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Salesforce didn’t warn Indiana about layoffs, but state has little recourse

INDIANAPOLIS (WISH) — When downtown Indianapolis software company Salesforce notified its employees of layoffs in January, the state should have been notified, too.

The U.S. Department of Labor requires companies that employ more than 100 people to notify the Indiana Department of Workforce Development of any layoffs with a Worker Adjustment and Retraining Notification, known as a WARN.

As of Thursday, the company had not issued such a notice to Indiana officials.

I-Team 8 asked the U.S. Department of Labor if there are consequences for not doing so. WARN is enforced through the U.S. district courts. Workers, their representatives, and units of local government may bring individual or class-action lawsuits against employers who are believed to be in violation.

I-Team 8 asked the Indiana Department of Workforce Development if it has heard from Salesforce, and, as of Thursday, it had not, the Indiana Department of Labor says. 

Some states have stricter laws that lower the threshold for issuing WARNs and can impose penalties on employers if the notices are not filed in accordance to state laws. Indiana is not one of those states, the Department of Workforce Development told I-Team 8 in a statement. 

The Department of Workforce Development does not enforce local penalties for the WARN Act. There are many exceptions to filing WARNs, and those can only be determined federally. 

Salesforce’s staff reduction raised questions about the future of the Salesforce Tower on the northeast corner of Monument Circle. It’s Indiana’s tallest building, opened in 1990 with 48 stories. Salesforce moved in during the last 2010s.

The Salesforce chief executive officer expects to pay out from $450 million to $650 million to get out of leases and other real estate, but the company has not said if Indianapolis is one of the areas it plans to exit.

I-Team 8 is told the company added space in 2020 during the COVID-19 pandemic and has not made any plans public to exit the building.

Doug McCoy, an IU finance professor and the director of the IU Center for Real Estate Studies, told I-Team 8, “Like any company, right, they want to manage their overhead well. The biggest thing on their expense sheet is people; next is their office space.”

“They probably got a great deal because they took so much of the building. And you know, people would love to have them, right? They are a good tenant. They are a credit tenant, you know, and if they’re going to take a lot of your space, you know, the more you take and the longer you are willing to commit to it for, you know, you can get a good deal. I would see the signage for large tenant like that more as a perk.” 

Salesforce filed a WARN in California; however, that notification didn’t cover Indiana.