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Klehr Harrison Harvey Branzburg LLP: Will Hostess Brands Layoffs Violate the WARN Act?

 Klehr Harrison Harvey Branzburg LLP: Will Hostess Brands Layoffs Violate the
                                  WARN Act?

PR Newswire

PHILADELPHIA, Nov. 16, 2012

PHILADELPHIA, Nov. 16, 2012 /PRNewswire/ --Hostess Brands today announced
that it is seeking Bankruptcy Court approval to sell its assets and
immediately shut down operations on Tuesday November 20, potentially resulting
in a job loss to 18,500 employees.

The Worker Adjustment and Retraining Notification Act (WARN Act) requires
employers to give 60 days notice to employees if more than 50 employees are
laid off at any one location. Failure to give the 60 days notice entitles
employees to damages equal to the wages and benefits that would have been
earned during the 60 day notice period.

The WARN Act has an exception for layoffs resulting from a strike or lockout.
However, that exemption may not apply to Hostess's decision, said Charles A.
Ercole, an attorney who specializes in WARN Act cases and is a partner at
Klehr Harrison Harvey Branzburg LLP in Philadelphia, Pennsylvania. "The
Churchill case held that a three day strike permitted the employer to avoid
WARN Act liability when it subsequently shut down the company without giving
notice. Many people think Churchill was wrongly decided and would not be
followed by other courts. For example, in the USF Red Star case, we
successfully argued that the WARN Act exemption does not allow an employer to
avoid WARN Act liability merely because it chooses to shut down the plant
without giving notice because there was a job action." In USF Red Star, the
employer immediately shut down the company after a one day strike and laid off
2000 employees without giving 60 days notice. The company eventually settled
the WARN Act claims for $7 million.

Mr. Ercole says that his firm is continuing to monitor and investigate the
Hostess situation for WARN Act and other labor law violations.

SOURCE Klehr Harrison Harvey Branzburg LLP

Contact: Charles Ercole, +1-215-569-4282, cercole@klehr.com
 
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