2d Circuit outlines when employees can win under the WARN Act

You do not see many cases brought under the WARN Act, shorthand for the Worker Adjustment and Retraining Notification Act, enacted in the late 1980s, which requires certain employers to notify employees within 60 days of a "plant closing" or that there will be a mass layoff. This case holds that a factfinder may may determine that a restaurant at the Resorts World Casino had to notify employees that it was shutting down because it was sufficiently distinct from the Casino and therefore fell within the WARN Act.

The case is Roberts v. Genting New York LLC, issued on May 15. If an entity is an operating unit within a single site of employment, it must comply with the WARN Act, which provides for damages when the Act is not followed. This is a putative class action, so if the plaintiffs win the case, they will recover mucho damages. Is the restaurant a "single site of employment"? If so, the case goes to trial. This is not an easy call. Under the regulations, an entity is an "operating unit" and subject to the WARN Act if it is "an organizationally or operationally distinct product, operation, or specific work function within or across facilities at the single site." 

What complicates the case is the restaurant is located inside the Casino, so defendant argues that the restaurant is not subject to the WARN Act because it was integrated with the Casino and was not a distinct operating unit. The Court of Appeals (Chin, Newman, and Sullivan in dissent) finds that while the Casino provided the restaurant with centralized services, such as purchasing, warehousing, HR management, and cleaning, other factors suggest the restaurant was an independent operating unit under the Act, in particular, (1) its physical location was in an area separate from other retain outlets and amenities and did not share space with any other restaurant, (2) the restaurant's kitchen prepared all of the hot items it served, operated on an all-you-can-eat basis, and had unique food items, (3) its managers worked there full-time, (4) its employees typically worked there for at least six months and their wages were allocated to the restaurant's cost center, (5) defendant did not treat restaurant personnel as interchangeable with their counterparts at other food outlets, and (6) the servers wore different clothing than their counterparts at the Casino's other eateries. 

All this needs to be resolved by the factfinder. The plaintiffs can still lose the case, as there are factors that militate against the restaurant being a separate entity from the Casino under the WARN Act. In a footnote, the Court says it is an open question of law whether a jury or the trial court is the factfinder in these cases. The majority view is that the trial court makes these determinations because remedies under the Act are equitable rather than legal in nature.