WARN Liability: Who’s In Control?

Last month, we wrote about Young v. Fortis Plastics, where an Indiana District Court found that a private equity firm could be on the hook for the WARN Act liabilities of one of its portfolio companies under the "single employer" doctrine. We noted that the court there focused on the allegations that the private equity firm had de facto control over the portfolio company because it was closely involved in management decisions that resulted in the plant closure. The court held that, even in the absence of other factors that could give rise to single employer liability, such de facto control alone could result in single employer liability. Recently, another federal court, this time the Second Circuit Court of Appeals, in Guippone v. BH S&B Holdings, again focused on the locus of control of the employment decisions to find parent WARN liability for the mass layoff at a partially owned subsidiary.