The WARN Act
During these challenging economic times, it's important to remember the exposures to liability for Employment Practices that an employer can inadvertently escalate under the pressures of the day. If it is essential to reduce your workforce, be aware of and abide by regulations that apply to that difficult decision. The Worker Adjustment and Retraining Notification Act (WARN) became effective on February 4, 1989.

WARN offers protection to workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union); to the State dislocated worker unit; and to the appropriate unit of local government. In general, employers are covered by WARN if they have 100 or more employees, not counting employees who have worked less than 6 months in the last 12 months and not counting employees who work an average of less than 20 hours a week. Private, for-profit employers and private, nonprofit employers are covered, as are public and quasi-public entities which operate in a commercial context and are separately organized from the regular government. Employees entitled to notice under WARN include hourly and salaried workers, as well as managerial and supervisory employees.

What Triggers Notice

• Plant Closing: A covered employer must give notice if an employment site will be shut down, and the shutdown will result in an employment loss for 50 or more employees during any 30-day period.
• Mass Layoff: A covered employer must give notice if there is to be a mass layoff which will result in an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer's active workforce.

Notification Period
With three exceptions, notice must be timed to reach the required parties at least 60 days before a closing or layoff. All notices must be in writing. Any reasonable method of delivery designed to ensure receipt 60 days before a closing or layoff is acceptable. The exceptions to 60-day notice are:

• Faltering company - This exception covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings;
  
• Unforeseeable business circumstances - This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required; and
  
• Natural disaster - This applies where a closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.
  

Penalties
An employer who violates the WARN provisions by ordering a plant closing or mass layoff without providing appropriate notice is liable to each aggrieved employee for an amount including back pay and benefits for the period of violation, up to 60 days. An employer who fails to provide notice as required to a unit of local government is subject to a civil penalty not to exceed $500 for each day of violation. Enforcement of WARN requirements is through the United States district courts. Workers, representatives of employees and units of local government may bring individual or class action suits. In any suit, the court may allow the prevailing party a reasonable attorney's fee as part of the costs.

Information
Specific requirements of the Worker Adjustment and Retraining Notification Act may be found in the Act itself, Public Law 100-379 (29 U.S.C. 210l, et seq.) The Department of Labor published final regulations on April 20, 1989 in the Federal Register (Vol. 54, No. 75). The regulations appear at 20 CFR Part 639.

General questions on the regulations may be addressed to:
U.S. Department of Labor
Employment and Training Administration
Office of Work-Based Learning
(202) 219-5577

Environmental Risk: What Is It? Who Has It?
There is a general confusion about the risks of environmental contamination and equal confusion about insurance products available to fill the gaps in general liability, automobile, property, and other commercial insurance products left by the pollution exclusions they all contain. Without proper environmental insurance, businesses are not protected from the financial uncertainty involved in clean-up, disposal of contaminants, loss of property value from the discovery of unknown contaminants, claims by third parties for bodily injury and property damage, and other obligations such as future monitoring imposed by law.

Environmental risk can come from torts, contractual obligations, or a host of statutes which can impose the cost of recovery provisions for clean-up and natural resource damages regardless of fault. The cost of remediation is expensive.

Many environmental risk exposures are difficult to identify because they arise from activities that were conducted many years in the past, or may be created by extremely small quantities of hazardous substances that are difficult to detect or measure. Physical inspections of facilities may not reveal causes of environmental risk that may be underground. When property changes hands, knowledge of prior contamination may be lost. The link between exposure to a substance and measurable injury is often difficult to determine due to long latency periods of some injuries or diseases associated with toxic substances. Environmental damage claims can increase exponentially over time as contamination migrates farther from its source. Businesses may have to defend against perceived exposure and fear of future manifestation of an injury.

Regulations include the Clean Water Act, Clean Air Act, Motor Carrier Act, Toxic Substance Control Act, Resource Conservation and Recovery Act, Oil Pollution Act, and the Comprehensive Environmental Response, Compensation, and Liability Act - also known as "Superfund". Superfund liability is strict, retroactive, harsh, and expensive. Responsible parties are accountable for costs associated with cleaning up a site even if they had no involvement with the original waste disposal activities. The long arm of the law can reach to owners, operators, lessees, contractors, transporters, directors and officers, shareholders, lenders, parent corporations, and successors as the government pierces the corporate veil in cost recovery. Fines for noncompliance can be staggering, with most laws having penalty provisions of up to $25,000 per day with treble damages for subsequent violations. The EPA has investigated over 40,000 potential Superfund sites in the U.S. with an average clean-up cost of $30 million per site.

Environmental insurance is vastly underutilized as a risk management tool. It is estimated that less than ten percent of environmental remediation losses are insured. Annual costs in the U.S. far exceed $100 Billion, and this does not include any costs for bodily injury or legal expenses. Considering the breadth of coverage available at a relatively low premium it is difficult to explain why there is not widespread acceptance of environmental insurance within the standard risk management strategy of most businesses. One reason might be the complexity of the issue.

Many businesses, unless they engage in operations that utilize hazardous materials or processes, do not consider themselves vulnerable to environmental risk. These unsuspecting business owners could find themselves incurring substantial costs from allegations of interference from loud noises, noxious odors, electromagnetic fields, blowing dust, temperature change from run-off, or particulate from a smoke stack, all pollution claims which may emanate from facilities which have no hazardous substance or activity whatsoever. Because most insurance policies contain an "Absolute" or "Total" pollution exclusion, it is best to address environmental loss exposures with specialized environmental insurance that incorporates a broad coverage grant designed to respond to these exposures.

Pandemic Preparedness
As H1N1 flu cases in Europe and areas outside North America mounted, the World Health Organization (WHO) raised the global threat level to 6, proclaiming the world's first flu pandemic in 41 years. Although many health officials say that the further spread of the virus is inevitable, it's not at all clear how much threat it poses. While we've seemed to dodge a bullet, the threat remains very real. Now is the time to be vigilant, to prepare for the very real possibility that a stronger strain will reemerge in a few months. Even if it doesn't, there will be something, sometime, for which your efforts to be prepared now will pay off later.

Businesses will need the following:

• A crisis management plan that includes tailored elements for pandemic, including policies for business travel, locating staff, social-distancing, medical screening, and an extensive awareness and communications plan and process.
  
• An alternative workforce or work-at-home policy and plan in the event that a large portion of the workforce is or may be impacted by pandemic.
  
• A strategy for taking special precautions to assess the health of the workforce and potentially turn back infected workers who report for work.
  
• A process for dealing with emotional impacts of such events as death on the individual's family members and on the workforce in general.
  
• A process for orderly shut down or reduced service delivery based on reductions of customer demand, labor force, raw material supply, or energy resources.
  
• Continuity procedures for core functions that must be kept running.
  
• A process for working collaboratively with suppliers to maintain critical flows of supplies, business services, and products.
  

Evaluate your firm's risk management controls, human resource, and other pandemic policies, as well as update crisis management plans and crisis communications capabilities based on the threat of a pandemic.

Additionally, there are preventive and preparatory actions that can and should be taken now, including:

• Prioritize business activities.
  
• Review and understand any potential impacts to your supply chains.
  
• Review company travel, hygiene, medical screening, anti-viral medications, and health care support policies.
  
• Provide anti-bacterial sanitizer and other materials.
  Identify possible social-distancing and other means to minimize exposure and spread of illness within the work place.
  
• Review methods for providing ongoing information about both the pandemic threat and the status of the business to employees at work and at home.
  
• Make sure the plans allow for staff to work at home where possible and appropriate.
  
• Consider any vital processes that must be maintained at a central location in a pandemic, such as call centers, health services, and services vital to the vulnerable.
  
• Review the structure necessary to manage the crisis effectively. This includes how to implement multiple business continuity plans, cope with significant increases in the number of employees working from home and substantial changes to the marketplace and the supply chain.
  

Make sure crisis management and business continuity management plans include pandemic scenarios and exercise the plans where possible.