Clarksville Battery Factory Facing Lawsuit Over WARN Act Violations in Mass Layoffs

The future of a Clarksville, Tennessee battery factory is uncertain as a class-action lawsuit alleges the company violated federal law by laying off workers without proper warning. The lawsuit focuses on the WARN Act, a regulation designed to protect employees during plant closures or mass layoffs.

Microvast Accused of Wrongful Termination and WARN Act Violations

Montgomery County resident Deidra Milan had been working at the Microvast plant in Clarksville for more than six months, before she, along with dozens of other employees, was “terminated without cause” in April “as part of a mass layoff without notice.”

She argues that she, and the other fired employees, should have received the full protection afforded by the WARN Act, which ensures 60 days’ notice of termination. 

“Dozens of workers relocated to Clarksville specifically to work for Microvast, only to be terminated as part of this mass layoff. The Clarksville community will bear the brunt of Defendants’ transgressions,” the lawsuit alleges. 

What is the WARN Act?

The Worker Adjustment and Retraining Notification Act (WARN) protects employees by requiring employers with 100 or more full-time workers to provide advanced notice of mass layoffs or plant closures. This 60-day window allows employees time to prepare for job loss by seeking new employment or retraining opportunities.

Microvast's Clarksville Plans in Doubt

Microvast was founded in Stafford, Texas in 2006 as a research and technology driven company, Microvast Holdings, Inc. It has grown into a leader in the design, development and manufacture of batteries for mobile and stationary applications, and offers a variety of fast-charging lithium-ion batteries.

In February 2021, Microvast announced it would set up its first American factory in Clarksville, Tennessee, bringing almost 300 jobs in a growing technology market, the lawsuit explains. Three years after announcing the factory, the layoffs took place at the facility “as part of ‘reduction in force’,” the lawsuit states.  

Up until April 19, the plant was running business as usual and employees had no indication that the company intended to reduce the workforce, Milan argues. When they were laid off, they were told the move was immediate, and Milan argues in the lawsuit “no circumstances existed that would have permitted [Microvast] from reducing the notification period” from what is provided by law.

Job Market Shakeup: Layoffs Ripple Across Industries

Beyond the recent layoffs at Microvast, the EV battery industry is experiencing a downturn. Elektrek reports it's been a rough few months for battery companies, with hundreds of workers in the United States and Europe losing their jobs. Companies are looking to cut costs as sales slow or early-stage companies struggle to grow.

Michigan-based EV battery startup ONE cut its workforce by 25 percent at the end of last year. South Korea's LG Energy Solution laid off 170 workers around the same time at its Michigan plant. SK On, which supplies Ford, also let go of more than 100 workers at its plant in Georgia.

Even beyond the EV battery sector, the job market is facing headwinds across various industries, with companies resorting to workforce reductions. The restaurant industry is a prime example. Red Lobster faces a class action lawsuit for allegedly violating the WARN Act by laying off workers without proper notice.

Similar to Microvast employees, Donna Lowe, a former Red Lobster employee, claims she and others were blindsided by termination. They allege they weren't given the legally mandated 60 days' notice, causing significant hardship

What To Do If Your Employer Violates The Warn Act?

Before taking any action, it is important to understand the Act’s requirements first and foremost. The Act only applies to employers with 100 or more full-time employees, and it requires 50 or more employees to be affected by the mass layoffs or a plant closure. 

If you still believe your workplace violated the Act, here are some steps you can take:

1. Gather Documentation: Collect evidence of the layoff, including communications and dates.
   
   
2. Seek Support: Talk to other affected employees and consider contacting your union representative (if applicable).
   
   
3. Understand Exceptions: Be aware of exceptions to the WARN Act, such as unforeseen circumstances.
   
   
4. Contact Authorities: File a complaint with the Department of Labor.
   
   
5. Consider Legal Action: Consult with an employment lawyer to discuss your options.

Milan wants to represent other former Microvast employees affected by the mass layoffs. She’s seeking lost pay, civil penalties, attorneys fees, and more.

Case Details

• Lawsuit: Milan v Microvast, Inc. et al
• Case Number: 3:24-cv-00627
• Court: U.S. District Court for the Middle District of Tennessee, Nashville Division

Plaintiffs' Attorneys

• J. Gerard Stranch, IV and Michael C. Iadevaia (Stranch, Jennings, & Garvey, PLLC)