Many employers know that the WARN Act requires employers to give notice to employees prior to a plant closing or mass layoff. See 29 U.S.C. §§ 2101-09. But sometimes employers overlook the Act in the context of the sale or purchase of a business, which may involve a plant closing or mass layoff. Whether the seller or purchaser is responsible for providing notice to employees under the WARN Act depends on a variety of factors.
The WARN Act provides that a covered employer must give advance written notice to employees sixty days prior to a plant closing or mass layoff. A covered employer is a business enterprise that employs 100 or more employees excluding part-time employees, or 100 or more employees who in the aggregate work at least 4,000 hours per week excluding overtime.
In the sale of all or part of an employer’s business, the seller is responsible for providing the required sixty days’ advance written notice up to and including the effective date of the sale. After the effective date of the sale, the purchaser is responsible for providing the notice. Any employee of the seller (other than a part-time employee) as of the effective date of the sale shall be considered an employee of the purchaser after the effective date of the sale.
An employer who violates the WARN Act may be liable to each aggrieved employee for back pay and benefits. If you are in the process of selling or purchasing all or part of a business, you should contact your attorney to determine if the WARN Act applies to your transaction.