What’s at stake?
Federal law – the WARN Act – requires employers to give employees 60 days notice before mass layoffs. Soul Housing gave their employees a heads up of about 12 hours in advance.
State labor officials are encouraging former Soul Housing employees to file wage claims with California’s Department of Industrial Relations for any lost wages.
State officials in charge of protecting workers’ rights said that a recent local mass layoff incident may have violated federal law, potentially resulting in future fines and legal trouble.
Some recently laid off workers could potentially be owed some money.
Soul Housing, an LA-based recuperative care facility operator, abruptly laid off employees at their facility on Blackstone Avenue in Fresno earlier this month. In a notice shared with employees, they said that the sudden nature of the layoffs was compliant with federal workers’ protections.
The Worker Adjustment and Retraining Act, commonly referred to by its acronym, WARN, is a federal law that requires employers give their employees sufficient advance notice before a mass layoff or facility closure. The WARN Act is a federal law, but some states like California also contribute their own rules for compliance, adding an additional layer of protection to the workers’ policy.
The law typically requires employers to give their employees at least 60 days’ advance notice before issuing layoffs.
Soul Housing gave their employees about 12 hours’ advance notice.
“Ceryx is providing this notice on a shortened timeline under the ‘unforeseeable business circumstances’ exception, because the events leading to this layoff were not reasonably foreseeable and occurred entirely outside of our control,” the layoff notice reads.
Ceryx provides staffing services to Soul Housing. The layoffs came following Soul Housing’s contract with their medical insurance provider ending, stopping them from getting reimbursed for their services.
However, spokespeople at two California employee protection departments told Fresnoland that, even if the company did qualify for an exemption, there is no record of them filing for one.
Both the California Employment Development Department, which commonly handles unemployment cases, and the Department of Industrial Relations, which helps enforce certain workers’ rights laws like the WARN Act, have told Fresnoland as of Wednesday morning that they have not received an application from Ceryx Management or Soul Housing requesting an exemption to the WARN Act.
And even if they wanted to file one, they’ve missed their window for compliance.
“An employer must ask for an exemption before the layoffs happen, since exemptions are meant to excuse the need for advance notice and cannot be filed afterward,” MariCarmen Estudillo, an information officer for the state’s industrial relations department, told Fresnoland over email.
Soul Housing and Ceryx Management did not respond to a request for comment.
It is unclear whether Soul Housing’s application would have qualified for an exemption for a 60-day notice.
Soul Housing laid off many workers from their recuperative care facilities earlier this month in Los Angeles and Fresno. Recuperative care facilities serve as temporary shelters for people who are homeless and have been recently discharged from a hospital.
The abrupt closure left many local leaders scrambling, as the facility’s patients were staring down the barrel of homelessness following the site closure. Local shelter operator RH Community Builders eventually took over the site, preventing residents from returning to the streets.
It is still not immediately known how many employees were laid off earlier this month. State officials can’t say without filed paperwork, and the layoff notice only notes that 90% of the workforce were let go — a number that bears little weight without knowing the total staff count.
RH Community Builders held a hiring event the day after the layoffs to try and absorb some of the recently laid-off staff. RH’s executive director Katie Wilbur told Fresnoland that over 200 people showed up to the event for an available 35 positions, but she could not confidently say that everybody that showed up was a former Soul Housing employee.
Estudillo told Fresnoland that ex-Soul Housing workers who are still owed wages are “encouraged” to file wage claims with the state’s Labor Commissioners’ Office. They added that the state department cannot confirm the violation until workers begin to file claims for missing wages and grievances.
A spokesperson for the Department of Industrial Relations told Fresnoland that employers who violate the WARN Act may be liable to pay financial compensation to each employee who lost their employment.
Fresno-based labor attorney Roger Bonakdar told Fresnoland on Wednesday that if laid off workers feel they have a claim, they should quickly seek legal counsel. He said that systemic issues place the burden on workers to file claims for violations like this.
“The reality is that the governmental entities that would oversee this are substantially overworked and don’t have the resources to pursue these things quick enough before assets disappear when companies close up shop overnight,” Bonakdar told Fresnoland.
Sudden closures like Soul Housing’s can be the first sign that a company may be on the road to bankruptcy, an issue that Bonakdar said should only raise the sense of urgency among workers who are contemplating filing claims against their former employer.
“When an employer closes an operation abruptly and significantly like this, an employee should take immediate action, because they should assume that the bank accounts are getting drained,” Bonkadar said. “If an employee doesn’t timely take action, they could lose out on any recovery at all when a business files bankruptcy. These types of liabilities can be discharged in bankruptcy, so it’d be difficult to collect.”
Michelle Hernandez, an expecting mother and a former worker for Soul Housing, told Fresnoland that she’ll consider filing with the Labor Commissioner’s Office. She said she still wants to wait to learn more about what her options are, but that she also has a right to what she owed following a layoff so close to her planned maternity leave.
“I just think it’s really unfair what they did,” Hernandez said.
Hernandez added that some laid off workers are still uncomfortable speaking to the media on the record for fear that it may affect future employment.
Baldwin Moy, directing attorney for California Rural Legal Assistance, represented many laid off workers after the closure of Madera Community Hospital. He said the WARN Act was made with people like Hernandez in mind, as it allows workers to properly plan ahead of a mass closure, increasing the likelihood that the loss of employment will not negatively affect their livelihood.
“If you’re a worker, you get a chance to say ‘Oh shoot, I better start budgeting for my rent. I better start looking for work,’” Moy said.
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