WARNING: Control Can Result in WARN Act Liability

Andy Kassner and Joe Argentina authored an article in The Legal Intelligencer titled, “WARNING: Control Can Result in WARN Act Liability.”

Governance structures utilized by private equity funds continue to be examined by the courts when the investment fails and the acquired company files for bankruptcy. Andy and Joe previously reported how a court analyzed PE fund structures in the context of federal statutory pension withdrawal liability. In this column, they turn to Guippone v. BH S&B Holdings LLC, No. 12-183-cv (December 10, 2013), where the Second Circuit Court of Appeals held that the parent holding company established by investment funds can be held liable under the Worker Adjustment Retraining and Notification Act (“WARN Act”) if it directs the employment practice that forms the basis for liability of its subsidiary.