As A&P Employees Await Word on Bankruptcy Layoffs, They Need to Prepare, Lawyers Say

New York, NY (PRWEB) December 13, 2010

A&P’s 40,000 employees are awaiting to hear news about their jobs as the company's fate swings in the balance. Many who were preparing to load up on holiday purchases now face the possible loss of their employment, perhaps even their health insurance. Having been given no notice of a bankruptcy filing, employees may wonder whether their jobs are safe - or whether they may be laid off at any time. Unfortunately, employees of companies in distress are often terminated with little or no notice in violation of their rights.

The WARN Act requires that when large companies close or order deep layoffs, employees must receive advance written notice. With proper notice, employees can plan ahead and perhaps avoid spending lavishly before the pink slips go out. During the ongoing recession, thousands of employees have been caught by surprise even after their bosses told them not to listen to rumors of layoffs or bankruptcy.

Employees of large retailers often do not receive 60 days notice prior to termination, which has led to WARN cases against such big-name chains as Fortunoff and Steve & Barry’s according to Jack A. Raisner, a partner at the national employee rights law firm of Outten & Golden LLP. The good news, according to attorney Raisner, is that retail chains seldom terminate all employees immediately upon filing for bankruptcy. “Store-level personnel are needed to run the going-out-of-business sales,” he says, “but those in headquarters may be the first to go without notice. What we saw in Fortunoff and Steve & Barry’s is that many employees in the headquarters and distribution centers were terminated immediately. These include senior staffers whose administrative and planning services are no longer needed. In those cases we promptly filed WARN suits in the bankruptcy courts on their behalf.”

Although it may take months for large chain stores to wind up and go out of business, Raisner cautions that even some store-level employees at struggling locations may be terminated quickly and without adequate notice, as the chains sometimes attempt to save money by consolidating inventory during the going-out-of-business process.

Of course, not all retailers completely shut down in bankruptcy. K-Mart kept operating after it filed for bankruptcy in 2002, although it did restructure by closing many stores and laying off thousands of employees. But the recent trend, says Raisner, is for companies to file for bankruptcy with hopes of quickly finding a buyer of their assets who can continue to run the stores profitably once the burdens of debt and union contract obligations are lifted in bankruptcy. Says Raisner, “even if A&P stays open as a going concern and finds a purchaser, employees may still face termination and have to reapply for their jobs in the event of a sale - in which case WARN notice is required, too. So whether there is a wind-down or buy out, employees should be told the score so they can plan for themselves, just as the company and its executives are probably doing.”

Attorney René S. Roupinian, who co-chairs Outten & Golden LLP’s WARN Act group (http://www.warnlawyers.com ), points out non-union A&P employees in particular may have added unease as they wonder how they would support themselves and pay for their ongoing medical treatment and drugs – much less emergency care - if they are laid off. Although medical insurance plans for unionized workers may operate through bankruptcy, often health plans for non-union employees are terminated in bankruptcy leading to many angry workers and lawsuits. Roupinian observes that “non-union employees usually find they have no COBRA to buy-into, no readily available medical insurance plan exists for them, and even if they find it - how will they pay for it? One of the reasons why advance notice of termination is so important is it permits employees to arrange for health insurance, prescription purchases and ongoing medical treatment. If proper notice is not given, the WARN Act allows employees to recoup those costs.”

A&P employees in New Jersey and New York may be helped by the mini-WARN laws enacted by those two states as well as the federal WARN Act(Worker Adjustment and Retraining Notification Act). New York’s WARN Act requires 90 days notice instead of 60 days under the federal law. New Jersey's WARN law (Millville Dallas Airmotive Plant Job Loss Notification Act) provides back pay for violations of the law at the rate of one week per year of service which can exceed the 60 days of pay available under the federal law. According to Raisner, A&P’s management should provide employees as much notice as possible whatever the future holds. He urges employees to be cautious in their finances, and to begin looking into possible healthcare alternatives as they await to hear word of the outcome of A&P’s tribulations.

Outten & Golden LLP represents almost two thousand former Jevic Transportation employees in one of the first cases brought under the New Jersey WARN law (Czyzewski. vs. Jevic Transportation, Inc., et al., No. 08-50662, U.S. Bankruptcy Court for the District of Delaware), and filed the first major New York WARN law cases: Fortunoff (Iannacone v. Fortunoff, Case No. 09-10497, U.S. Bankruptcy Court for the Southern District of New York), and Caritas Healthcare (Curry v. Caritas Health Care, Case No. 09-40901, U.S. Bankruptcy Court for the Eastern District of New York). The firm's WARN lawsuit against Steve & Barry's is in litigation. (Guippone v. BH S&B Holdings, et al., Case No. 09 Civ. 01029, U.S. District Court for the Southern District of New York).

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