LIVERPOOL, N.Y. (CNY Central) — Smokey Bones Bar & Fire Grill in Liverpool has closed its doors for good, as the restaurant chain has announced every one of its locations will be permanently closing.
The Liverpool location is one of more than two-dozen nationwide shutting down. The restaurant’s parent company, Fat Brands, announced in September it would close 15 “underperforming” restaurants. Then in January, Fat Brands filed for Chapter 11 bankruptcy, citing a “challenging restaurant operating environment.”
It’s unclear if the restaurant gave a warning to workers prior to closing, which is something that could go against New York state’s Worker Adjustment and Retraining Notification Act, or “WARN Act.”
“It requires employers to provide notice to employees before doing any, what they call plant closings or mass layoffs. Basically, if they’re going to layoff, terminate the employment of a large number of people, then in most circumstances, they need to provide certain advance notice,” said Jared Cook of Tully Rinckey PLLC.
If a business lets people go without a 90-day notice, it could be in violation of the WARN Act, and employees have options.
“Employees can file a complaint with the Labor Department, and they may investigate. They may impose penalties. They also can sue, on their own. They can sue the employer and say, you didn’t give me my WARN notice, and they can be entitled to, if they win, they can be entitled to payment for the wages that they would have earned during that 90-day notice period,” said Cook.
Cook also says there are exceptions which could limit a company’s liability involving the WARN Act.
“There’s one called the Faltering Company Exception, which basically says if your position is so bad financially and you’re trying to obtain financing, and if you do obtain financing, then you won’t need to close. And you’re afraid that giving notice, you have a reasonable basis to believe that giving notice will cause the deal that you’re about to get to fall through. There can be a defense there. There’s also what they call the Unforeseeable Business Circumstance Exception, which basically says that if something happened that was totally out of your control, then you may not be held liable. Now, both of those, again, those are defenses that the employer would have to raise. So it’s not going to keep them from getting sued necessarily,” said Cook.
Should a company be found liable of breaking the WARN Act, Cook says whoever filed the lawsuit could be entitled to compensation.
