Federal and State WARN Act Compliance in M&A: Notice Requirements, Due Diligence, Best Practices for Buyer and Sellers

This CLE webinar will examine compliance issues under the federal Worker Adjustment and Retraining Notification Act (WARN) and state equivalents in M&A transactions. The panel will offer due diligence considerations for buyers and sellers when determining possible employer obligations in the current transaction, whether the buyer or seller is responsible for providing required notice, and whether there may be any past WARN liability incurred by the seller that could impact the buyer. The panel will also offer best practices for mitigating the risk of costly penalties for noncompliance.

When buying or selling a business, it is critical to consider what employment obligations may be triggered by any sale or merger. A vital consideration that is often overlooked is what notice may be required from the buyers or sellers under the federal WARN Act or state mini-WARN equivalents.

The federal WARN Act requires covered employers to provide 60 days' advance written notice to employees and certain officials in the event of a plant closing or mass layoff, subject to certain exceptions. Additionally, at least 14 states now have mini-WARN acts that may be more stringent than the federal law, with expanded obligations.

Counsel guiding clients through a business sale or acquisition should understand federal and state WARN obligations as they apply to the current transaction, including whether notice is required, who will be responsible for any required notice, and whether any possible past WARN obligations were fulfilled by the seller so as not to impact the buyer. Noncompliance may be costly, including the obligation to pay wages and benefits for up to 60 days to each affected employee and civil penalties.

Listen as our expert panel provides a comprehensive overview of the federal WARN Act and notable state mini-WARN acts, examines employer obligations, and discusses how these may impact M&A transactions for buyers and sellers.