Last week, AOL laid off hundreds of full-time employees in its New York and Bangalore offices, but that may be only a small fraction of the true number of people who will lose their jobs as a result of the Huffington Post merger. AOL’s CEO Tim Armstrong wrote in a memo that most freelance writers and editors will be let go. “Going forward, AOL will invest more heavily in our in-house editorial team and transition away from a reliance on freelance journalists,” he wrote in a memo.
And depending on how many freelancers — also known as contributors or contractors — are also cut, it may mean that the company is in violation of the New York State Workers Adjustment Retraining and Notification Act, or WARN Act. Under WARN, companies that lay off either 33 percent of their workers or 250 workers must give them at least 90 days notice. Employees terminated last week reportedly received four weeks of severance plus an additional week for each year spent with the company.
AOL says it doesn’t need to abide by WARN because it “does not apply to contract employees in this situation.” But employment law specialists disagree.“The WARN Act doesn’t say anything bright-line about contract employees,” said Jack Raisner, co-head of the WARN Act practice at Outten & Golden LLP. “Unless they’re seasonal-type or project-based employees, I don’t think there’s anything different about a contract employee from any other payroll-type employee.”
“It would depend on whether they are legitimate freelancers or if they’re labeled freelancers but are in fact employees,” said Catherine Ruckelshaus, legal co-director of the National Employment Law Project. “That happens a lot. It’s really a function of whether the person is doing work that’s integral or integrated into the business and to what extent the business has the right to control the conditions and terms of their jobs.”
Then again, the 200 or so employees let go last week were all required to sign severance agreements waiving away their rights to additional compensation, so that may prevent those employees from pursuing a claim.