Does the WARN Act apply if my company is planning to declare bankruptcy?
Author: Michael C. Jacobson, XpertHR Legal Editor
Yes. If your company had plans to commence a mass layoff or plant closing prior to filing for bankruptcy, the filing of bankruptcy will not excuse the company's obligations under the WARN Act. Similarly, if your company continues to run the business during bankruptcy proceedings, it is still required to comply with the WARN Act. However, two of the exceptions to the notice requirements may still apply, namely, the "faltering company" exception and the "unforeseen business circumstances" exception. The key issue is timing: if the company planned for bankruptcy far in advance, then it will likely be bound by the WARN Act despite its economic situation.