Signature Room to Pay $1.52M for WARN Act Violations

By Sonal Shah, JD, Assistant Director, Employment Law Services
Published April 23, 2024

On September 28, 2023, The Signature Room, Chicago’s iconic restaurant on the 95th floor of the former John Hancock Center, abruptly closed. Employees were notified of the closure the same day via the following memo, which they received at 6:00 a.m.

Dear Signature Room Team,

We are truly saddened of the news that – after 30 years on top of Chicago – The Signature Room is closing effective Thursday, September 28, 2023. We are extremely disappointed that new lease terms could not be successfully renegotiated with our landlord and, thus, not allowing us to continue our mission at the place we all love. As a result, we are forced to close our doors.

This an extremely difficult situation for us all, and we all share in the shock of this overwhelming news.

We appreciated your dedication and the service that you have provided to The Signature Room over the past 30 years. We simply couldn't have done it without you.

Sincerely,

Human Resources

Employees said they were shocked as they had had no indication prior to receiving the email that the restaurant was closing. Not long thereafter, the union that represented the employees filed a lawsuit alleging 132 employees were laid off in violation of the Worker Adjustment and Retraining Notification (WARN) Act. The Act requires larger private sector employers to provide at least 60 days advance written notice of certain business closures or mass layoffs. The lawsuit sought 60 days' worth of back pay, health insurance coverage, and other benefits that employees lost due to the closure. For more information on the restaurant’s closure and the requirements of the WARN Act, see our previous article.

Last month, U.S. District Judge Harry Leinenweber issued a default judgment against the restaurant’s management firm, Infusion Management Group Inc., after the company failed to respond to the lawsuit. Judge Leinenweber found the Group liable for violating the WARN Act and ordered it to pay $1.52 million in back pay and benefits to the workers.

This case is a good reminder that employers who are thinking of laying off employees, closing an office or worksite, or taking any action that detrimentally affects their employees should consider consulting legal counsel. A little time and effort on the front end could save employers a lot of time, effort, and money on the back end.

Members of HR Source should reach out to our attorneys at the HR Hotline Online or at 800-448-4584.