Email Our Firm

What does the WARN Act require when a business is sold?

As we've discussed before, the WARN Act generally requires large-scale employers to notify workers of any mass layoffs or plant closures 60 days before the event occurs. We've also discussed some circumstances, such as unforeseeable business events, or dire financial hardship, in which the Act's requirements are diminished. When a large-scale business is sold, however, when and to whom the Act applies can be tricky to determine.

If you're in the process of selling or buying a business, you should consult a local employment law attorney to make sure you are WARN Act compliant.

The Act's requirements will change depending on the point at which any plant closing or mass layoff will occur. For example, if the layoffs occur at any point before or on the day of sale, the seller will be responsible for providing the 60 days notice. If the layoffs occur the day after the sale, or at any point thereafter, the buyer is responsible for providing the notice. The logic is most employees of the seller become employees of the buyer, for the purposes of the WARN Act, immediately following a sale.

But these notice requirements will not apply to every sale. Of course, no WARN notice is required if there is no layoffs or plant closures resulting from the sale. Likewise, if employees were hired with the understanding that a sale would occur at the completion of a particular project, at which point their employment would end, no new notice will be required.

Understanding when the WARN Act applies can be difficult. The benefits that come with avoiding its penalties, however, are clear. If you you're looking to buy or sell a business, you should contact an employment law attorney who can help you determine whether your actions may trigger any WARN Act duties.

No Comments

Leave a comment
Comment Information

Client Testimonials

  1. “Your business model is such a fresh approach to the way legal services are typically delivered.”

    President, Manufacturing
  2. “Phil will help you understand the process you are going through, and is very passionate about your needs and situation.”

  3. “Phil, responded to my numerous questions promptly and completely. Very reasonable rates, no overbilling. Kept me informed of progress.”

  4. “Ben legally clarified the language in my contracts without turning them into super verbose mumbo-jumbo.”

    Kevin L.
  5. “Everyone, that I've interacted with is professional, knowledgeable, forthcoming with information and educating and caring.”

    Alanna C.

425 NW 10th Avenue
Suite 200
Portland, OR 97209

Toll Free: 866-280-7562
Phone: 360-258-1268
Fax: 503-417-4250
Map & Directions