October 3, 2013
When Portfolio Companies Falter There Is Potential Liability For Private Equity Firms Under The WARN Act
Arnold & Porter Advisory
On September 24, 2013, a federal judge in Indiana rejected a private equity firm's motion to dismiss a lawsuit brought against it by a former employee of one of the firm's portfolio companies alleging that the firm violated the Worker Adjustment and Retraining NotificationAct (WARN Act) when the portfolio company, a plastic components manufacturing company, closed and laid off numerous employees without providing WARN Act notice. This case follows a recent trend whereby employees who lose their jobs with a portfolio company seek to hold the related deep-pocket private equity firm responsible for WARN Act liability.
