Mental Health Facility that Closes May Have to Give Employees 60-Days Notice

Michigan AFSCME Council 25 v. Aurora Healthcare, Inc., 256 F. Supp. 2d 713 (E.D. Mich. 2003); 12(19) BNA's Health Law Reporter 737 (May 8, 2003)

The federal Worker Adjustment  and Retraining Notification Act (WARN) has been applied to the rapid closure of a mental health care facility near Detroit.  WARN requires that workers be given 60 days notice of a mass layoff unless closure followed "unforeseeable circumstances,"  which includes the "unexpected termination of a major contract." The facility provided inpatient, outpatient, and partial hospitalization care for individuals with mental illnesses.  The majority of its patient load came from referrals from the Community Mental Health Agency of the county in which it was located. On Dec. 19, 2001, the agency announced it would no longer refer patients to the facility, it would not renew its contract with the facility effective Dec. 31, 2001, and the facility should make  arrangements to transfer all of its referral patients to other medical providers by Jan. 31, 2002.  Faced with the loss of this business, virtually the entire facility workforce, which consisted of several hundred employees, was laid off. Layoffs began in late December 2001....

Found in DMHL Volume 23 Issue 1