6th Circuit: No jury trials in WARN Act cases

Laid-off workers suing their employers under the federal Worker Adjustment and Retraining Notification Act of 1988 (WARN Act), 29 U.S.C. §§ 2101-2109, can’t try their claims to a jury.

The Sixth Circuit is the first federal appellate court to rule on the issue. Several district courts had addressed the issue with mixed results.

The WARN Act opens an employer to damages in the form of back pay and benefits if the employer doesn’t give enough advance warning of large-scale layoffs or plant closing.

At first blush, this sounds like Seventh Amendment stuff — money damages in an action at law — for which there is an undeniable right to a jury trial.

But is it? One test to determine whether a remedy is legal (say hello to the jury) or equitable (say hello to the judge) is to compare the statute to 18th-century actions brought in English courts before the merger of law and equity.

Judge Ralph B. Guy analyzed it this way:

It is undisputed that no action for failing to give advance notice of an employment loss was known to 18th-century England. …

[W]e do not see an analogy between the issue to be tried in an employee’s WARN Act claim and an action
for breach of contract — a recognized pre-merger action at law … .

Nor are the WARN Act claims analogous to a personal injury or tort action, which would be “a prototypical example of an action at law.” …

[A] better comparison might be to a breach of an employer’s fiduciary duty, which is an action recognized as equitable in nature. …

[The WARN Act] places the entire damage award — the liability for back pay and benefits — within the district court’s discretion.

It’s true that money is the usual remedy for a suit at law but money can also change hands as a form of equitable relief, such as restitution. The bottom line from the Sixth Circuit:

We are persuaded that the statutory remedies available to aggrieved employees provide equitable restitutionary relief for which there is no constitutional right to a jury trial.

The case is Bledsoe, et al. v. Emery Worldwide Airlines, et al.