Proposed Legislation Aims To Ease Blow Of Layoffs

By Staff
July 7, 2009

Lawmakers from both houses of Congress recently introduced bills that would create a stricter Worker Adjustment and Retraining Notification (WARN) Act--the federal law which currently requires employers to give at least 60 days of advance notice prior to mass layoffs.

The proposed Federal Oversight, Reform, and Enforcement of the WARN act--called the "Forewarn Act"--would increase the number of employees who must receive WARN notices as well as the amount of time of advance notice to 90 days. Sen. Sherrod Brown (D-Ohio) and Reps. George Miller (D-Calif.) and John McHugh (R-N.Y.), who said they were responding to the rise in factory closings nationwide, noted in a memo from the law firm Jackson Lewis that they sought "to modernize the WARN act to fit today's economy" and to strengthen enforcement, increase penalties and close loopholes in WARN.

WARN applies to companies with more than 100 employees, and requires them to notify workers 60 days before a "mass layoff"--defined as 50 full-time employees, making up at least one-third of the staff in one location, or a layoff of more than 500 people. But there are numerous exceptions to the law: Employers do not have to give notice to employees if the layoffs were the result of a natural disaster or changes in business circumstances that weren't "reasonably forseeable."

The Forewarn Act, by contrast, would "work radical changes in WARN and impose added burdens and risks on employers facing plant closings or mass layoffs," says the Jackson Lewis memo. "The proposed amendments cast a wide net, applying to small employers and even smaller employment actions."

With layoffs becoming more common, The Wall Street Journal reports that numerous employee groups have argued that many companies are in violation of WARN. Some lawyers note that WARN caseloads have tripled in the past year.

The bill, if passed, would be good news to Clifford Lapp, a pilot who was dismissed without notice in December by USA Jet Airlines of Belleville, Michigan. Lapp claimed that his employer violated WARN and that he and his 130 colleagues are owed two months' back pay and benefits. But USA Jet argued that the layoffs were the result of unforeseen business circumstances, and earlier notice would have hindered efforts by the company to raise more money.

"Had we started looking for jobs two months earlier, the market would have been a lot better," said Lapp, who was quoted in The Journal.

Similarly, Jerry Lintz, another USA Jet pilot, was told that his job was terminated while he was on vacation with his wife and two children. "Had I been given 60 days notice," he said, "I wouldn't have spent the money on house improvements and. . .vacation."

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