The Alliance of American Football (AAF), a springtime supplement to the National Football League (NFL) — which was also striving to be a “minor league” for the bigger entity — abruptly shut down in early April after eight weeks of operations and is now in bankruptcy court, listing $11.3 million in assets and $48 million in liabilities.
Its troubles may not stop there. When it ceased operations, the AAF gave virtually no advanced notice to its players or personnel, who have now filed two lawsuits against the owners, one alleging fraud and other abuses, the other a class action complaint based on violations of the WARN (Worker Adjustment and Retraining Notification) Act.
WARN requires employers to give 60 days’ notice of massive layoffs (defined in different ways but definitely applicable to the AAF). If no such warning is given, the employers can be liable for 60 days of wages and benefits to the let-go employees — as well as facing $500 a day in civil penalties.
WARN contains some loopholes regarding unforeseen circumstances and the like, but it’s a technical question whether the AAF can squeeze into one of these escape hatches. Bankruptcy may also help the league avoid the 60-days-of-wages clause.
Nonetheless, the AAF is a cautionary tale in how not to handle layoffs and operational shutdowns.