Understanding the WARN Act and Its Impact on Business Transactions

In this episode, host Rachel Reese unpacks the Worker Adjustment and Retraining Notification Act (WARN Act), a critical but often overlooked law that can significantly impact companies during plant closures, mass layoffs, and large-scale transactions. With recent examples like Chevron’s WARN Act notice, Rachel explains how the law applies, the penalties for non-compliance, and the exceptions that business leaders need to keep in mind.

She discusses why executives and dealmakers must pay special attention to WARN Act compliance during acquisitions and divestitures—especially when assuming employees from large asset purchases. Rachel also highlights how WARN Act obligations can surface in the reps and warranties section of major transactions and what you should do to protect your company from unexpected liability.

In addition, Rachel covers the 10th Circuit’s ruling in Atlantic Richfield v. NL Industries, a recent case with major implications for contribution claims under CERCLA. The decision underscores the importance of timing, statutes of limitation, and properly classifying environmental cleanup claims to avoid being left holding the bag.

Whether you’re an executive, investor, or legal professional in the energy sector, this episode offers actionable insights to help you avoid costly missteps, strengthen your compliance strategies, and prepare for the “great divestiture” on the horizon.

For more detailed show notes, navigate using the timestamps below:

[0:00] Introduction

[1:15] Preview of the Dealmakers Haunted Hall Halloween Gala (October 23)

[2:44] Chevron WARN Act notice and why this law matters

[3:11] WARN Act basics – requirements, thresholds, and penalties

[3:29] Key exceptions and the 90-day lookback rule

[3:55] Why WARN Act issues matter in acquisitions and asset deals

[4:23] Compliance considerations in reps and warranties

[4:49] How industry consolidation raises WARN Act risks

[5:14] Case law update introduction – Atlantic Richfield v. NL Industries

[5:45] Background of the contamination case

[6:12] EPA settlement and lawsuit for contribution

[6:39] District court ruling and appeal

[7:09] The critical distinction: contribution vs. cost recovery

[7:46] Why the 10th Circuit allowed Atlantic Richfield’s claim to proceed

[8:16] Why contribution timing matters for your company

[8:43] Key takeaway: protect your company by identifying all responsible parties early

If you enjoyed this discussion and would like to explore how RR&A’s Outsourced Legal Department can help your company, visit the R. Reese & Associates Website: https://rreeselaw.com/

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