WARNing To “Faltering Companies”: Be Proactive! — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

WARNing To “Faltering Companies”: Be Proactive!

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If your company is in the unfortunate position of having to effect a mass layoff or plant closing, you must take into consideration the Worker Adjustment and Retraining Notification Act’s (WARN) 60-day notice requirement.  The WARN notification period may be shorter under these three exceptions: 1) faltering company, 2) unforeseeable business circumstance, and 3) natural disaster. 


The faltering company exception is narrowly construed.  In order to assert this exception, a company must prove:

 • it was actively seeking capital or business through a commercially reasonable method at the time the 60-day notice would have been required,

 • it had a realistic opportunity to obtain the financing sought,

 • the capital would have been sufficient, if obtained, to enable the employer to avoid or postpone the shutdown, and

 • the employer reasonably and in good faith believed that sending the 60-day notice would have pr...(register to read more)

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