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When a company sells off a function, does it have to give plant-closing or layoff notice?

by on
in Employment Law,Human Resources

Q. My company is selling a portion of the business that employs more than 100 workers. Do we have any special obligations to provide notice to these employees?

A. Under the federal Worker Adjustment and Retraining Notification Act (WARN), in a sale of part or all of an employer’s business, the seller is responsible for providing notice of a plant closure or mass layoff before the effective date of the sale. After that date, the purchaser is responsible for providing such notice.

When employees are shifted from one employer to another as the result of a sale, WARN’s notice requirement is not triggered merely because employees are technically “terminated” by the seller. Such an event is not considered a plant closing and workers do not suffer an employment loss that would require WARN notice.

Likewise, any modification of salaries and benefits is not considered a covered employment loss.

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