With No Warning, Charlie Brown’s Closes 13 New Jersey Restaurants

The Star-Ledger - Leslie Kwoh
November 17, 2010

Beef lovers who showed up at 13 Charlie Brown’s Steakhouses in New Jersey on Monday were probably surprised to see their neighborhood restaurant had closed without warning.

But employees might have been just as surprised. The chain’s abrupt announcement it was shuttering 20 restaurants in the tri-state area — affecting 1,400 workers — exposes cracks in the state and federal WARN Acts, employment experts said yesterday. Those laws aim to prevent such surprises by requiring companies to file notices with employees, state and local officials 60 days before closing a location that will affect 50 or more full-time employees.

CB Holdings, the company that runs Charlie Brown’s, never filed a WARN notice, the state Labor Department confirmed yesterday. Companies that fail to file such a notice can be subject to penalties equal to 60 days’ pay for employees, but only if workers successfully sue the company, said department spokesman Kevin Smith.

Companies can skirt the law if they have fewer than 50 full-time employees at each location.

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Rich Covey, a CB Holdings spokesman, said yesterday he was unaware of the WARN Act. He declined yesterday to give more details on the closings, saying they were spurred by “underperformance.” The chain will work with employees to find other positions, he said.

Manhattan employment attorneys Jack Raisner and René Roupinian, who specialize in the WARN Act, said because the law allows companies to count the number of employees affected by location — instead of companywide — the chain could indeed be exempt.

“That’s the biggest problem with the WARN Act — there doesn’t appear to be any rhyme or reason,” Raisner said.