Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—Fact dispute over WARN Act coverage of Scribe Media related to abrupt layoffs leads court to deny employees’ request for judgment, (Jul 17, 2026)

By WK Editorial Staff

However, the court granted summary judgment in favor of the asset purchaser on the employees’ claims of purchaser or successor liability.

In a lawsuit brought in federal district court in Texas by former Scribe Media, LLC, employees who allege that their former employer violated the federal WARN Act, the court handed down mixed rulings earlier this week, denying the employees’ motion for summary judgment while also ruling that Bond Financial Technologies Holdings cannot be held liable for Scribe’s alleged violations under purchaser or successor-liability theories. The July 13 order issued by Senior U.S. District Judge David Alan Ezra of the Western District of Texas narrows the case but leaves unresolved whether Scribe itself violated the WARN Act when it terminated dozens of employees in May 2023.

Benefits ended at midnight on notification day. The lawsuit was filed by four former Scribe employees on behalf of themselves and a certified class of former workers. In it, they allege that Scribe, an Austin-based publishing and media services company, abruptly terminated approximately 90 of its 128 employees during a conference call on May 24, 2023, without providing the 60 days' advance notice required under the WARN Act. According to the complaint, written notices sent the same day informed workers that their terminations were effective immediately and that benefits would end at midnight.

In addition to Scribe, the employees named as defendants Enduring Ventures, Inc., Enduring Consulting Group, LLC, Enduring Ventures TY Partnership, LLC, (the EV Defendants) and Bond Financial Technologies Holdings, LLC, the companies that allegedly purchased Scribe’s assets.

The WARN Act generally requires covered employers to provide 60 days' notice before conducting a plant closing or mass layoff. Employees who prevail on WARN Act claims may recover back pay and related benefits for the period of the violation.

Was Scribe a covered employer? A central dispute in the case is whether Scribe qualified as an "employer" covered by the WARN Act at the time of the layoffs. Bond argued that Scribe had fewer than 100 qualifying full-time employees, placing it outside the law's coverage. Court records showed Scribe employed 110 full-time workers as of March 25, 2023, the relevant date for determining coverage. However, after excluding workers who had been employed for less than six months, the number dropped to 88.

The employees countered that Scribe still met an alternative WARN Act threshold covering businesses with at least 100 employees who collectively work 4,000 or more hours per week. They submitted declarations stating that full-time salaried employees were expected to work at least 40 hours weekly and that similar expectations applied across the workforce. Judge Ezra found that evidence created a factual dispute that could not be resolved without further proceedings. As a result, he denied the employees' request for summary judgment against Scribe.

The judge then turned to claims against Bond, which the employees alleged became responsible for Scribe's WARN Act obligations after acquiring company assets. The employees argued that Bond continued operating aspects of the business and should be treated as a successor entity. Bond maintained that it merely purchased certain foreclosed assets, did not assume Scribe's liabilities, and played no role in the May 2023 layoffs.

Bond not liable as purchaser. Judge Ezra agreed with Bond on that issue. The court noted that the foreclosure asset sale did not become effective until August 25, 2023, roughly three months after the layoffs at issue. The employees also pointed to a Master Services Agreement that took effect July 7, 2023, but the court observed that it too postdated the terminations. Because the layoffs occurred before either transaction took effect, the employees failed to raise a material factual dispute that Bond was liable as a purchaser under the WARN Act, the court concluded, determining that Bond was entitled to summary judgment on the employees’ purchaser liability-premised claim.

Not liable under successor liability either. The court also rejected the employees' effort to impose liability on Bond under a federal common-law successor-liability theory. Citing a recent Western District of Texas decision, Judge Ezra wrote that courts have not applied that doctrine to WARN Act claims and that doing so in the context of bankruptcy and asset sales could create significant economic and legal complications. The court specifically referenced concerns about impacts on competing creditors, the value of bankruptcy assets, and uncertainty regarding how much of a debtor's business a purchaser must acquire before successor liability would attach.

As a result, Judge Ezra dismissed with prejudice all WARN Act claims against Bond premised on purchaser liability and common-law successor liability. The court also declared Bond's motion to strike certain evidence moot.

However, this ruling does not end the litigation. The employees' WARN Act claims against Scribe remain pending because the court found unresolved factual questions about whether the company met the statute's definition of a covered employer. That issue, along with any remaining elements of the WARN Act claim, would need to be resolved through further proceedings or at trial unless the parties reach a settlement.

The case is No. 1:23-cv-00647-DAE.

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