Opinion ID: 785066
Heading Depth: 3
Heading Rank: 3

Heading: Faltering company exception

Text: 58 The Code of Federal Regulations, at 20 C.F.R. § 639.9(a), outlines the requirements for the faltering company exception. It first notes that the exception applies to plant closings but not to mass layoffs and should be narrowly construed. Id. It goes on to provide that the exception generally allows for reduced notice to employees where (1) the employer was actively seeking capital at the time that sixty-day notice would have been required; (2) there was a realistic opportunity to obtain the financing sought; (3) the financing would have been sufficient, if obtained, to enable the employer to keep the facility open for a reasonable period of time; and — most critically here: 59 (4) The employer reasonably and in good faith ... believed that giving the required notice would have precluded the employer from obtaining the needed capital or business. The employer must be able to objectively demonstrate that it reasonably thought that a potential customer or source of financing would have been unwilling to provide the new business or capital if notice were given, that is, if the employees, customers, or the public were aware that the facility, operating unit, or site might have to close. This condition may be satisfied if the employer can show that the financing or business source would not choose to do business with a troubled company or with a company whose workforce would be looking for other jobs. 60 Id. § 639.9(a)(4). 61 Appellants seek to qualify for this faltering company exception because they were in the process of seeking a line of credit from U.S. Bank. However, even assuming that there was a realistic opportunity to obtain such financing, and that the financing, if obtained, would have enabled them to avoid or postpone the closure of the mill, appellants provided no evidence that they reasonably and in good faith believed that giving the sixty-day notice to their employees during the negotiations with U.S. Bank would have precluded them from obtaining the credit from the bank. The district court's ruling that the faltering company exception does not apply in this case was not in error, and is hereby affirmed.