I love movies and have so many fond memories of Alamo Drafthouse in Dallas. I have a season pass, but I’m not sure when I can use it again. The last movie I saw was a special showing of Hitman. I was shocked and disheartened when all five Alamo Theaters suddenly closed in Dallas. What I loved about Alamo Drafthouse was its quirkiness and amazing employees. It was a unique place of joy that enhanced the movie-going experience.
As an employment lawyer, I know that sudden closures often viloate the federal WARN Act. The Worker Adjustment and Retraining Notification (WARN) Act is a federal law designed to protect employees by requiring large employers to provide a 60-day notice in advance of major layoffs or plant closures. The goal is to give workers time to prepare for the loss of their jobs, allowing them to seek new employment or undergo retraining.
Even if a company goes bankrupt, they still have to comply with the WARN Act. And a company with assets – like a bunch of movie theaters and real estate – often has assets to pay its fired employees. Becasue Alamo Drafthouse failed to provide the required notice, they are obligated to pay 60 days of pay and benefits to affected employees! It’s black and white. We sometimes call these laws “strict liability” statutes.
I’m a board certified Texas labor and employment lawyer, this is my analysis of why I believe that Alamo Drafthouse (or at least it’s franchisee) broke the law:
First, the WARN Act only applies to employers with 100 or more full-time workers. But according to WFAA news, there are 600 employees effected in this layoff. So clearly there were more than 100 workers at the five locations.
Second, the WARN Act requires a mass layoff affecting 50 or more employees. Again, more than 50 employees were laid off.
Third, Alamo Drafthouse doesn’t fall under an exemption – like a natural disaster or unforseeable circumstance. These theaters had been losing money. This is what makes me really mad. The owners saw this coming, and they could have prepared, but they didn’t.
Finally, Alamo Drafthouse failed to give the federally required sixty day notice. There’s no doubt about this. It seems to me that Alamo Drafthouse (or at least it’s franchisee) is guilty.
The main remedy of the WARN Act is 60 days pay. Bankruptcy is not a defense against the WARN Act and unpaid wage claims usually take priority over other claims. It’s possibly that the individual owners themselves may be liable under the Texas Fraudlent Transfer Act or if the owners weren’t following the formal rules that govern companies.
I regularly file lawsuits in federal court representing workers. I would love to represent workers of Alamo Drafthouse and Two is One, One is None, LLC who were screwed over in this layoff. My law firm allows potential clients to schedule an initial consultation by calling 214-528-6500.