Jottings By An Employer's Lawyer

Saturday, March 27, 2004

7th Cir. Finds Fact Questions In WARN Act Case

There are not that many WARN act decisions, and even fewer dealing with attempts where the employer did not provide the notice because of business circumstances that were not reasonably foreseeable at the time the WARN notice should have been provided. Here, a hog slaughtering operation's were shut down by the USDA's refusal to allow their products to be shipped. After several pages stating the facts, which made me feel both sorry for the owners who seemed to be trying to do the right thing and losing lots of money in the interim as well as the USDA which seemed serious about protecting the country's meat supply, the Court found that a fact question exists, so it reversed the summary judgment for the employer. Pena v. American Meat Packing Corp. (7th Cir. 3/25/04) [pdf]. The issue for the fact finder was whether or not a reasonable, similarly situated business person would have not foreseen the likelihood of being shut down based on the past notices of performance problems. And the consequences are not insubstantial as there were 350 plaintiffs who got no notice.

If you think about it, the decision is not very supportive of an entrepenurial system as in this case it may very well penalize an unsophisticated businessperson who may with the best of intentions thought he could push forward and survive, only to be pulled up short by governmental action.

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