Human Events Blog

Obama Administration asks companies to risk lawsuits by holding onto pink slips until after the election

Obama Administration asks companies to risk lawsuits by holding onto pink slips until after the election

The Budget Control Act of 2011 famously established a bipartisan congressional “Super Committee” to come up with $1.2 trillion in budget cuts over the next decade.  Alas, to the surprise of no one, the Super Committee couldn’t make even that modest commitment to fiscal restraint, so the grim machinery of “sequestration” growled to life, enforcing a series of mandatory budget cuts – which hit the military harder than any other single sector of the government.

The military employs a lot of private-sector contractors, and those contractors employ a lot of people.  They’ll have to cut tens of thousands of jobs because of sequestration, effective January 2, 2013.

There happens to be a law called the Worker Adjustment and Retraining Notification Act, dating back to 1988, which “offers protection to workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs.”

Who’s covered by this law?  “In general, employers are covered by WARN if they have 100 or more employees, not counting employees who have worked less than 6 months in the last 12 months and not counting employees who work an average of less than 20 hours a week.  Private, for-profit employers and private, nonprofit employers are covered, as are public and quasi-public entities which operate in a commercial context and are separately organized from the regular government.  Regular Federal, State, and local government entities which provide public services are not covered.”

That sounds like an accurate description of a great many defense contractors, if not the vast majority of them.  Exemptions are provided for the closure of temporary facilities, the completion of projects that were always understood to require temporary employment, and striking union workers.  None of those exemptions would apply in this case, but later in the Act there’s a provision for allowing less than 60 days’ notice due to “business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required.”

The Obama Administration decided to drive a bus through that tiny loophole, as the Department of Labor (which is as hyper-politicized as any other Department of this Administration) floated a sunny letter to employers about to get rocked by sequestration, informing them that compliance with the WARN Act isn’t really necessary.

“Questions have recently been raised as to whether the WARN Act requires Federal contractors… whose contracts may be terminated or reduced in the event of sequestration on January 2, 2013, to provide WARN Act notices 60 days before that date to their workers employed under government contracts funded from sequestrable accounts,” chirped Assistant Labor Secretary Jane Oates.  “The answer to this question is ‘no.’  In fact, to provide such notice would be inconsistent with the purpose of the WARN Act.”

(Emphasis mine.)  She goes on to explain that the “unforeseeable business circumstances exception” would apply, because “although it is currently known that sequestration may occur, it is also known that efforts are being made to avoid sequestration.”  In other words, it’s still remotely possible that the mandatory cuts might not occur, so there’s no need to advise the affected employees their jobs could disappear in 60 days.

Why is this important?  Well, you see, 60 days from January 2, 2013 is November 2, 2012.  Something very, very, very important to Barack Obama will be happening on November 6, 2012, and it would be horribly inconvenient for him if thousands of people got laid off just a few days earlier.  So it would be super helpful to our high-unemployment President if those contractors held off on pumping out pink slips until later in November, when voters will no longer be able to hold Obama or his Party accountable for triggering sequestration with their mad intransigence on fiscal restraint.

There’s just one little problem with this request from the Obama campaign auxiliaries running the Department of Labor: they don’t enforce the WARN Act.  “Enforcement of WARN requirements is through the United States district courts,” the Act stipulates.  “Workers, representatives of employees and units of local government may bring individual or class action suits.  In any suit, the court, in its discretion, may allow the prevailing party a reasonable attorney’s fee as part of the costs.”

So if these contractors help Obama get re-elected – by holding off on sending out layoff notices until, say, Christmas Eve – they could end up getting sued for hundreds of millions of dollars in federal district court.  According to a report from CNS News, Senate Republicans think up to one million jobs could be lost.  The awards from successful lawsuits on that scale would bankrupt corporations, perhaps even entire industries.  Imagine the field day that would be had by plaintiffs’ lawyers arguing over whether the sequestration cuts were “foreseeable” as of November 2.

Senators John McCain (R-AZ) and Kelly Ayotte (R-NH) noted in a press release that the Department of Labor itself has previously admitted, in writing, that it has “no administrative or enforcement responsibility” under the WARN Act, and “cannot provide specific advice or guidance with respect to individual situations.”  Well, not until Barack Obama’s re-election is threatened, anyway.  The rest of this Administration is increasingly lawless.  Why should the Labor Department miss out on all the wild frontier fun?

McCain and Ayotte continued, “The Senate Armed Services Committee has received letters from eight defense companies, all of which advise that they will have to lay off thousands – if not tens of thousands – of workers if sequestration occurs.  These Americans deserve fair warning that politics in Washington is placing their jobs in jeopardy.”

Senator James Inhofe (R-OK) was blunt about the legal jeopardy Obama’s politicized Labor Department is luring American business into: “You can’t not comply with the law.  Put yourself on the board of directors of Lockheed Martin.  If they came out with a class-action suit of a thousand dollars per employee, that would be $120 million.  You bet they’re going to send out pink slips.  And by the way, they don’t have to wait until Nov. 2.  They can send them out today if they want.”

Maybe they should include the minutes of those Super Committee meetings with the layoff notices, so their former employees understand just how high a price they’ve paid, in the name of Democrat hunger for class-warfare tax increases.

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