Second Circuit Vacates Ruling On WARN Act Notice Claims – Redundancy/Layoff

On May 15, 2023, the Second Circuit vacated the entry of summary
judgment on Worker Adjustment and Retraining Notification Act and
New York Labor Law § 860 et seq. (collectively, the “WARN
Acts”) claims, holding that a reasonable factfinder could
conclude that a buffet restaurant operating inside of a casino was
considered an operating unit for purposes of the WARN Acts, and was
therefore subject to written notice requirements for mass layoffs.
The case is Roberts v. Genting New York, LLC, No.
21-833.

Background

In January 2014, Defendant closed a buffet restaurant located
inside the Resorts World Casino where Plaintiffs worked. Defendant
gave Plaintiffs no notice of the closure, which took effect the
same day and resulted in 177 employees being laid off. Plaintiffs
then filed a putative class action against Defendant in the United
States District Court for the Eastern District of New York,
alleging that Defendant’s failure to provide notice of the
layoffs violated the WARN Acts.

Following discovery, the parties filed cross-motions for summary
judgment. In March 2021, the District Court denied Plaintiffs’
motion and granted Defendant’s motion, holding that the buffet
was not an “operating unit” or a “single site of
employment” for purposes of the WARN Acts, and therefore
written notice of the layoff to affected employees was not
required.

Plaintiffs appealed the ruling, arguing that the lower court
erred in granting summary judgment because a reasonable finder of
fact could have determined that the buffet was its own operating
unit or single site of employment, such that WARN notice
should have been provided.

Second Circuit’s Ruling

The Second Circuit affirmed the denial of Plaintiffs’ motion
for summary judgment and vacated the grant of Defendant’s
motion for summary judgment, holding that Defendant was not
entitled to summary judgment because a reasonable factfinder could
conclude that the buffet was an operating unit. The court explained
that there was evidence to support both parties’ arguments,
therefore it should be up to a jury to decide the issue of whether
the buffet is an operating unit.

The court explained that while the buffet did not share space
with any other restaurant and had its own entrance and exit, it was
also an open-air outlet that was not separated by walls or
doors.

Further, the buffet had its own managers who supervised
employees and oversaw their schedules, while the executive chef
oversaw the menus at all of the food service outlets at the casino.
Additionally, the servers, cashiers, and bus persons who worked at
the buffet wore different color shirts than their counterparts at
the casino’s other food outlets, however, the buffet’s
cooks, stewards, and hosts wore the same uniform as people
throughout the casino. Taken together, this evidence presented a
genuine issue of material fact as to whether the buffet constituted
an operating unit within the meaning of the law.

Among the takeaways from this case is that when planning a
layoff that will result in a shut down of a discrete department,
division or operation within a workplace, employers should consider
the WARN implications of such an action, particularly if the number
of employees impacted by the layoff will meet the statutory
thresholds for federal or state WARN laws.

Second Circuit Vacates Ruling On WARN Act Notice
Claims

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