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WARN Layoffs Not Triggered When Company Transfers Employment Contracts

When is a "mass layoff" not a "mass layoff" triggering the 60-day warning requirement of the California WARN Act?  When a company sells its contracts to another company, and all the employees receive the same pay, benefits, title and other employment accoutrements as they had with the prior employer. 

The City of Santa Rosa changed waste management providers, and the new WM company offered to buy the contacts between the old company and the City.  The companies executed the sale, but the employees must not have liked the new uniforms, and sued, claiming that the new company violated the WARN Act.  Actually, after the transfer, the new company had a company-wide layoff, which included 20 of the 41 employees from the old company.  The transferred employees sued the old company, claiming a violation.  The Court, however, concluded that the old company had no reason to know of the layoffs, and had no obligation to inform the employees that they would be laid off a month later.

If your company employs more than 75 employees, and you're going to lay some of them off, don't miss these requirements and the case linked above.  There are some fairly complicated twists and turns.

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Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, December 13, 2005 at 12:28 Comments Closed (0) |
 
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