Sixth Circuit concludes that the FDA's seizure of products at a Michigan pharmaceutical manufacturer did not relieve the manufacturer of its WARN-Act notification obligations when the manufacturer conducted a mass layoff

In Calloway v Caraco, No. 14-2526, WL 5023560 (CA6, 2015) the Sixth Circuit Court of Appeals affirmed the results of a bench trial where the district court judge found that a Michigan pharmaceutical manufacturer violated the Worker Adjustment and Retraining Notification Act's (the WARN Act's) notification provision, 29 U.S.C. § 2102, which required the company to afford its employees at least 60-days notice prior to a mass layoff. The class of employees in Caraco was certified by the district court, and the layoffs followed the U.S. Food and Drug Administration's (FDA's) seizure of various products from the company. The Sixth Circuit reviewed whether the "unforeseeable business circumstances" exception applied to the FDA's seizure; the application of the exception in the case would have relieved the company of its notification failure. When reviewing the trial results below, the Sixth Circuit stressed the fact-sensitive nature of the issue before the Court, and after reviewing facts including the various warnings the company received from the FDA in the past, the Sixth Circuit concluded that the exception did not apply and affirmed the judgment of the district court.

EMPLOYMENT LAW