Second Circuit Holds Lender Is Not Employer of Borrower’s Employees for WARN Act Liability
This memorandum addresses the United States Court of Appeals for the Second Circuit's decision in Coppola v. Bear Stearns. There, the Second Circuit considered lender liability under the Worker Adjustment and Retraining Notification Act ("WARN") and held that a creditor who exercised "substantial" control over its borrower's business as part of a workout strategy was not an "employer" under WARN and therefore was not liable to the borrower's employees for failure to give advance notice of termination. This memorandum discusses the court's opinion and considers the practical implications.