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Defunct restaurant must pay former employees for lack of notice

Many Houston residents likely have not heard of the Worker Adjustment and Retraining Notification Act (the WARN Act), but it is a crucial piece of legislation that protects certain employees who work for certain companies that employ at least 100 people.

The WARN Act is especially pertinent to employees who are laid off without notice or if a place of business closes without any warning. The employees are supposed to receive at least 60 days notice in either case. When they are not given this vital period to prepare for a major financial and career change in their life, it can leave a former employee in a very difficult situation.

For 140 employees at a specialized (and now nonexistent) restaurant in Baltimore, Maryland, their former employer's failure to uphold the WARN Act has resulted in a civil lawsuit victory for them.

According to the lawsuit, the employees of an ESPN Zone restaurant were not given 60 days notice about the establishment's closure in 2010. The owners of the restaurant countered, saying they paid employees for the work they would have done in that 60-day window -- a consolation for not giving actual notice.

However, the owners took their deviousness a couple of steps further. The "60 days of pay" that employees received were based on work projections from a time period when many employees had less work or lower wages. In addition, the owners deducted this pay out of severance they owed the laid off full-time employees.

Legally, severance must be paid to an individual who is laid off (and qualifies for it) -- a sentiment that was upheld by the judge presiding over the case.

The employees who qualify will receive payments that cover the "60 days of pay" that were deducted from the severance packages, and all employees will receive payments that are made under a normal 60-day window -- not one that shorts the employees based on external factors.

Source: Baltimore Sun, "Judge rules former ESPN Zone workers due additional compensation," Kevin Rector, Jan. 3, 2013

  • When an employee is let go, severance is a vital windfall that allows their life to move along in a normal fashion -- at least for a while. Our law firm handles severance negotiation cases so that you can transition to your next job more easily.

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