507 B.R. 522
Bankr. S.D.N.Y.2014Background
- Dewey & LeBoeuf LLP collapsed in May 2012, leading to mass layoffs and WARN Act exposure for the bankruptcy estate.
- Class plaintiffs allege they were terminated without the statutorily required 60 or 90 days’ notice, as applicable, under federal and New York WARN Acts.
- Dewey answered with two affirmative defenses: (i) faltering company and (ii) unforeseeable circumstances, which allow shortened notice with a brief written statement.
- May 4 and May 10, 2012 WARN notices were provided but did not include the required brief statement; meetings and emails were used as supposed supplements.
- Plaintiff moved for partial summary judgment or judgment on the pleadings to strike the two defenses; the court held the brief statement must be included in the written notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the brief statement must be in the WARN notice | Conn argues the brief statement must be in writing with the notice | Dewey argues meetings/e-mails suffice as the brief statement | Yes; the brief statement must be in the written notice |
| Whether the faltering company defense is precluded without written brief statement | Conn contends defenses require proper written brief statement | Dewey contends statements in meetings satisfy the brief statement | Yes; not satisfied, defenses struck |
| Whether the unforeseeable circumstances defense is precluded without written brief statement | Conn argues for written brief statement with notice | Dewey argues meetings suffice for the brief statement | Yes; not satisfied, defenses struck |
Key Cases Cited
- Grimmer v. Lord Day & Lord, 937 F.Supp. 255 (S.D.N.Y.1996) (summary judgment on inadequate brief statement)
- In re Tweeter Opco, Inc., 453 B.R. 534 (Bankr.D. Del.2011) (summary judgment where no adequate brief statements provided)
- Advanced Accessory Systems, 443 B.R. 756 (Bankr.E.D.Mich.2011) (warning that meetings cannot substitute for written brief statement in narrow reading of exception)
- Barnett v. Jamesway Corp., 235 B.R. 329 (Bankr.S.D.N.Y.1999) (cannot invoke exception without some written notice)