Factors PE Firms Must Consider To Avoid WARN Act Liability

Law360, New York (November 20, 2014, 10:41 AM EST) -- On Sept. 29, 2014, the United States District Court for the District of Delaware affirmed the order of the bankruptcy court granting summary judgment in favor of Sun Capital Partners Inc. and its affiliates and denied an appeal taken by certain employees (the "Jevic employees") of Jevic Transportation Inc. ("Jevic"). In its ruling, the district court held that Sun Cap, which had acquired Jevic in a leveraged buyout, was not liable as a "single employer" for alleged violations by Jevic under the Worker Adjustment and Retraining Notification Act. The district court, focusing on five factors set forth by the U.S. Department of Labor, found that common ownership, common management, control incident to stock ownership, and involvement in implementing a restructuring plan of a subsidiary were insufficient to support a finding of "single-employer" liability of the parent....

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