Senator Brown pushes to reform plant-closing law

Greater notice period, penalties sought; Clinton, Obama sign on

7/17/2007

WASHINGTON -- U.S. Sen. Sherrod Brown of Ohio introduced a bill last night to reform a 19-year-old federal law designed to give notice to workers losing their jobs.

Mr. Brown took action a day after a Blade investigation found the law is so full of loopholes and flaws that employers repeatedly skirt it with little or no penalty.

The Worker Adjustment Retraining and Notification Act, or WARN, requires many employers to notify workers 60 days before they close a plant or lay off dozens of employees.

Aides to two Democratic presidential candidates -- Sens. Hillary Clinton of New York and Barack Obama of Illinois -- said they planned to sign on as co-sponsors of the bill.

READ MORE: Effects and reform of the WARN Act

Mr. Brown's legislation would:

• Increase the notice period under the WARN Act from 60 days to 90 days.
• Require companies to abide by the WARN Act if 25 or more workers lose their jobs in a plant closing. The current trigger is at least 50 workers.
• Require employers to provide notice if 50 to 99 workers are laid off, and those who lose their jobs represent one-third of the full-time work force.
• Mandate notice if 100 or more workers are laid off. Currently, companies that lay off 500 or more workers must provide notice.
• Give the U.S. Department of Labor and state attorneys general authority to enforce the WARN Act.
• Increase the penalty for violating the law. Workers who did not receive a 90-day notice would receive benefits and double the amount of back pay for the 90 days. The current penalty is up to 60 days.
• Require employers to provide written notification to the Labor secretary of major layoffs and plant closings.

"Job loss does not just affect a worker, or a worker's family," said Mr. Brown, a first-term Democrat. "Job loss devastates entire communities and local economies. Under current law, fair notice has proven to be the exception, not the rule.

"This legislation will close the loopholes and provide the tools necessary for enforcement of the rules. Early warning of a layoff is no substitute for a good job, but it does provide some time for employees to find a new job and for help to be provided," Mr. Brown said in a statement.

The Blade's analysis of 226 lawsuits filed in federal court across the nation since 1989 alleging violations of the WARN Act revealed that judges threw out more than half of the cases.

In the majority of those decisions, judges cited loopholes in the law, ranging from companies that said they tried their best to give notice to employees to firms that claimed they couldn't predict bad financial times.

The newspaper found that in 108 cases, WARN Act lawsuits resulted in settlements or with the courts siding with the displaced workers.

But in dozens of those cases, workers received only pennies on the dollar of what they felt they were owed.

A veteran of the movement to provide workers with notice of plant closings and major layoffs applauded Mr. Brown's bill.

"It's long overdue," said Julie Hurwitz, former executive director of the Sugar Law Center for Economic and Social Justice - a nonprofit organization in Detroit that has focused for 16 years on WARN Act enforcement.

Ms. Hurwitz said some of Mr. Brown's proposed reforms resemble the types of amendments the Sugar Law Center began advocating for as early as 1993. Sen. Howard Metzenbaum, an Ohio Democrat and the sponsor of the WARN Act, introduced a reform bill in 1994 that did not become law. "I'm glad to see that it's back on the table and that it is no longer being buried," Ms. Hurwitz said.

An aide to Mr. Brown - a member of the Senate Committee on Health, Education, Labor, and Pensions - said he is asking fellow senators to co-sponsor his bill, dubbed the "FOREWARN Act."

The three leading Democratic presidential candidates - Ms. Clinton, Mr. Obama, and former U.S. Sen. John Edwards of North Carolina - reacted to The Blade's investigation by calling for reform of the WARN Act.

The leading GOP presidential candidates have not responded to calls seeking comment. Neither have two major foes of the "plant closing" bill in the 1980s, Republican U.S. Sen. Orrin Hatch of Utah and the U.S. Chamber of Commerce.

Tom Kummerer, who in December, 2001, unexpectedly lost his job at National Machinery Co. in Tiffin after nearly 25 years of service, said Mr. Brown's legislation is a "step in the right direction."

Mr. Kummerer said the WARN Act should be amended to force companies to provide back pay and benefits to workers before a business' assets are sold.

He also said the Department of Labor and state attorneys general should be able to represent workers in WARN Act lawsuits.

"Currently, employees are really on their own," Mr. Kummerer said. "I lived through it and I know what it's like. I don't want to see any other people have to go through that."

Ms. Hurwitz said she hopes that members of Congress will support Mr. Brown's efforts to amend the WARN Act. She also credited Mr. Brown for following in the footsteps of Mr. Metzenbaum, who sponsored the original WARN Act. He did not seek re-election in 1994.

"I am hopeful that Senator Brown will pick up the mantle that was dropped in the shadow of Senator Metzenbaum and that he will take it and run full speed ahead with it in the same way that Senator Metzenbaum so vigorously fought for the rights of workers," Ms. Hurwitz said.

Blade staff writer Steve Eder contributed to this report.