Bill Seeks to Broaden Scope of WARN Act to Include Mass Layoffs at Multiple Franchise Locations

On December 6, a bill (A3583) was introduced and referred to the Assembly Labor Committee that would revise the definition section of the Millville Dallas Airmotive Plant Job Loss Notification Act (also known as New Jersey’s “WARN Act”) to significantly broaden the scope of the Act by expanding the definitions of “employer” and “establishment.”

First, the bill would expand the definition of “employer” to include “a holding company or franchisor which operates one or more franchise locations, and all of the franchise location owners or franchisees of the franchisor.” Second, the bill would expand the definition of an “establishment” to include “one or more franchise locations of a franchisor.” Third, the bill defines “franchise location” as “an establishment operated by a franchisee of a common franchisor, which establishment may share a common name or business model with one or more other franchise locations of a common franchisor.”

This proposed legislation therefore would require holding companies and franchisors/franchisees to take into consideration future terminations/layoffs, etc. at potentially many different facilities in order to determine if the combined total number of separations from employment during any 30-day period constitutes a “mass layoff” as defined in the Act, which would in turn trigger New Jersey WARN Act notification requirements.