Jorge Espinosa, one of 62 employees laid off from the Coral Gables office of Commonground/MGS, has filed suit against the agency claiming employees were not given 60 days’ notice which they claim is required by the Worker Adjustment and Retraining Notification Act. On Saturday, December 5, Commonground suddenly shuttered its Coral Gables, New York and Chicago offices and told employees they'd have to clean out their desks by Monday.
Company management said a dispute with one of the firm's lenders, Fifth Third Bank, was cause for the agency's closure. In an email to employees, management wrote: “It is therefore with deep regret and heavy heart that we have to inform you that without access to funds, we are no longer able to operate our business. Your employment will therefore terminate effective today, December 5, 2015. While the Worker Adjustment and Retraining Act of 1988 may require advance notice of your permanent layoff, the unforeseeable circumstances of the lender’s actions and our faltering business circumstances that necessitated our good faith efforts to actively secure capital to prevent closing the Agency, did not afford us an opportunity to provide such advance notice.”
A section of the above referred to Worker Adjustment and Retraining Act which covers exceptions to the required 60 notification period gives three specific exceptions to 60-day notice period:
(1) Faltering company. This exception, to be narrowly construed, 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;
(2) 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
(3) 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.
Exception number 2 seems to cover Commonground here as agency management claims the layoffs were, indeed, the result of unforeseeable circumstances. Now we all know agency management can say whatever they want in these situations, but until an alternative truth presents itself, it would seem the agency was well within its rights to terminate without notice.
If, in fact, the scuffle with Fifth Third resulted in Commonground simply running out of money to sustain the business then it would seem there was simply no money to make payroll, let alone make it for an additional 60 days for all employees. The phrase "blood from a stone" comes to mind.
Whether or not Commonground management could have had contingency plans in place for this particular scenario or perhaps addressed the situation before it became as dire as it did is, of course, a question. But at least for now, one for which no answer is being given.