The Sugar Law Center for Economic and Social Justice is a national, non-profit organization, advocating for working people and their communities. We work for economic and social justice by binding corporations and government to their legal and ethical responsibilities. The Sugar Law Center has been at the forefront of WARN Act litigation since 1992. Together with our cooperating attorneys, the Law Center has represented thousands of workers and in hundreds of WARN Act cases throughout the country.
The Sugar Law Center is affiliated with the National Lawyer's Guild.
In Guippone v. BH S&B Holdings L.L.C., 737 F.3d 221 (2d Cir. Dec. 10, 2013), the Court of Appeals considered whether a private equity firm and/or a parent holding company could be liable as a single employer under the WARN Act when layoffs were undertaken at a subsidiary retail clothing store chain. The Court of Appeals upheld the lower court's dismissal of the private equity firm but overturned the dismissal of the parent holding company finding:
The record evidence would allow a jury to conclude that Holdings was so controlled by HoldCo that it lacked the ability to make any decisions independently, and that the resolution passed by HoldCo's board "authoriz[ing] Holdings to effectuate the Reduction in Force" was, in fact, direction from HoldCo to Holdings to undertake the layoffs. Authorizing layoffs is not just a prerogative of ownership—it's a function of being an employer, especially where, as here, HoldCo was the sole member and manager of Holdings, and the HoldCo board operated as Holdings' board. There is sufficient evidence in the record to allow a jury to conclude that Holdings was not free to implement its  own decisions, and that the layoffs were, in fact, directed by HoldCo.
"[B]ecause the balancing of the factors is not a mechanical exercise, if the de facto exercise of control was particularly striking... then liability might be warranted even in the absence of the other factors." Pearson, 247 F.3d at 504 (internal citation omitted). Here, there is sufficient evidence from which a jury could conclude that HoldCo directed the layoffs with no regard to Holdings' separate corporate form. Given this, we reverse the grant of summary judgment to HoldCo.
In late September, the Northern District of Indiana issued an opinion and order denying defendants' motion to dismiss. The court considered whether a private equity firm (Monomoy) could be held liable under the WARN Act for layoffs at plastics manufacturing facility operated by a limited liability company (Fortis). The court found that:
This is a close case, but when each factor is balanced according to its relative weight, Mr. Young’s allegations regarding the status of Fortis and Monomoy as the “single employer” of Mr. Young and the other class members are sufficient to survive Monomoy’s Motion to Dismiss. On the issue of highest importance—the decision to close the Fort Smith Facility—Mr. Young made a number of clear factual allegations regarding Monomoy’s involvement and exercise of control over Fortis. As was noted in Pearson, if sufficiently egregious, de facto exercise of control can be sufficient to warrant liability on its own. Pearson, 247 F.3d at 496.
The case is Young v. Fortis Plastics, L.L.C., 2013 U.S. Dist. LEXIS 137075 (N.D. Ind. Sept. 24, 2013). The court's opinion can be found here.
The American Observer posts a multimedia presentation by Latoya Egwuekwe that starkly reveals the spread of deepening unemployment across the nation. Using U.S. Dept of Labor, Bureau of Labor Statistics data, the presentation titled The Decline: The Geography of a Recession graphically shows continuing increases in county unemployment rates from January 2007 through the present.
The U.S. Department of Labor released its third quarter report for extended mass layoffs. The report finds a record high number of extended mass layoffs for any third quarter previously reported (since data was first collected in 1995). The 1,776 extended mass layoff events affected more than 275,000 workers. The Western and Midwestern states were the hardest hit.
Since being introduced before the U.S. Senate and House of Representatives, WARN Act reform bills (FOREWARN Act) S. 1374 and H.R. 3042 have been referred to and remain pending before committees of both chambers.
In February 2009, the Republic
Windows’ Chicago factory was sold to Sunnyvale, Calif.-based Serious Materials, Inc. Serious Materials is a manufacturer of environmentally sustainable construction products. Serious Materials has pledged to reopen the
factory and hire back the factory’s former workers. On December 2 last year, the
owners of Republic Windows and Doors announced that their Chicago factory would
be shutting down in three days. In the
weeks preceding, the company’s union workers noticed equipment being moved out
of the plant at night and suspected that the owners were selling off equipment and
planning to close the facility. With the
December 2 announcement, workers feared that the company planned to liquidate the
remaining equipment and were closing the facility in violation of the workers’
rights under the WARN Act and without payment of back pay, accrued vacation,
and other benefits. (See reports here and here). The employer claimed that the
plant was being closed because the company’s primary lender, Bank of America,
refused to extend further credit. Bank
of America had recently received approximately $25 billion from the federal
government – money, which, among other purposes, was expected to be used to
extend loans to companies facing circumstances similar to Republic
Windows. The workers however also learned
that, while claiming to be without cash, the owners of Republic Windows had
recently purchased a nonunion facility in Iowa. On
December 5, over 200 workers engaged in the first worksite sit-in seen in this
country in many years when the workers refused to leave the factory until management
negotiated the payment of severance pay and benefits. With the support of their union, the United Electrical, Radio and Machine Workers of
Electrical, Radio and Machine Workers of America (UE), and the support of people throughout the country, Republic
Windows workers obtained a settlement and voted to leave the factor after ten
California This site has listings of committee members and contact information for state Senators and Representatives.
California Assembly Bill, AB 1543 Bill would require the Employment Development Department, upon receipt of the written notice of mass layoff or closing, to forward a copy of the notice to the Governor’s Office of Business and Economic Development and to post the notice on state website.
Minnesota This site has listings of committee members and contact information for state Senators and Representatives.
New Jersey Assembly Bill, A2278 Bill would require the Council on Affordable Housing to adjust a municipality's fair share obligation to reflect any permanent job loss within a municipality upon petition of the municipality. Related bill at A1264.
New Jersey This site has listings of committee members and contact information for state Senators and Representatives.
Vermont This site has listings of committee members and contact information for state Senators and House Representatives.
Wisconsin Assembly Bill, AB 375 Bill authorizes state economic development corporation to designate as a development opportunity zone an area in a county that experiences a mass layoff or business closing.
Wisconsin This site has listings of committee members and contact information for state Senators and Assembly members.
Wisconsin Senate Bill, SB 293 Bill authorizes state economic development corporation to designate as a development opportunity zone an area in a county that experiences a mass layoff or business closing.