When a company is in financial distress, boards and senior leadership teams confront difficult choices, particularly in managing human capital. If a company seeks bankruptcy protection, having a clear and comprehensive labor strategy can help maintain employee morale, minimize potential disruptions and preserve the value of the enterprise. Developing such a strategy requires understanding the ways in which the U.S. Bankruptcy Code and courts treat employee-related claims. This chapter will cover three workforcerelated claims—those arising from (i) the Worker Adjustment and Retraining Notification Act (“WARN Act”), (ii) severance programs and (iii) withdrawal from multi-employer pension plans—that, if not adequately planned for, can result in significant and potentially unnecessary liabilities.
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