Legal Definitions - faltering-company exception

The faltering-company exception is a provision in the Worker Adjustment and Retraining Notification Act that allows an employer to avoid giving the required 60-day notice for a plant shutdown under certain circumstances.

To qualify for the exception, the employer must meet two conditions:

1. At the time the notice was due, the employer was seeking capital or resources that would have allowed them to avoid a shutdown.
2. The employer reasonably believed that providing the notice would have prevented them from obtaining the necessary capital or resources.

For example, if a company is struggling financially and is actively seeking investors or loans to keep the business afloat, they may be able to use the faltering-company exception to avoid giving their employees 60 days' notice of a plant shutdown. However, if the company has already secured the necessary funding or resources, they would not be eligible for the exception.

The faltering-company exception is intended to provide some flexibility for struggling businesses that are trying to avoid layoffs or closures. However, it is important to note that it is not a blanket exemption and must be applied on a case-by-case basis.