• John Manning, et al. v. DHP Holdings II Corp a/k/a DESA (Cayman) Holding, LLC, et al. (In re DHP Holdings II Corp, et al.)
  • June 3, 2011
  • Law Firm: Young Conaway Stargatt Taylor LLP - Wilmington Office
  • Plaintiffs representing former employees of the debtors asserted claims under the Work Adjustment and Restraining Notification Act (the “WARN Act”) against H.I.G. Capital, LLC (“HIG”), the debtors’ parent company. The plaintiffs claimed that HIG and the debtors constituted a “single employer” because they “had common ownership, directors, and officers...” Upon HIG’s motion for summary judgment, Judge Mary Walrath ruled that “[a]lthough HIG and the Debtors had common ownership, directors, and officers, the Court finds that the Debtors and HIG were not a “single employer” because HIG did not exercise de facto control over the Debtors’ termination of employees and did not share personnel policies or operations with the Debtors.” In so ruling, the Court relied upon a five-pronged litmus test promulgated by the U.S. Department of Labor under the WARN Act to determine whether HIG, as parent, should be considered a “single employer,” which test evaluates (i) common ownership, (ii) common directors and/or officers, (i i) de facto exercise of control, (iv) unity of personnel policies emanating from common source, and (v) dependency of operations.