WARN Act - Home
2017.12 California Mini-WARN and Mass Layoffs. For federal WARN Act protections to attach, a mass layoff must exceed six months. Not in California! See Boilermakers Local 1998 v. Nassco Holdings, holding that 60 days advance notice is required under California's mini-WARN Act before an employer lays off 50 or more employees within a 30-day period.
2017.08.04 Likelihood of Mass Layoff as a Trigger Event. The Third Circuit ruled in Varela v. AE Liquidation, Inc. (In re AE Liquidation, Inc.), 2017 U.S. App. LEXIS 14359 (3d Cir. 2017), that WARN Act protections are triggered when a mass layoff becomes probable – “that is, when the objective facts reflect that the layoff was more likely than not.” The Third Circuit joined the Fifth, Sixth, Seventh, Eighth and Tenth Circuits, which have ruled likewise.
2016.07. Personal Liability for WARN Violation. In Stanziale v. MILK072011, a Delaware District Court recognized that "directors - or in the case of a limited liability company, its controlling owner, manager, and President - owe a fiduciary duty to the company they serve," and accordingly rejected a motion to dismiss because it was alleged that they "ignored their responsibility to give [appropriate WARN notices] and thereby exposed Debtor to the WARN Act claim."
2016.Jan.06 Paid Leave Delays "Termination Date"(Morton v. Vanderbilt, 6th Cir). Per Law 360.
2013.Mar.26 Asset Purchaser Held Liable for Seller's Employment Liabilities (7th Cir). The 7th Circuit decision reported below provides a good reminder about the federal common law of successor liability for employment-related liabilities, and its potential in asset purchase transactions to surprise buyers – and those who lend to them. Below are two notable quotes from the court’s decision. The case does not relate to WARN claims, but the analysis is worth considering:
Duty to Warn Excused due to Lender Shut-off of Funding (5th Cir.) The 5th Circuit found a "convincing example of an event that meets the unforeseeable business circumstance exception" from giving a WARN notice where the record showed a "possible" termination of outside funding rather than evidence that the employer "probably knew . . . that it would be stripped of funding, causing an immediate shutdown." Although the court noted that the employer's financial condition was "perilous," the court further noted that it took simultaneous action by two lenders to cut off funding, and they did so without warning. See Angles v. Flexible Flyer Liquidating Trust (5th Cir.).
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