In the face of recent reductions-in-force and predictions of a recession (Harriet Torry & Anthony DeBarros, Economists Now Expect a Recession, Job Losses by Next Year, Wall St. J., Oct. 16, 2022), employment lawyers are dusting off their research regarding the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et seq., and similar state laws (the WARN Acts). These laws require employers to provide workers at least 60 days’ advance notice of plant closings or mass layoffs.

Although the federal WARN Act has been in place for decades, only in recent years have courts addressed certain new theories for application of these laws to distressed companies considering the protections of the bankruptcy laws. In bankruptcy proceedings, employers have argued that WARN Act damages arising prior to filing of the bankruptcy petition constitute “general unsecured claims” subject to significant reduction in ultimate recoveries by workers.