Court Tightens Exceptions to Plant Shutdown Warning Requirements

Wth the economy in a historic tailspin, the next round of layoffs and factory closings cannot be far behind.
Most employers know that under the Worker Adjustments and Retraining Notification Act (WARN), co mpanies that employ at least 100 full-time workers must give 60 days written notice before a shutdown.

The law, which became effective in early 1989, says written notice of a closing or mass layoff must be provided if 50 or more workers will lose their jobs when a particular site or operating unit is closed or if a layoff will affect 50 employees representing a third or more of the workforce.

Matter of Timing

APA had drawn funds from a revolving credit facility with Transamerica Business Capital Corp. since 1996, but the trucker defaulted on its loan covenants several times. Each time, the lender either waived the breaches or amended the covenants. After the Sept. 11 attacks, APA's business plunged 30 percent and the company sustained heavy losses.

Judith Crown

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