Update: The United States Supreme Court has agreed to hear the Jevic Employees’ appeal.
On or around May 19, 2008, Jevic Transportation shut down and terminated its approximately 1,800 employees. On May 21, 2008, Outten & Golden filed a WARN suit seeking recovery of WARN Act damages of 60 days’ wages and benefits from the Jevic bankruptcy estate and from Jevic’s owner Sun Capital Partners, Inc. on behalf of those employees. The suit was brought in the U.S. Bankruptcy Court for the District of Delaware and alleged claims under the federal WARN Act and New Jersey WARN Act.
In 2008, the Bankruptcy Court certified the case as a class action. In 2013, the Bankruptcy Court determined that Jevic was liable to its former New Jersey employees under the New Jersey WARN Act, but was not liable to its former non-New Jersey employees due to the federal WARN Act’s unforeseeable business circumstances defense (which is not a defense under the New Jersey WARN Act). The Court, however, determined that Sun Capital was not liable to any of Jevic’s former employees under either WARN Act. Outten & Golden appealed the Court’s decision that Sun was not liable. On appeal, the district court sided with Sun Capital. Outten & Golden appealed again to the Third Circuit Court of Appeals.
Most recently, the Court of Appeals issued its decision on July 27, 2016, affirming the Bankruptcy Court’s order in favor of Sun Capital. The Plaintiffs’ only further route of appeal would be to the U.S. Supreme Court.
Separately, in 2012, the Bankruptcy Court approved a settlement between Jevic’s lender CIT, Sun Capital, and Jevic’s creditors. The settlement distributed money from the Jevic bankruptcy estate but excluded the Jevic employees although their claims are entitled to priority under the Bankruptcy Code. This settlement (referred to as a “structured dismissal”) made it impossible for the Jevic employees to collect anything from Jevic on their successful New Jersey WARN Act claim. We appealed this outcome to the Delaware District Court and Third Circuit Court of Appeals, but, again, neither appeal was successful. Nevertheless, we did appeal to the U.S. Supreme Court. In June of 2016, the Supreme Court agreed to hear the appeal, which we expect will be argued in December of 2016.
Generally, the WARN Act requires companies to provide their employees with 60 days written notice in advance of a mass layoff or plant closing. In the absence of such notice, employers may be liable to each affected employee for 60 days wages and benefits.
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OUTTEN & GOLDEN LLP
685 Third Avenue, 25th Floor
New York, NY 10017
Toll Free: 1-877-4-OUTTEN
To contact us regarding this matter, please call 1-877 4-OUTTEN and ask for René Roupinian or email her.
For more information regarding the WARN Act, visit our WARN Act website.
(*Prior results do not guarantee a similar outcome.)