Legal Protections for Employees in Bankruptcy

If a Company Goes Bankrupt, Do Employees Have Any Legal Recourse?

When a company goes bankrupt, it can be a complex and uncertain time for its employees. Many workers may worry about their job security, future employment prospects, and the potential loss of wages and benefits. In this situation, employees need to understand their rights and any legal recourse that may be available to them.

Legal Protections for Employees in Bankruptcy

Fortunately, federal law provides certain protections for employees in the event of company bankruptcy. The most important of these is the Worker Adjustment and Retraining Notification (WARN) Act, which requires companies with 100 or more employees to give at least 60 days' notice before a mass layoff or plant closing. This gives workers time to find new jobs and make other necessary arrangements.

Additionally, the Employee Retirement Income Security Act (ERISA) protects employees' pensions and other retirement benefits in the event of bankruptcy. Under ERISA, specific pension plans are considered "protected" and must be fully funded by the employer, even in bankruptcy.

Seeking Legal Help

In some cases, employees may have additional legal rights and recourse depending on the specific circumstances of the bankruptcy. For example, if a company has violated the terms of the WARN Act by failing to provide adequate notice of a mass layoff or plant closing, employees may be able to file a lawsuit to seek damages.

If you are an employee of a company that has gone bankrupt and are unsure of your rights, it's important to seek the advice of an experienced attorney. An attorney can help you understand your rights and options and advise you on the best course of action to take in your specific situation.

Bankruptcy Attorney Free Consultation

If you are looking for a legal advice about bankruptcy or in need an attorney, call this law firm for free consultation. We have the Best Attorneys in Utah.

Ascent Law LLC

8833 S Redwood Road Suite C

West Jordan UT 84088

(801) 676-5506

https://www.ascentlawfirm.com

Disclaimer: This is not legal advice and is simply an answer to a question and that if legal advice is sought to contact a licensed attorney in the appropriate jurisdiction.

Location: Salt Lake City, UT, USA

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