RENAE MOWAT e t al.,

v.
DJSP ENTERPRISES, INC., et al.,

Excerpt:

B. Stern and DJSPA as “Employers” under Single Employer Test

Plaintiffs argue that WARN Act liability is imputed to Stern and DJSPA under the single employer test. Stern and DJSPA contend that Plaintiffs fail to sufficiently allege all the elements of the single employer test.

Two or more affiliated businesses which constitute a “single employer” may be held jointly and severally liable for violations of the WARN Act. Pearson v. Component Tech. Corp., 247 F.3d 471, 478 (3d Cir. 2001). The Department of Labor (“DOL”) regulations issued under the WARN Act provide that two or more affiliated businesses may be considered a single business enterprise for WARN Act purposes. 20 C.F.R. § 639.3(a)(2). The regulations provide a five-factor balancing test to assess whether affiliated businesses constitute a “single employer,” which would subject them to joint liability under the WARN Act. See Pearson, 247 F.3d at 478.

The five DOL factors are as follows: (1) common ownership, (2) common directors and/or officers, (3) unity of personnel policies emanating from a common source, (4) dependency of operations, and (5) de facto exercise of control. Id. at 487– 490; 20 C.F.R. § 639.3(a)(2).

Plaintiffs adequately allege the five elements of the single employer test.

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