## Facts

- Airtherm Products, Inc. (API) manufactured heating and air-conditioning products.
- Mestek, Inc. sought to purchase API’s manufacturing business and formed Airtherm LLC (ALLC) to acquire the operations.
- On May 24, 2000, API and ALLC executed an asset purchase agreement that contemplated ALLC offering employment to API’s employees.
- Before closing, the parties executed a first amendment (Aug. 21, 2000) requiring ALLC, effective the next working day after closing, to offer employment to: (a) all salaried and clerical employees in St. Louis and Arkansas, and (b) employees in the union bargaining unit.
- The sale closed on Aug. 25, 2000; API terminated its employees effective that date.
- ALLC hired a large share of the former API workforce soon after closing such that fewer than 50 full-time employees experienced a WARN-qualifying “employment loss” within the relevant period.
- Former API employees sued API under the Worker Adjustment and Retraining Notification Act (WARN Act) alleging API ordered a “plant closing” without 60 days’ notice.
- The district court granted summary judgment to employees and awarded $515,661.92 in WARN damages; API appealed and employees cross-appealed on damages/fees issues.

## Issues

1. Whether a seller violates the WARN Act by terminating employees at the closing of an asset sale without 60 days’ notice when the purchaser hires many of those employees after the sale.
2. Whether the WARN Act’s sale-of-business provision and the definition of “employment loss” require counting post-sale employment continuity so that no “plant closing” occurs unless at least 50 employees suffer a qualifying employment loss.

## Decision

- The Eighth Circuit reversed the summary judgment for employees.
- The court held that WARN’s sale-of-business provision applied and, when post-sale hiring was properly considered, fewer than 50 employees suffered an “employment loss.”
- Because the statutory threshold for a “plant closing” was not met, API had no WARN notice liability on the record presented.
- The case was remanded for proceedings consistent with the appellate opinion.

## Legal Principles

- WARN requires 60 days’ notice only when a “plant closing” or “mass layoff” occurs; a plant closing requires an employment loss for at least 50 employees at a single site within a 30-day period.
- In a sale of part or all of a business, notice responsibilities are divided: the seller is responsible up to and including the effective date of sale, and the purchaser after the effective date.
- For determining whether an “employment loss” occurred in a sale, employees who continue working for the purchaser (including through prompt post-sale hiring consistent with statutory/regulatory rules) generally are not treated as having suffered an employment loss attributable to the sale.
- WARN does not impose a requirement that the seller “guarantee” post-sale employment; liability turns on whether a sufficient number of employees actually sustain a WARN-defined employment loss.

## Conclusion

The Eighth Circuit held that an asset sale followed by substantial post-closing hiring by the purchaser did not trigger WARN notice duties for the seller where fewer than 50 employees experienced a qualifying employment loss, and it rejected a rule requiring the seller to contractually guarantee rehiring.


Wilson v. Airtherm Prods., Inc., 436 F.3d 906 (8th Cir. 2006)