WITHOUT WARNING: Effects and reform of the WARN Act

Compromises diluted bill's original intent

Metzenbaum, other backers faced uphill climb in Capitol

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  • U.S. Sen. Howard Metzenbaum (D., Ohio), left, with Gov. Richard Celeste before a Senate subcommittee
hearing in 1987, played a key role in securing passage of the federal WARN Act.
    U.S. Sen. Howard Metzenbaum (D., Ohio), left, with Gov. Richard Celeste before a Senate subcommittee hearing in 1987, played a key role in securing passage of the federal WARN Act.

    WASHINGTON -- On the evening of June 30, 1987, Dan Quayle rushed out of the U.S. Senate dining room.

    Mr. Quayle, the Indiana Republican who would become vice president in 1989, had been eating his dinner salad when he heard that backers of a bill he had been assigned to kill were making changes so it would pass.

    The bill, which had been wrapped into an international trade measure, would require larger companies to notify their workers 60 days before they closed a plant or laid off most of their workers.

    Business groups, the GOP, and some Democratic senators from the South and West wanted it dead.

    Arriving on the floor of the Senate, Mr. Quayle complained that supporters of the bill were maneuvering behind his back.

    The bill's sponsor, Democrat Howard Metzenbaum of Ohio, told Mr. Quayle: "Yeah, and I've picked up three more votes."

    READ MORE: Effects and reform of the WARN Act

    A year later, Mr. Metzenbaum and his allies would get enough votes to make the Worker Adjustment and Retraining Notification Act, known as the WARN Act, a law.

    The final product, however, would be a far cry from what its supporters wanted.

    In 1985, the House of Representatives debated a bill to require 90-days notice before a shutdown or layoff affecting 50 or more employees.

    But the House defeated the bill by a five-vote margin.

    "The defeat, in a strongly Democratic House, of legislation that was such a high priority for organized labor, came as a real shock," said James Brudney, a law professor at Ohio State University who was chief counsel for the U.S. Senate subcommittee on labor from 1987 to 1992.

    Shortly before the vote, Bill Brock, a former GOP congressman who was President Ronald Reagan's secretary of labor, walked the House floor, urging members to defeat the bill so a task force could study the issue more.

    By 1987, with the number of plant closings rising, Mr. Metzenbaum and U.S. Rep. William D. Ford of Michigan introduced the bill again, this time requiring that companies give 90 to 180- days notice of plant closings or major layoffs, depending on the number of employees affected.

    The Reagan Administration, business groups, and conservative Democrats lined up to fight the bill, which was wrapped into an international trade bill.

    To mollify Democratic U.S. Sen. Lloyd Bentsen, who was worried that the mandatory notice provisions would cause President Reagan to veto the international trade bill, Mr. Metzenbaum and Sen. Edward Kennedy of Massachusetts tried to broker a compromise.

    They lowered the notice period to 90 days, exempted companies if they could show they were financially failing, and exempted firms that laid off less than one-third of their employees.

    Opponents referred to the bill as a "Marxist economist's dream" and "garbage" that "represents the worst of America."

    The backers of the bill cited a 1987 Department of Labor report that found in two of three major layoffs, workers received no notice.

    Congressman Ford questioned why anyone would oppose giving workers "a chance to prepare for the tremendous economic shock of job loss."

    To win votes, Mr. Metzenbaum compromised more. He eliminated the mandate for companies to disclose information about planned layoffs and closings, exempted smaller businesses by covering only companies with at least 100 full-time employees, and reduced the notice period from 90 to 60 days.

    In the spring of 1988, three Democrats running for president - Jesse Jackson, Al Gore, and Michael Dukakis - endorsed the bill.

    But President Reagan vetoed the international trade bill, claiming that if the WARN provisions had been in effect from 1982 to 1986, 500,000 fewer jobs would have been created.

    Ten days later, Mr. Metzenbaum introduced the same WARN Act provisions as a separate bill.

    Heated debate followed.

    "It is the concern of the American people," said Mr. Metzenbaum from the Senate well, his voice rising. "It is an indication of their fairness and their concern and their compassion and their willingness to treat workers who have given of their bodies and themselves over a period of years to give them notice when the plant is closed."

    Sen. Orrin Hatch (R., Utah) shot back, claiming the WARN Act was a "lawyers' delight bill" that only Democrats could embrace.

    "They love lawyers. They love litigation," he said.

    The Senate and House approved the bill in July, 1988, and the WARN Act became law without President Reagan's signature, the only bill to do so during his presidency.

    "Workers should be given as much notice as possible when a business is forced to resort to layoffs, or to close altogether. Compassion demands no less," President Reagan said after he allowed the WARN Act to become law. "But the federal government's mandating that businesses under virtually all conditions must give 60-days notice ... is not a proper course."

    Mr. Reagan said he allowed the bill to become law so he could gain political support for trade legislation he was seeking.

    At the time the bill was passed, Mr. Dukakis held a big lead in the polls over his GOP presidential opponent, Vice President George H.W. Bush, who would become the nation's 41st president.

    "The scuttlebutt we heard about the politics of the bill finally moving in the summer of '88 was Bush 41 really, really, really wanted that off the table for the fall election," said Greg LeRoy, who worked for a Chicago-based group that assisted activists around the nation trying to keep factories open.

    "He did not want to be the guy tagged with the label of being in the administration that wouldn't even give people enough notice to make sure they got their unemployment insurance forms filled out," Mr. LeRoy added.

    Contact Steve Eder at: seder@theblade.com or 419-304-1680.