Labor & Employment Law Daily Wrap Up, LABOR—LAYOFFS—S.D.N.Y.: Employer need not issue second WARN Act notice after decision to renovate hotel, (Sep 9, 2025)

By Ronald Miller, J.D.

The only wrong the employer now stands accused of is failing to issue a second WARN Act notice indicating that there were new reasons for postponing the recall of hotel employees going beyond the originally stated reasons related to the pandemic.

Hotel employees lacked standing to pursue a WARN Act suit alleging that their employer failed to issue a second notice regarding renovation to a hotel that extended the time before it would reopen following the COVID shutdown, ruled a federal district court in New York. With the advent of the COVID-19 pandemic, the employer closed the hotel pursuant to emergency public health orders. It’s failure to issue a timely WARN Act notice was excused under the unforeseen business circumstances exception. Although the court determined that the employees were entitled to the second WARN Act notice, it nevertheless concluded that the employer’s failure to supplement its prior, and no-longer-accurate, WARN Act notice did not constitute a concrete, immediate, personal injury-in-fact giving rise to standing under Spokeo, TransUnion, and Guthrie (Staley v. Hotel 57 Services, LLC, No. 22-cv-6781 (JSR) (S.D.N.Y. Sept. 4, 2025)).

COVID-19 pandemic. On March 7, 2020, the New York governor declared a state-wide public health emergency, followed soon thereafter by a similar nation-wide declaration by President Trump. About two weeks later, the employer suspended much of its services and many of its employees with the stated expectation of resuming services in a few weeks. However, the pandemic worsened, and there were further suspensions pushing the reopening date further into the summer.

WARN Act notice. Finally, on August 5, 2020, the employer issued a letter to approximately 464 employees, which was characterized as a “notice pursuant to the WARN Act,” that stated that the employees’ “temporary” layoffs were now being extended indefinitely “due to unforeseen business circumstances.” Although the notice did not fully comply with all the requirements of the WARN Act, the court previously ruled that it was timely in light of unforeseen business circumstances.

However, this was not the end of the story. The WARN Act notice of August 5, 2020 expressly told each employee that because of travel and tourism disruptions stemming from the pandemic, the hotel would continue temporary layoff for an as-yet-undetermined number of months. This created a reasonable expectation on the part of employees that their furlough would end once the pandemic moderated to the point that the hotel could be expected to reopen, said the court.

Hotel renovations. After the lifting of the state and federal pandemic emergency orders in May 2023, many hotels similar to the employer began to reopen. By contrast, the employer did not reopen until November 2024. The decision had been reached by the employer by June 25, 2021 to undertake major renovations of the hotel, which began even before the pandemic was over. Further, at some point, the employer knew that the renovation work would require the hotel to remain closed well beyond the point at which the lifting of pandemic restrictions would otherwise permit it to reopen.

The court previously held that the employer was required to issue a new WARN Act notice so that employees could understand that their previous reasonable expectations that the hotel would reopen, and that they could resume employment shortly after the pandemic subsided, was no longer accurate. However, no such additional WARN Act notice was ever issued.

Second WARN Act notice. That brought the court to the matter at hand: in what way, if any, were the employees harmed by the employer’s failure to issue this second notice?

In an ordinary WARN Act case such harm can often be shown since the Act mandates that employer continue to employ its regular employees for a least 60 days after the employees are given the WARN Act information, failing which they can sue the employer for up to 60 days of back pay that they would have received if the employer had complied with the Act’s mandated timing. But in this case the otherwise untimely issuance of the original notice was legally permissible under the untimeliness exceptions provided in the statute. The only wrong the employer now stood accused of was failing to issue a second WARN Act notice providing further information indicating that there were new reasons for postponing the recall of hotel employees going beyond the originally stated reasons related to the pandemic, and that these new reasons would require a further extension of the already-in-place closure.

With renovations already well underway before the pandemic emergency orders were lifted, it would be totally unrealistic to expect the employer to reopen before they were completed, noted the court. But this did not erase the employer’s obligation to correct the now-false impression created by its prior WARN Act notice that it was just the pandemic that was keeping the hotel closed and that the long-furloughed employees could reasonably expect to return to work at last once the pandemic was effectively over.

Thus, when circumstances render an earlier WARN Act notice no longer accurate, a new notice is required to make employees aware of the new decisions being made and the consequences thereof for the furloughed employees.

Nevertheless, the employees’ defeated expectations, and the employer’s failure to supplement a prior no-longer-accurate WARN Act notice in light of new factors requiring new scheduling, do not constitute a concrete, immediate, personal injury-in-fact giving rise to standing under Spokeo, Inc. v. Robins, 578 U.S. 330, 330 (2016), TransUnion LLC v. Ramirez, 594 U.S. 413, 430-31 (2021) and Guthrie v. Rainbow Fencing, Inc., 113 F.4th 300 (2d Cir. 2024). Here, there was no indication that these informational derelictions caused specific economic loss to any already-furloughed employees, let alone the class.

Pocketbook injury. The employees had contended that the backpay and benefits authorized by the WARN Act constituted “classic pocketbook injury sufficient to give them standing.” They also argued that all class members have suffered at least “employment loss,” as that term is defined by the WARN Act.

With the employees having already been furloughed and having received a prior WARN Act notice, the failure to supply further information in the form of a further WARN Act notice did not cause any additional loss of pay. Thus, any recovery for the failure to file the second WARN Act notice would in fact be in the nature of a statutory penalty for that failure, rather than an actual compensation for loss pay.

Accordingly, the employees’ action was dismissed for lack of standing.

The case is No. 22-cv-6781 (JSR).

Judge: Rakoff, J.

Attorneys: Brian Lewis Bromberg (Law Offices of Brian Bromberg) for Selena Staley, Vivian Holmes, and Olive Ivey. Kathryn Lundy (Smith, Gambrell & Russell) for Hotel 57 Services, LLC, Hotel 57, LLC, Ty Warner Hotels & Resorts LLC, H. Ty Warner, and FSR International Hotel Inc. dba Four Seasons Hotels and Resorts.

Companies: Hotel 57 Services, LLC; Hotel 57, LLC; Ty Warner Hotels & Resorts LLC; FSR International Hotel Inc.; Four Seasons Hotels and Resorts

Cases: Labor Layoffs Covid19 ClassActions NewYorkNews