A possible shift in the WARN winds? What employers need to know after Dargon

For a deeper discussion on WARN Act compliance, workforce reductions, and emerging employment law risks, join our upcoming webinar, RIFs, WARN, and AI: Key Considerations for Employers.

A federal district court has held that, under the federal Worker Adjustment and Retraining Notification (WARN) Act, fully remote employees do not count as a primary mechanism for establishing a “single site of employment.” None of the federal circuit courts, however, which sit above the district-court level, has squarely resolved the issue in the post-COVID-19 pandemic era. Recently, in Dargon v. Xtend Healthcare, LLC (M.D. Tenn. Mar. 31, 2026), a Tennessee federal district court held that Subpart 6, the key regulatory provision addressing workers without a fixed workplace, does not apply to permanently remote, nonmobile workers and dismissed the federal WARN Act claim relating to remote employees.

With a growing split among lower courts and potential legislative reform on the horizon, employers with partially or fully remote-first workforces should heed Dargon but should not treat it as the final word. WARN Act exposure for remote-heavy reductions may still vary significantly by jurisdiction.

Background: WARN Act thresholds and the “single site” requirement

The WARN Act requires covered employers to provide 60 days’ advance written notice of certain plant closings and mass layoffs to help communities prepare for large economic shifts. Whether notice is required depends, in part, on whether a sufficient number of employees are terminated at a “single site of employment.”

While the WARN Act sets out numerical thresholds (generally, 50 or more affected employees at a single site), it does not define “single site of employment.” Congress instead delegated interpretive authority to the US Department of Labor (DOL).

Among the DOL’s provisions, Subpart 6 of the WARN Act is particularly relevant for remote-work[MJ1.1] arrangements. For workers “whose primary duties require travel from point to point” or who work outside an employer’s regular worksites, the “single site of employment” is their home base, assignment source, or reporting location.

Historically, courts applied this provision primarily to mobile workers, such as truck drivers or traveling salespersons. However, the widespread shift to remote work in 2020 strained this framework, raising a key question: Do employees who work entirely from home and who do not travel in the course of their employment fall within the reach of the WARN Act?

The Dargon decision: WARN Act applicability for a fully remote workforce

In Dargon, the employer, Xtend Healthcare, had operated a virtual call center staffed by employees working entirely remotely across multiple states, managed from Xtend’s Tennessee headquarters. Following workforce reductions in early 2022, a former supervisor brought a putative class action alleging violations of the WARN Act and New Jersey’s mini-WARN Act.

• The key issue: At issue was whether fully remote, nonmobile employees can rely on Subpart 6 to establish a “single site of employment” by tying themselves to Xtend’s central office in Tennessee.
• The court’s holding: The district court adopted the Fourth Circuit reasoning that Subpart 6 applies only to “truly mobile workers” whose duties involve travel, not to employees who simply work from home. Relying on Fourth Circuit precedent and DOL commentary, the district court emphasized that the WARN Act’s single-site analysis remains grounded in geographic concepts, even if applied flexibly. Because the plaintiff did not work at a physical site shared with other employees and thus could not rely on Subpart 6, the district court concluded he failed to plausibly allege a qualifying “single site of employment.” The WARN Act claim was dismissed with prejudice.

Dargon adds to an increasingly divided body of post-pandemic case law addressing WARN Act coverage for remote workers. To date, no federal circuit court has directly addressed whether Subpart 6 applies to fully remote, nonmobile workers. In the absence of binding appellate guidance, lower courts have divided into two general camps.

Narrow approach: WARN Act excludes remote workers

Several courts have adopted a narrow interpretation of Subpart 6, holding that it applies only to employees whose duties require them to travel. Decisions spanning nearly two decades – including Meson v. GATX Tech. Sers. Corp., Piron v. Gen. Dynamics Info. Tech., Inc., Hubbard v. Goldschmitt & Associates, LLC, and Dargon – have applied this reasoning. Under this approach, remote employees are often treated as having a “single site” at their home, making it difficult to meet WARN Act thresholds.

Broader approach: WARN Act includes remote workers

By contrast, some courts have adopted a broader interpretation of Section 6, concluding that remote employees may be assigned to a centralized office or operational hub when the facts demonstrate a sufficient connection. Cases such as Hoover v. Drivetrain, LLC, In re Sunnova Energy Int’l Inc., and Smith v. Zulily, LLC illustrate this approach. Additionally, some courts have characterized the issue as fact-intensive, declining to resolve it at the early stages of litigation and allowing claims to proceed where a connection to a physical site is plausibly alleged.

Legislative developments to watch: HR 5761

Pending federal legislation, HR 5761, may directly address many of the uncertainties highlighted by Dargon and similar cases by clarifying how the WARN Act applies to modern, distributed workforces. In particular, the bill is aimed at resolving ambiguity around how remote employees are counted and how to define a “single site of employment” when workers are not physically co-located.

If enacted, HR 5761 would move much of the remote-work analysis from competing interpretations of DOL regulations, including Subpart 6, into the statutory text itself. That could materially change WARN Act obligations for employers with distributed workforces, particularly where remote employees are managed through, trained by, or operationally connected to a centralized office or hub.

Although the precise contours of HR 5761 continue to evolve and there is no guarantee it will be enacted in its current form – if at all – the proposed legislation reflects a broader recognition that the WARN Act’s existing framework does not map cleanly onto today’s remote and hybrid employment models. Employers should monitor developments closely, as legislative action could quickly reshape employers’ WARN Act obligations for distributed workforces.

What’s next?

Dargon is a district court decision that is not binding outside its jurisdiction. Nonetheless, it underscores the legal growing pains associated with the post-pandemic transition to remote work.

With courts divided and no appellate resolution yet, the WARN Act’s treatment of fully remote employees remains unsettled. Until clearer guidance emerges, whether from courts or Congress, employers should approach reductions in remote workforces with careful, fact-specific analysis.

Our team has experience advising employers on WARN Act compliance, including complex reductions-in-force involving remote, hybrid, and multistate workforces. Employers with questions about planned workforce reductions or WARN Act obligations for remote employees should contact the authors or their regular McDermott Will & Schulte lawyer for guidance.

Emily Julve, an associate in the New York office, contributed to this client alert.