House Democrat vows reform of WARN Act

Panel chief plans hearings on ‘hugely ineffective’ rules

8/27/2007
BY JAMES DREW AND STEVE EDER
BLADE STAFF WRITERS
Rep. George Miller is pushing for an overhaul of the WARN Act, which he said lets firms treat workers as if they are disposable.
Rep. George Miller is pushing for an overhaul of the WARN Act, which he said lets firms treat workers as if they are disposable.

The powerful chairman of the House Education and Labor Committee said he will push to reform a 19-year-old federal law that critics say is failing to require many companies to give adequate notice to workers losing their jobs.

"There is a growing consensus that you cannot sustain an economic policy that in some part treats workers and their families as if they are disposable," U.S. Rep. George Miller (D., Calif.) told The Blade.

Mr. Miller said a bill to overhaul the Worker Adjustment Retraining and Notification Act, or WARN, will be introduced in the House of Representatives and hearings will be held.

"This law is hugely ineffective, in terms of its intent. Congress now has an opportunity to act," said Mr. Miller, who also is chairman of the committee in charge of crafting policies for the House Democrats.

Last month, a Blade investigation found that the WARN Act is so full of loopholes and flaws that employers repeatedly skirt it with little or no penalty.

READ MORE: Effects and reform of the WARN Act

In crafting the law, Congress did not give the Department of Labor enforcement power. As a result, workers must head for court to try to hold companies accountable when they don't provide the required notice.

An analysis of 226 lawsuits filed in federal court since 1989 revealed that judges threw out more than half. 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 firms that claimed they couldn't predict bad financial times ahead.

Mr. Miller, who has served in the House of Representatives since 1975, credited The Blade for the momentum in Congress to fix problems with the WARN Act.

"Sometimes in Washington, you start dealing in the abstract. Your articles put a human face on this issue," he said.

Mr. Miller said the House bill would be similar to the one introduced last month by U.S. Sen. Sherrod Brown of Ohio.

Mr. Brown's measure, dubbed the FOREWARN Act, would lengthen the notification period required before a plant closing or mass layoff, increase penalties for violators, require more companies to provide notice before layoffs, and allow the Department of Labor and state attorneys general to represent workers in lawsuits.

Key Democrats, including U.S. Sens. Hillary Clinton of New York, Barack Obama of Illinois, and John Kerry of Massachusetts, have signed on as co-sponsors of Mr. Brown's bill.

Sen. Edward Kennedy, chairman of the Senate Health, Education, Labor, and Pensions Committee, has endorsed efforts to amend the WARN Act.

A labor policy expert with the U.S. Chamber of Commerce has expressed concerns about Mr. Brown's bill, saying companies "need to make rapid decisions to meet expectations of their customers in today's market."

Other groups are assisting Democratic congressional members who want to revise the law so it provides more protection for workers.

Ross Eisenbrey, vice president and policy director of the Economic Policy Institute, a nonprofit think tank in Washington, said he hoped the House Democratic bill would make bigger changes than the one Mr. Brown has introduced.

That could include requiring companies to disclose information about planned layoffs and closings, and consult with affected workers and government officials, a proposal which was in early versions of the bills that Congress considered in the 1980s, Mr. Eisenbrey said. He was a high-ranking aide to U.S. Rep. William Ford, a Michigan Democrat who was among the first backers of what was called the "plant-closing" bill.

Ohio vows action

If Congress does not reform the WARN Act, then Ohio legislators should take action, Gov. Ted Strickland said in a recent interview.

But the first-term Democratic governor said his preference is for the federal government to amend the law.

"If they fail to act, it would be appropriate for us to look at what we might do in terms of action. But this is the kind of problem that is most appropriately dealt with nationally. Some companies are involved in multiple states, and I think these kinds of protections should be available for all employees, regardless of what part of the country they live in," he said.

Because of problems with the WARN Act, at least nine states have passed their own versions to supplement the federal law, according to the National Conference of State Legislatures and attorneys involved in labor employment law.

Supporters of amending the federal law to provide workers with more protections said Mr. Strickland's stance reflects the political realities he faces. The GOP controls both chambers of the Ohio legislature.

In New Jersey, a Democratic governor has Democratic majorities in both the House and Senate.

Lawmakers in New Jersey earlier this year sent legislation to Gov. Jon Corzine to reduce "take-the-money-and-run" plant closings by expanding the WARN Act notice period, increasing financial penalties for violators, and covering more businesses under the law.

New Jersey deadline

Mr. Corzine, a former U.S. senator, has until November to decide whether to sign the bill.

The governor believes it is necessary to add "teeth" to the notice requirements, but he also has concerns about the impact of the legislation, said Brendan Gilfillan, a spokesman for Mr. Corzine.

"One of the things we are looking at is the impact it would have on the state's competitiveness given the lack of consistent federal regulations," Mr. Gilfillan said. "That's certainly a concern for us."

New Jersey's bill would require all companies with at least 100 employees to give a 90-day notice before a plant closing or massive layoff. In addition, WARN Act offenders would be required to pay displaced employees one week of severance pay for each year they were employed with the company.

Julie Hurwitz, the former executive director of the Sugar Law Center, a Detroit-based nonprofit legal center which advocates for workers in WARN Act cases, said state-level notification laws vary widely and several states have advisory laws that businesses can ignore.

"There's a lot of inconsistency when you leave it to the states," Ms. Hurwitz said.

She said officials have long been reluctant to implement strongly worded WARN Act laws for fear of creating an unfriendly business climate.

That issue could easily be resolved by having a strong federal notice law with teeth, Ms. Hurwitz said.

Contact James Drew at:jdrew@theblade.comor 419-351-2004.