient. And…one of the interesting things we're going to talk about in my class is we're now moving to this very disruptive technology around artificial intelligence, which is on this exponential slope and the potential for A.I. to cause the sort of mass layoffs like what you saw in the 80s in blue-collar work on the white-collar side."

"I wouldn't rule it out. I'm not an economist or anything like that, but I went and started at my own firm in part because I was like, "wow, A.I. can do so much that we were paying other people to do. And it's a lot of overhead and all that sort of stuff." So the point I'm making is there's a chance that now it doesn't just impact, widespread job dislocation doesn't just impact blue collar jobs, it impacts white collar jobs. And I wonder if there will be some revisiting of whether or not 60 days is sufficient." 

"There is an interesting quote. And I don't get on Twitter all that much anymore, but Sam Altman, the founder of OpenAI, said we need to rethink the social contract at this point and because how disruptive artificial intelligence will be. And so this would be one way, in a meaningful way, rethinking the social contract, as A.I. kind of changes white collar work. Are we going to give people sufficient time to transition to other things? Well, changing the WARN Act would be the way to do that. Now, I say that…at this point I don't see any appetite to do that. But as you play it out, that makes a lot of sense."

Elizabeth Evans: "That's interesting. I hadn't even considered that. Because as you said, this was initially put in place for blue-collar workers, for plant workers. And even the language when I was reading what the Texas Workforce Commission has for it, a lot of it is still kind of geared towards plant work. So it's very interesting that you bring up A.I. and how that can work in tandem with this."

Schneider: "Well, I see this, and I do a lot of work…my primary work is with higher-ed institutions, but I also do a lot of work with tech companies and they're in the midst of layoffs. And I think a lot of that, you know, every situation is somewhat unique, but one overriding macroeconomic factor is "I can get a robot to do it or I can get ChatGPT to do the work that was being done". So I don't rule that out. I think long term, that's where you'll see a lot of job displacement is in white-collar fields that are impacted by artificial intelligence."

Evans: "So I guess that's something we definitely need to keep an eye on in general. So is there anything else that you want to share that you feel like Texas workers need to know about the WARN Act or notices in general?"

Schneider: "No, I think that, on the whole, I mean, we've been blessed that Texas has a really vibrant economy…there are some states where they've had…I know many clients have had to trigger WARN obligations. The other caveat I give is, and this is sort of an imperfection about the WARN Act, is that there are workarounds. There are ways to not even have to provide the 60-day notice. If you can say, "hey, it was an unforeseeable business circumstance". Like, I had some clients, I'll just be blunt, when it looked like the federal government was going to pause its grants, they were asking me questions about WARN Act compliance because "we're going to have to lay off a lot of people". 

"And again, well, thankfully, within the WARN Act, there's an exception for unforeseen business circumstances, which I think this counts. Nobody could have ever seen this coming…COVID was another exception. And so you see some companies, I think, take pretty aggressive positions in that regard and maybe don't comply with the spirit of [the WARN Act]. But yeah, I mean, in Texas, for the most part, I think up till now, we've been blessed that there haven't been a ton of companies where there have been massive layoffs. I think that's starting to change, especially in the tech sector. And so, yeah, having a basic understanding of what your WARN entitlement is, and it's 60 days notice, I think would be super important for an employee to know about."

What you can do:

For more information on the WARN Act and to see recent filings with the TWC, click here.

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