New York Bankruptcy Court Strikes Defenses To Federal And State WARN Acts

In re: Dewey & LeBoeuf LLP, No. 12-12321 (MG) (S.D.N.Y. Bankr., April 10, 2014): As part of the bankruptcy proceedings involving Dewey & LeBoeuf LLP, the U.S. Bankruptcy Court for the Southern District of New York struck Dewey’s defenses to claims brought by its former employees under the federal and New York State WARN Acts. On May 10 and May 14, 2012, Dewey provided letters to its employees warning that their employment could be terminated due to the firm’s financial condition. However, Dewey did not provide the notices at least 60 and 90 days in advance of its May 29, 2012 bankruptcy filing, as required by the federal and New York State WARN Acts, respectively. Here, the court struck Dewey’s affirmative defenses under the federal and New York State WARN Acts’ so-called “faltering company” and “unforeseen circumstances” exceptions. The decision turned on whether the May 10 and May 14, 2012 letters contained a brief statement describing the reasons for the shortened notice, which is required under both exceptions. The court held that Dewey’s invitation to attend in-person meetings, where 296 of the 429 affected employees attended, was inadequate. In doing so, the court relied upon the plain language of federal regulations and U.S. Department of Labor guidance to find that the exceptions to both WARN Acts require that the written notice provide a brief statement regarding the reasons for the shortened notice in that notice itself. The court also held that the WARN Acts’ bright-line rules allow employees to prepare for the loss of employment and prevent information from “trickling out in piecemeal fashion or in a manner that may not reach all employees.” This decision serves as a reminder that employers should ensure strict compliance with the federal and New York State WARN Acts when closing facilities and/or laying off workers; otherwise, courts and regulatory agencies are unlikely to grant exceptions due to extenuating circumstances.

Note: This article was published in the April 2014 issue of the New York eAuthority.

Topics:  Commercial Bankruptcy, Dewey & LeBoeuf, Hiring & Firing, WARN Act

Published In: Bankruptcy Updates, Civil Procedure Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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