[Congressional Record Volume 140, Number 35 (Thursday, March 24, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
      WORKER ADJUSTMENT AND RETRAINING NOTIFICATION AMENDMENTS ACT

  Mr. CONRAD. Mr. President, I understand that S. 1969, the Worker 
Adjustment and Retraining Notification Amendments Act introduced 
earlier today by Senator Metzenbaum is at the desk.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. CONRAD. I ask for its first reading.
  The PRESIDING OFFICER. The clerk will read the bill by title.
  The legislative clerk read as follows:

       A bill (S. 1969) to amend the Worker Adjustment and 
     Retraining Notification Act to minimize the adverse effects 
     of employment dislocation, and for other purposes.

  Mr. CONRAD. Mr. President, I now ask for its second reading.
  Mr. DOMENICI. I object.
  The PRESIDING OFFICER. Objection is heard. The bill will lay over and 
will receive its second reading on the next legislative day.


    the worker adjustment and retraining notification amendments act

  Mr. METZENBAUM. Mr. President, today I rise to introduce the Worker 
Adjustment and Retraining Notification Amendments Act. This legislation 
amends our Federal plant closing notice law--also known as the WARN 
Act--to address serious problems in coverage, compliance, and 
enforcement.
  This legislation is a companion to the Reemployment Act I introduced 
on behalf of the Clinton administration earlier this week. Just as WARN 
was originally enacted to ensure the success of our current Federal 
dislocated worker program, we need to strengthen the WARN Act today to 
ensure that the Reemployment Act can successfully serve our workforce 
in the years to come.
  I authored the original plant closing law and our current dislocated 
worker program 6 years ago in an effort to minimize the devastating 
impact of job losses on workers, their families, and their communities. 
Of course, the best solution to this problem is to keep layoffs and 
plant closings from occurring in the first place. We need a strong jobs 
policy to keep our manufacturing base healthy, and to create and 
preserve American jobs.
  But invariably, there will be businesses that are forced to downsize 
or shut down altogether, regardless of the state of the economy. We 
cannot prevent businesses from making those decisions. But we can 
require employers to give workers and communities fair warning of 
layoffs, so they can plan for the transition, keep their dignity, and 
start new lives. That's just what WARN was intended to do.
  The link between an effective advance notice law, and a successful 
dislocated worker program, is indisputable. Government agencies, 
academics, businesses and workers all agree that when workers and local 
communities receive advance notice, dislocated worker programs work 
better, participation rates are substantially higher, more workers get 
jobs sooner, and unemployment compensation claims are lower. In short, 
everybody wins.
  For example, the General Accounting Office has reported that:

   far more workers seek assistance when help is available before or at 
the time of job loss than when it is available only after the workers 
have lost their jobs or benefits

  Moreover, as the Clinton administration has recognized,

       [e]xperience over the years has consistently shown that 
     early assistance, particularly assistance prior to actual 
     termination/layoff, reduces the period of unemployment 
     experienced by the workers.

  By getting dislocated workers back to work faster, the Office of 
Technology Assessment says, advance notice can save hundreds of 
millions of dollars in unemployment compensation benefits each year.
  Six years have passed since WARN's enactment, and it is time to see 
how well the legislation has worked. First, let's remember what the 
Act's opponents predicated during Senate debates in 1987 and 1988. 
Senator Hatch repeatedly claimed that WARN would ``stifle job growth 
and foster high rates of unemployment.'' He also asserted that it would 
damage U.S. competitiveness abroad. In his view, ``mandatory notice 
requirements hurt employees far more than they help employees.''
  Similarly, Senator Thurmond stated that the Act would ``create 
industrial paralysis.'' Senator Gramm asserted that WARN would 
``produce fewer jobs, less growth, and lower wages.'' President Reagan 
called it a ``ticking time bomb.''
  Well, here we are 6 years later. Hundreds of thousands of American 
workers have benefited from the WARN Act by receiving 60 days' advance 
notice of layoffs. According to the U.S. General Accounting Office, 
employers are now about twice as likely to give workers advance notice 
of a layoff as they were before WARN was enacted. And guess what--the 
Act has had no negative impact at all on employment or our 
competitiveness.
  The business community claimed that WARN Act compliance would cost 
each employer $15,000 per year. In reality, this estimate was wildly 
inflated. Last year, the GAO found that:

       [d]espite predictions that providing advance notice to 
     workers would be costly, 61 percent of the employers who 
     filed notices reported that they experienced little or no 
     costs ($500 or less [per employer]).

  The WARN Act's opponents also claimed that businesses would be denied 
credit if they announced an imminent layoff or plant closing. It didn't 
happen. They claimed there would be an onslaught of employee sabotage. 
It didn't happen. They claimed businesses would lose customers. It 
didn't happen. They claimed businesses would be forced into bankruptcy. 
It didn't happen.
  In short, western civilization has not collapsed, as some in the 
business community predicated. The sun still comes up in the morning. 
America's employers are still perfectly capable of running their 
businesses as they see fit. And most importantly, hundreds of thousands 
of workers, as well as their families and communities, have had the 
benefit of 60 days' notice of layoffs and plant closings.

  In fact, the GAO reports that roughly half of the employers that 
provided advance notice believed workers were able to find new 
employment faster as a result. As a Texas State government official has 
explained, ``most employers view the WARN Act as a benefit, because 
they are as interested as anyone in seeing their employees put back to 
work as soon as possible.'' The Clinton administration has also 
recognized that providing advance notice is good for business: ``By 
getting laid off workers reemployed sooner, WARN may reduce the 
unemployment insurance costs for employers and create community good 
will.''
  Most importantly, workers have used the 60 days to seek new 
employment, enroll in training programs, pay off their bills, and, if 
necessary, plan for harder times. For many of these workers, WARN meant 
the difference between making a successful transition to new career and 
losing everything they had. Take Tamala Thackston, for example.
  Thackston worked for the U.S. Shoe Corporation in Ripley, OH for 17 
years, until the company told her it would shut down the plant in 60 
days. The company also notified the State, which sent a rapid response 
team in to help Thackston and the other workers evaluate their 
individual job counseling and retraining needs. Thackston helped set up 
a labor-management committee and a job fair. After considering her 
options, she promptly enrolled in a medical assistant training course, 
which began shortly after her termination. Without 60 days' notice, she 
could not have signed up for the course in advance, and her 
unemployment benefits would have run out before completing the course. 
Thackston graduated 6 months later, and began a new job as a medical 
assistant in New Richmond, OH the very next day.
  Thousands of employers have also provided notice to State and local 
governments, allowing rapid response efforts that help workers find new 
jobs. Last year, a Texas State official described WARN's ``tremendous 
benefit'' to state dislocated worker units:

       With adherence to the WARN Act, our State dislocated worker 
     unit is able to establish a relationship with company 
     officials and employee representatives, is able to work with 
     the local service providers to plan budgets, survey those to 
     be dislocated, gather support from other community service 
     agencies. . . . Responsiveness is a critical factor; all 
     [employers giving WARN Act notices] are contacted within 48 
     hours, with most formal on-site meetings held within 5 to 7 
     working days. . . . This translates into quicker reentry into 
     the job market, lessened unemployment insurance claims, 
     savings in social service programs such as AFDC, and Food 
     Stamps, and creates an environment where the negative impact 
     to employees and employers is lessened when possible. Without 
     [WARN Act] compliance, we open the morning newspaper and 
learn of another 1,100 people who have been laid off without notice, 
without hope, and without the knowledge to access the title III 
(dislocated worker) program.

  Clearly, the WARN Act has lived up to its promise in helping workers 
and communities cope with the staggering consequences of plant closings 
and layoffs, without causing hardship to American businesses. But 
unfortunately, all of the news is not so rosy. In its 1993 report on 
the WARN Act, the GAO found major problems with the plant closing law 
in terms of coverage, compliance, and enforcement.
  First, although hundreds of thousands of workers have been well 
served by the WARN Act, an even larger number of workers who lost their 
jobs in mass layoffs were not protected by WARN because of its 
threshold requirements. The GAO found that 64 percent of the mass 
layoffs recorded in a 2-year period were not covered by the Act. Even 
among layoffs affecting 250 or more workers, 41 percent were exempt 
from WARN. In many cases, employers appear to have intentionally 
manipulated workforce reductions to evade the WARN Act's requirements. 
As one management attorney in Detroit put it to a conference of 
employers, the WARN Act's thresholds are so big you could put aircraft 
carriers through them.
  According to the GAO, WARN's current threshold requirements--which 
trigger the Act's advance notice provisions--present a number of 
problems. First, they leave millions of vulnerable workers unprotected 
from sudden termination. Second, they present too many opportunities 
for employers to avoid WARN Act liability by manipulating their 
downsizing efforts. Third, the complexity of these requirements makes 
it hard for workers to know whether they are covered, particularly at 
worksites where the workers are unorganized.
  In a 1992 survey by Northeastern University Professor John Portz, 
state dislocated worker unit officials recognized these coverage 
loopholes as one of the most significant reasons for the limited 
effectiveness of the WARN Act. Similarly, in a 1992 report on the EDWAA 
dislocated worker program, the Department of Labor noted state 
officials' concern that ``important layoffs were not covered by WARN, 
including large layoffs of less than one-third of the workforce.'' The 
legislation I am introducing today lowers and simplifies the WARN Act's 
thresholds to ensure adequate coverage of plant closings and mass 
layoffs.
  Second, employer compliance with the WARN Act has been extremely low. 
According to the GAO, two-thirds of the employers covered by the Act 
either failed to provide advance notice (54 percent) or provided less 
than 60 days' advance notice (13 percent). Only one-third of the 
covered employers were found to have provided 60 days' notice to 
workers and communities as required by the Act. Similarly high rates of 
noncompliance were reported in the 1992 Portz Survey of State 
dislocated worker officials, as well as individually by State officials 
in New York, Texas, and Massachusetts.

  These compliance problems are closely linked to a third deficiency in 
the WARN Act--a weak enforcement mechanism. When Congress enacted WARN 
in 1988, it did not assign any Federal or State agency the 
responsibility for administering or enforcing the Act. Congress did 
give workers the right to sue to enforce their rights, but remedies 
were limited to 60 days' back pay. As the Clinton administration has 
recognized, ``the enforcement provisions of the law have not been 
adequate''.
  In the 1992 Portz Survey, State officials agreed that private actions 
were inadequate as the sole mechanism for enforcement, and that the 
existing remedy--60 days' back pay--was too weak. Similarly, the 1991 
Massachusetts Conference Report on WARN explained that

       Enforcement through the courts by workers being required to 
     bring suit is not adequate. Workers do not have the means to 
     sue in many cases; damages are inadequate; judgment takes too 
     long and compensation comes long after the time it is 
     needed--when the person is laid off.

  The GAO's data suggest that there have been over 10,000 violations of 
the WARN Act since its enactment, but the vast majority of these 
violations have gone unenforced. Since 1988, only about 100 lawsuits 
have been filed under the Act, representing a staggeringly low 
enforcement rate of about 1 percent.
  Those evaluating the effectiveness of the WARN Act--the GAO, the 1992 
Portz Survey of state officials, the 1991 Massachusetts Conference on 
WARN--have all concluded that Congress should give the Department of 
Labor authority to enforce the WARN Act. Thus, the legislation I am 
introducing today authorizes DOL to investigate complaints of WARN Act 
violations, and to file lawsuits on behalf of workers. This enforcement 
mechanism will serve as a strong complement to the existing private 
right of action: it will increase awareness of the Act's requirements 
among employers and workers, assist workers in determining whether 
their rights have been violated, and serve workers who are unable to 
find or afford an attorney to enforce their rights.
  The GAO, State officials and commentators have also pointed to the 
Act's limited remedies as a significant cause of the WARN Act's 
compliance and enforcement problems. The problems are two-fold. First, 
for many employers, the remedy of 60 days' back pay is an insufficient 
deterrent to violating the Act; all the employer risks is having to pay 
the same wages it would have paid anyway if it had given adequate 
notice. Second, experience has shown that this remedy is an 
insufficient incentive for workers to bring suit to enforce the Act. 
State officials--in the 1992 Portz Survey, the 1991 Massachusetts 
Conference Report, and congressional testimony--have uniformly 
recommended that Congress strengthen the remedies available for WARN 
Act violations, to provide a stronger deterrent to employer violations, 
and to encourage workers to enforce the Act through private lawsuits.

  The bill thus allows prevailing plaintiffs to recover, in addition to 
the existing remedies, interest and liquidated damages in an amount 
equal to the back pay award. These additional remedies have been 
available for decades under a host of comparable Federal labor laws, 
such as the Fair Labor Standards Act, the Family and Medical Leave Act, 
and the Age Discrimination in Employment Act. Under the Fair Labor 
Standards Act, for example, employers found guilty of minimum wage or 
overtime violations are liable for liquidated damages equal to the 
amount of back pay owed, unless good faith and reasonableness are 
shown.
  The legislation I am introducing today includes a number of 
additional modifications to strengthen the Act. These changes include a 
longer notice period of 90 days for larger layoffs of 100 or more 
workers, clarification of the Act's ``good faith'' defense, a notice 
posting requirement to inform workers of their WARN rights, and a 2-
year statute of limitations.
  These various modifications address the current deficiencies in the 
WARN Act, and fulfill the Act's original promise of ensuring that 
workers and communities receive advance notice of plant closings and 
layoffs. Of course, employers cannot provide advance notice in every 
instance. Even with these modifications, however, an employer may still 
be exempt from the WARN Act if (1) the layoff lasts less than 6 months, 
(2) the layoff results from the termination of a time-specific contract 
or project, (3) the employer was seeking capital or new business to 
avert the layoff, (4) the layoff results from unforeseen business 
circumstances, or (5) the layoff is caused by a natural disaster. These 
provisions guarantee employers the flexibility to respond to changing 
circumstances, while meeting the needs of workers and communities for 
advance notice where feasible.
  In sum, the WARN Act's fundamental premise--that workers and local 
communities benefit substantially from reasonable advance notice of 
plant closings and layoffs--is just as sound today as it was 6 years 
ago. In fact, American workers need the WARN Act's protections even 
more today than they did then.
  According to the Bureau of Labor Statistics, over 15 million workers 
lost their jobs between 1987 and 1992 due to plant closings, business 
failures, layoffs and production slow-downs. In a 1992 survey of 
businesses by the American Management Association, 25 percent of the 
respondents planned to cut their work forces further. And relocation of 
U.S. factories overseas--spurred on by the passage of NAFTA--could mean 
the elimination of hundreds of thousands of additional U.S. jobs in the 
near future.
  We must move swiftly to enact these modest reforms, to provide 
American workers fair notice of layoffs and plant closings, and to 
ensure the success of the administration's Reemployment Act. I urge my 
colleagues to cosponsor the Worker Adjustment and Retraining 
Notification Amendments Act. I ask unanimous consent that a summary and 
explanation of the bill's provisions appear in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   The Worker Adjustment and Retraining Notification Amendments Act 
                 Summary and Explanation of Provisions

       The WARN Amendments Act strengthens the original WARN Act 
     based on, and consistent with, the findings and 
     recommendations of the General Accounting Office (1993 
     Report); the Bureau of Labor Statistics; Northeastern 
     University's State Dislocated Worker Unit Survey (1992); the 
     Massachusetts Conference Report on WARN (1991); the Sugar Law 
     Center for Economic and Social Justice; and congressional 
     testimony from state officials and worker representatives.


                        i. summary of provisions

                              A. Coverage

       1. Drop ``employer'' threshold from 100 workers to 50.
       2. Drop ``plant closing'' threshold from 50 to 25; drop 
     ``layoff'' threshold from 50/one-third of workforce, or 500, 
     to flat 25.
       3. Limit ``single site'' requirement to layoffs of under 
     100.
       4. Clarify ``ninety-day rule'' to allow aggregation of 
     layoffs and plant closings which are part of single reduction 
     in force.
       5. Cover part-time workers.

                               B. Notice

       1. Modify 60-day notice requirement as follows: 25-49 
     workers affected, 30 days. 50-99 workers affected, 60 days. 
     100 or more workers affected, 90 days.
       2. Provide for notice to each affected employee regardless 
     of whether worksite is organized.

                             C. Enforcement

       1. Authorize DOL to investigate complaints and bring 
     enforcement suits.
       2. Expand remedies from 60 days' back pay to include 
     liquidated damages (comparable to FLSA/Family Leave/ADEA 
     remedies).
       3. Clarify Congress' intent that ``good faith'' exception 
     arises only at remedy state after a finding of liability.

                            D. Housekeeping

       1. Provide for posting of notice of WARN rights in 
     workplace.
       2. Add 2-year statute of limitations.


                     ii. explanation of provisions

                              A. Coverage

       When Congress enacted WARN in 1988, it established a 
     federal labor policy that workers affected by mass layoffs 
     and plant closings should receive advance notice that they 
     are going to lose their jobs. Balancing this federal policy 
     with employers' need for flexibility, Congress limited the 
     scope of the Act to layoffs and plant closings affecting 50 
     or more workers. A number of additional threshold 
     requirements were also included in the legislation.
       Although hundreds of thousands of workers have been well 
     served by the WARN Act, an even larger number of workers who 
     lost their jobs in mass layoffs were not protected by WARN 
     because of these threshold requirements. In a study released 
     last year, the U.S. General Accounting Office found that 64 
     percent of the mass layoffs recorded in a two-year period 
     were not covered by the Act. Even among layoffs affecting 250 
     or more workers, 41% were exempt from WARN. In many cases, 
     employers appear to have intentionally manipulated workforce 
     reductions to evade the WARN Act's advance notice provisions.
       According to the GAO, the Act's current threshold 
     requirements present a number of problems. First, they leave 
     millions of vulnerable workers unprotected from sudden 
     termination. Second, they present too many opportunities for 
     employers to avoid their WARN Act obligations by manipulating 
     their downsizing efforts. Third, the complexity of these 
     requirements makes it hard for workers to know whether they 
     are covered, particularly at worksites where the workers are 
     unorganized.
       In a 1992 Survey by Northeastern University Professor John 
     Portz, state dislocated worker unit officials recognized 
     these coverage loopholes as one of the most significant 
     reasons for the limited effectiveness of the WARN Act. 
     Similarly, in a 1992 report on the EDWAA dislocated worker 
     program, the Department of Labor noted state officials' 
     concern that ``important layoffs were not covered by WARN, 
     including large layoffs of less than one-third of the 
     workforce.'' The bill lowers and simplifies the WARN Act's 
     thresholds to ensure adequate coverage of plant closings and 
     mass layoffs.
       1. Employer Threshold. Currently, WARN exempts employers 
     with fewer than 100 employees--a threshold which exempts 
     about 98% of American businesses. Whole industries are 
     exempted under this 100-employee threshold--the apparel 
     industry, for example, averages just 52 workers at each 
     factory.
       In the 1992 Portz Survey, state dislocated worker unit 
     officials were asked how the Act's effectiveness might be 
     improved. Among the four most frequent responses was 
     expanding the employer threshold to cover businesses with 50 
     or more employees.
       In congressional testimony last year, dislocated worker 
     program officials in Texas also expressed support for 
     expanding coverage to companies with 50 or more employees. 
     Similarly, in a 1991 Massachusetts Conference Report on WARN, 
     ninety-seven percent of the conferees reported that the 100-
     employees threshold should be reduced.
       The bill lowers the employer threshold to 50 employees.
       2. Plant Closing and Layoff Thresholds. The WARN Act 
     currently covers plant closings that effect 50 or more 
     workers. Mass layoffs are covered if either (1) 50 or more 
     workers are affected, comprising at least one-third of the 
     workforce at that site, or (2) 500 or more workers are 
     affected.
       These thresholds have, in practice, proved both unfair and 
     overly complicated. Thousands of workers have lost their jobs 
     with little or no notice despite being part of a corporate 
     reduction in force planned months in advance. In many cases, 
     employers have manipulated layoffs to make sure they fell 
     below these thresholds. According to GAO, employers have 
     found it relatively easy to evade their WARN Act obligations.
       The ``one-third rule'' is responsible for much of the 
     problem. In GAO's study, thousands of mass layoffs were not 
     covered by WARN, and three quarters of these were exempt 
     under the one-third rule. Many employers have structured 
     layoffs so that they comprise less than one-third of the 
     workforce. In addition, because of the one-third rule workers 
     are often uncertain about the Act's applicability, and unable 
     to determine (short of filing a lawsuit) whether they were in 
     fact protected by the Act.
       Moreover, while the WARN Act's other threshold requirements 
     provide relief to smaller businesses, the ``one-third rule'' 
     has in practice served a contrary function: the bigger an 
     employer is, the more likely it is that a layoff of between 
     50 and 499 workers will not constitute one-third of the 
     workforce.
       For example, Smith Corona terminated one thousand workers 
     at its Cortland, New York typewriter assembly plant, in 
     groups ranging between 100 and 350 workers. Supervisors knew 
     of the layoffs ahead of time, but were told to keep quiet, so 
     they repeatedly told the workers their jobs were safe. By 
     spreading these layoffs over several months, and ensuring 
     that each layoff did not represent one-third or more of the 
     plant's workforce, Smith Corona was able to avoid its WARN 
     Act obligations.
       Gary and Evelyn Allen were among those hard hit by the 
     sudden announcements. Both had worked for Smith Corona for 
     almost five years. With no notice, the Allens' sudden job 
     loss was, in their words, ``like getting hit with a ton of 
     bricks.'' The Allens had no savings, and were forced to take 
     low-paying custodial jobs with no health benefits to make 
     ends meet. Many of their co-workers were less fortunate; 
     some families were devastated by the sudden layoffs, 
     losing their homes, cars, and health insurance. Some 
     marriages fell apart because of financial stress.
       The bill eliminates the ``one-third rule'' and establishes 
     a flat threshold of twenty-five workers for both plant 
     closings and layoffs. this provision simplifies WARN, makes 
     manipulation of layoffs to avoid the Act more difficult, and 
     ensures that advance notice is provided to workers affected 
     by corporate reductions in force.
       3. Single Site Requirement. Under the existing WARN Act, 
     plant closing and layoff thresholds are determined on a 
     worksite-by-worksite basis. This ``single site'' requirement 
     allows employers to lay off thousands of workers without 
     notice, if they are dispersed among numerous sites and fewer 
     than 50 workers are laid off at each site.
       Bill Tomko's experience is illustrative. Tomko had worked 
     for Emery Worldwide Delivery for ten years when he and his 
     co-workers at the company's Pittsburgh terminal were fired on 
     the spot and given 20 minutes to leave the premises. They 
     collected their belongings and were escorted out by security 
     guards. As it turned out, Emery had gradually reduced 
     staffing at its many terminals to 49 workers or less, to take 
     advantage of the Act's ``single site'' requirement and evade 
     its WARN Act obligations. For their years of loyalty to the 
     company, these workers got no notice and no severance. Even 
     worse, independent contractors were brought in the next day 
     to work for lower wages and no benefits.
       With no advance notice of his layoff, Tomko lost his health 
     benefits, and his apartment, and had only 3 months' 
     continuous employment in the ensuing two years. Other 
     affected workers suffered similar difficulties. As Tomko 
     explained in congressional testimony last year, the toughest 
     thing about losing their jobs was the lack of notice-- ``it 
     was like someone had taken a gun to our heads.''
       Other companies have taken similar advantage of the 
     ``single site'' requirement. For example, Jim Walter 
     Resources laid off 640 people in its western Alabama mines in 
     April, 1992, but escaped its WARN Act obligations because 
     each of the mines was deemed to be a separate worksite. The 
     bill amends the Act to eliminate the ``single site'' 
     requirement for major plant closings and layoffs affecting 
     100 or more workers.
       4. 90-Day Aggregation Rule. Although the ``mass layoff'' 
     threshold (50 workers/one-third of workforce, or 500 workers) 
     is normally calculated based on a 30-day period, the Act also 
     contains a provision allowing the aggregation of multiple 
     layoffs within a 90-day period to reach the mass layoff 
     threshold. Under Section 3(d), a ``mass layoff'' has 
     occurred if two layoffs under the threshold occur within a 
     90-day period, and the total laid off during that period 
     meets the threshold, unless the layoffs were unrelated. 
     But because of a drafting oversight in the law, if one of 
     the groups meets the threshold by itself, only that group 
     is protected and the smaller group is not.
       Many employers have taken advantage of this drafting 
     oversight to evade their WARN Act obligations. For example, 
     Maxim, Inc. laid off 24 workers on November 1, 1989 and 64 
     more workers on December 15. A federal court held that the 64 
     workers were protected by the Act, but in the absence of two 
     layoffs below the 50-worker threshold, it refused to apply 
     the 90-day aggregation rule to protect the other 24 workers.
       Similarly, Kayser-Roth Hosiery summarily laid off 159 
     workers (less than one-third of its workforce) in May, 1989, 
     and 340 workers (more than one-third) 39 days later. The 
     Sixth Circuit Court of Appeals held that the group of 340 was 
     entitled to 60 days' notice. But the court refused to apply 
     the 90-day aggregation rule to the earlier layoff of 159 
     workers, because only one of the two layoffs fell under the 
     threshold.
       The 1991 Massachusetts Conference Report on WARN 
     recommended that Congress clarify the 90-day aggregation rule 
     to serve its intended purpose. The bill makes clear that all 
     layoffs within a 90-day period (whether above or below 
     threshold levels) may be aggregated to establish a total 
     number of layoffs above the appropriate threshold.
       5. Part-Time Workers. The Act currently excludes part-time 
     employees from its protections. However, these workers are no 
     less deserving of advance notice of a layoff than full-time 
     employees. In fact, part-time workers typically need advance 
     notice even more than full-time workers.
       According to the Bureau of Labor Statistics, the part-time 
     workforce is 22 million strong today and growing. On average, 
     part-time workers earn 62 cents for every dollar earned by 
     full-time workers, leaving many of their families below the 
     poverty line. Sixty-five percent of full-time workers have 
     employer-provided health care benefits, as compared to only 
     fifteen percent of part-time workers. Nearly half of all 
     full-time workers get pension benefits from their employer, 
     as compared to only ten percent of part-time workers.
       In addition, part-time workers typically have little 
     savings and few assets to get them through a period of 
     unemployment. Nor can they look to their government for 
     financial assistance: the majority of states do not provide 
     unemployment benefits to part-time workers.
       By excluding part-time workers, the WARN Act fails 
     to protect some of our most vulnerable workers from the 
     indignities and economic hardships that accompany the 
     sudden loss of a job. As more and more employers eliminate 
     full-time jobs and hire part-timers at low wages with no 
     benefits, fewer and fewer workers will be protected by the 
     WARN Act. The bill amends the Act to cover part-time 
     workers.
       6. Remaining Exceptions. These various modifications close 
     the coverage gaps in the existing WARN Act. and fulfill the 
     Act's original promise of ensuring that workers and 
     communities receive advance notice of plant closings and mass 
     layoffs. Of course, employers cannot provide advance notice 
     in every instance. Even with these modifications, however, an 
     employer may still be exempt from the WARN Act if (1) the 
     layoff lasts less than six months, (2) the layoff results 
     from the termination of a time-specific contract or project, 
     (3) the employer was seeking capital or new business to avert 
     the layoff, (4) the layoff results from unforeseen business 
     circumstances, or (5) the layoff is caused by a natural 
     disaster. These provisions guarantee employers the 
     flexibility to respond to changing circumstances, while 
     meeting the needs of workers and communities for advance 
     notice where feasible.

                               B. Notice

       Notice Period. In 1992, the Department of Labor released a 
     report on dislocated worker programs established under the 
     Economic Dislocation and Worker Adjustment Assistance Act of 
     1988 (EDWAA). In its report, DOL discussed the importance of 
     advance notice to the success of EDWAA programs. According to 
     the Department of Labor, ``virtually all states indicated 
     that 60 days' notice of a closing or layoff was not 
     sufficient'' to allow workers to find new jobs. The 
     Department also noted that states cited ``the relatively 
     short 60-day advance warning required by WARN'' as a major 
     problem in establishing labor-management committees provided 
     for under the EDWAA program.
       The Department of Labor's findings were consistent with the 
     1991 Massachusetts Conference Report on WARN; over eighty 
     percent of the conferees reported that 60 days' notice was 
     insufficient, and that WARN should require 90 days or more. 
     Similarly, a study conducted by the U.S. Office of Technology 
     Assessment concluded that two to four months' advance notice 
     is necessary to provide full adjustment assistance to 
     dislocated workers.
       The bill lengthens the required notice period from 60 to 90 
     days for plant closings and layoffs affecting 100 or more 
     workers. Recognizing employers' need for flexibility, the 
     bill retains the current 60-day notice period for plant 
     closings and layoffs which affect between 50 and 99 workers, 
     and provides for 30 days' notice where between 25 and 49 
     workers are affected. Of course, the existing exceptions for 
     unforeseeable business circumstances, faltering businesses, 
     terminations of contracts or projects, layoffs of less than 
     six months, and natural disasters will continue to relieve 
     employers from providing such notice where it is not 
     feasible.
       2. Notice to Individual Workers. Under current law, 
     employers subject to WARN's notice requirements must provide 
     notice to each individual employee affected by the planned 
     plant closing or layoff. If the affected workers are 
     organized, however, notice must only be provided to the 
     organization representing employees.
       When an employer intends to close a plant or lay off 
     workers, the affected employees should receive advance notice 
     from the employer itself. Organized workers should not be 
     deprived of this basic right under the Act simply by virtue 
     of their exercise of rights protected by the National Labor 
     Relations Act.
       In addition, where notice is given only to a labor 
     organization, part of the required notice period is lost in 
     the process of notifying individual workers. As a 
     consequence, the affected workers receive less advance notice 
     than the statutory period of 60 days. The bill provides for 
     employer notice to all affected workers regardless of their 
     status as organized or unorganized.

                             C. Enforcement

       Employer compliance with the WARN Act has been low. 
     According to GAO, two-thirds of the employers covered by the 
     Act either failed to provide advance notice (54%) or provided 
     less than 60 days' advance notice (13%). Only one-third of 
     the covered employers were found to have provided 60 days' 
     notice to workers and communities as required by the Act.
       Similarly, Northeastern University Professor John Portz 
     estimates that only 50-60% of covered employers are complying 
     with the Act. In his 1992 Survey, state officials also 
     reported that one-third of the WARN notices they received 
     gave less than 60 days' notice. In conferences and 
     congressional testimony, officials in New York, Texas, and 
     Massachusetts have also reported substantial rates of 
     employer noncompliance.
       1. Enforcement Mechanism. The compliance rate is low in 
     part because of the Act's weak enforcement mechanism. When 
     Congress enacted the WARN Act in 1988, it did not assign any 
     federal or state agency the responsibility for administering 
     or enforcing the Act. Congress did give workers the right to 
     sue to enforce their rights, but remedies were limited to 60 
     days' back pay and benefits.
       According to the data provided by the GAO and the Bureau of 
     Labor Statistics, there have been over 10,000 violations of 
     the WARN Act since its enactment. But with only about 100 
     WARN Act lawsuits on record, the vast majority of these 
     violations have gone unenforced. In short, the enforcement 
     rate for WARN Act violations is a staggering low 1%--
     meaning that the remaining 99% of employers have violated 
     the Act with no consequences. As the Clinton 
     Administration has recognized, ``the enforcement 
     provisions of the law have not been adequate''.
       State officials agree, based on Professor Portz' 1992 
     survey of 36 state dislocated worker units. When asked about 
     the limited effectiveness of the WARN Act, the three most 
     frequent explanations offered by state officials were: (1)--
     private actions are a weak mechanism for enforcement; (2) 
     loopholes in the law allow too many employers engaging in 
     mass layoffs to avoid the Act's requirements; and (3) the 
     remedy available under the Act (60 days' back pay) is too 
     weak. As one respondent observed, ``the enforcement mechanism 
     in effect makes no one responsible for this law.''
       Why has the Act's enforcement mechanism failed? In 1993, 
     Congress heard this explanation in testimony by the Sugar Law 
     Center for Economic and Social Justice, which has served as a 
     clearinghouse for information on WARN Act litigation: ``many 
     working people are deterred by: (a) the scarcity of lawyers 
     who are willing to take these cases on . . .; (b) by the 
     costs involved with litigation; (c) by the limited relief 
     afforded under the Act; and (d) by the fact that it takes 
     upwards of two years, or longer, to litigate a case in 
     court.''
       The state officials surveyed by Portz reported similar 
     reasons for the limited enforcement activity. As a 1991 
     Massachusetts Conference Report on WARN explained,
       Enforcement through the courts by workers being required to 
     bring suit is not adequate. Workers do not have the means to 
     sue in many cases; damages are inadequate; judgment takes too 
     long and compensation comes long after the time it is 
     needed--when the person is laid off.
       With no government agency responsible for WARN, both 
     workers and employees have been slow to learn of their rights 
     and responsibilities under the Act. First, as the Sugar Law 
     Center explained in congressional testimony, the Department 
     of Labor's lack of enforcement authority ``has substantially 
     impeded the ability of former employees in many situations to 
     even find out the necessary information to know whether or 
     not they have a WARN Act claim.''
       Second, many employers are uncertain about their 
     obligations under the law. Although the Department of Labor 
     has issued WARN Act regulations, in the absence of any 
     enforcement role the Department does little to educate the 
     employer community about the law. Thus, for example, the GAO 
     study found that ``many employers were unclear about or 
     unaware of some of the provisions in the law.'' Even among 
     those employers who provided advance notice, one-third 
     reported that they were unclear about or unaware of at 
     least one relevant provision of the law.
       Ultimately, these problems seriously undermine the WARN 
     Act's promise of giving workers and local communities fair 
     notice of plant closings and mass layoffs. Not surprisingly, 
     those evaluating WARN's effectiveness have universally agreed 
     that governmental enforcement of WARN is an essential reform. 
     The principal recommendation of the GAO's 1993 report, for 
     example, was that Congress consider giving the Department of 
     Labor authority to enforce the WARN Act.
       In the 1992 Portz Survey, state dislocated worker unit 
     officials were asked how the Act's effectiveness might be 
     improved. Among the two most frequent responses was amending 
     WARN to provide Department of Labor enforcement authority. 
     Similarly, dislocated worker program officials in Texas 
     testified before Congress in 1993, expressing support for DOL 
     enforcement: ``we strongly recommend, based upon State and 
     national trends of non-compliance, that enforcement of the 
     WARN Act be handled by an appropriate Federal enforcement 
     entity.'' The 1991 Massachusetts Conference Report on WARN 
     also concluded that the Department of Labor ``should be given 
     enforcement powers.''
       The bill authorizes the Department of Labor to investigate 
     complaints of WARN Act violations, and to file lawsuits on 
     behalf of workers. This enforcement mechanism will serve as a 
     strong complement to the existing private right of action: it 
     will increase awareness of the Act's requirements among 
     employers and workers, assist workers in determining whether 
     their rights have been violated, and enforce the rights of 
     those workers who are unable to find or afford an attorney to 
     bring a private action.
       2. Remedies. The GAO, state officials and commentators have 
     also pointed to WARN's limited remedies as a significant 
     cause of the Act's compliance and enforcement problems. The 
     problems are two-fold. First, for many employers, the remedy 
     of 60 days' back pay and benefits is an insufficient 
     deterrent to violating the Act; all the employer risks is 
     having to pay the same wages and benefits it would have paid 
     anyway if it had given adequate notice. Second, experience 
     has shown that this remedy is often an insufficient incentive 
     for workers to bring suit to enforce the Act.
       In the 1992 Portz survey, when asked how WARN's 
     effectiveness might be improved, state officials' most 
     frequent response was that Congress should expand available 
     remedies. The 1991 Massachusetts Conference Report likewise 
     recommended that Congress increase the remedies available 
     under the Act because the current back pay remedy ``does not 
     deter the employer from breaking the law.'' Officials from 
     the Texas dislocated worker program made similar 
     recommendations in congressional testimony.
       The bill allows prevailing plaintiffs to recover, 
     in addition to the existing remedies, liquidated damages 
     in an amount equal to the back pay award. This additional 
     remedy is provided under a host of comparable federal 
     labor laws, such as the Fair Labor Standards Act, the 
     Family and Medical Leave Act, and the Age Discrimination 
     in Employment Act. Under the Fair Labor Standards Act, for 
     example, employers guilty of minimum wage or overtime 
     violations are liable for liquidated damages equal to the 
     amount of back pay owed, unless good faith is shown.
       The bill also makes clear that prevailing plaintiffs should 
     receive an award of interest to make them whole for their 
     losses. The WARN Act specifically provides that its remedies 
     are ``in addition to, and not in lieu of'' other statutory 
     rights. Thus, WARN Act plaintiffs may recover interest under 
     section 1961 of the judicial code, 29 U.S.C. 1961, which 
     provides for such an award ``on any money judgment in a civil 
     case recovered in a district court.'' Nevertheless, numerous 
     courts have failed to award interest to prevailing plaintiffs 
     in WARN Act suits. The bill expressly provides that 
     prevailing plaintiffs in WARN Act suits should receive 
     interest on the amount of back pay awarded.
       Strengthening the available remedies will improve the Act 
     in two respects. First, there will be a stronger deterrent to 
     violations of the Act. Second, workers will be much more 
     likely to enforce the Act through private lawsuits.
       3.Good Faith Defense. Section 5(a)(4) of the WARN Act 
     provides that where an employer has violated the Act, a court 
     may ``reduce the amount of the [employer's] liability'' if 
     the employer establishes (1) that the violation was in good 
     faith and (2) that the employer had reasonable grounds for 
     believing that its conduct was not a violation of the Act. As 
     drafted, this defense clearly arises at the remedy stage of a 
     WARN Act case, only after a violation has been established. 
     As such, it serves as a basis for reducing damages, but not 
     as a defense to liability.
       Legislative history confirms congressional intent 
     underlying the Act's good faith provision. According to the 
     Senate Committee Report on the plant closing legislation, the 
     provision was ``modelled after'' a similar provision in the 
     Portal-to-Portal Act, 29 U.S.C. 260, and was to be 
     interpreted ``in accordance with the prevailing law under 
     that section.'' See S. Rep. No. 62, 100th Cong., 1st Sess. 
     (June 2, 1987) at 24-25, Legislative History, 742-43. Under 
     the Portal-to-Portal Act, the good faith defense arises only 
     as a basis for reducing liquidated damages, after a finding 
     of liability has already been made.
       Nevertheless, the good faith exception has been 
     misinterpreted by some courts as a complete defense to 
     liability. That was the result, for example, in UAW Local 
     1077 v. Shadyside Stamping Corp. (Ohio 1991), and Oil Workers 
     v. American Home Products Corp. (Indiana 1992). As a 
     consequence of these decisions, plaintiffs who had 
     established employer violations of the Act were nevertheless 
     deprived of a finding of liability, an award of costs and 
     fees, or any back pay or other monetary relief.
       This misinterpretation of the good faith defense in effect 
     rewards employers for violating the law, where they show that 
     they had ``reasonable grounds'' for believing they were in 
     compliance. It sends a chilling message to workers: even if 
     you are terminated without notice, seek to enforce your 
     federal rights, find an attorney willing to take your case, 
     and actually succeed in proving a violation of the Act months 
     or years later, you may still be deprived of even the costs 
     of bringing suit. It also discourages lawyers like Martin 
     Farrell from taking WARN cases--he took a WARN case on behalf 
     of over 100 unemployed forest mill workers, incurred 
     thousands of dollars in court costs and other expenses, 
     established a WARN violation, but was deprived of any 
     recovery of fees and costs because the court found that the 
     employer had acted in good faith. If workers are to be 
     encouraged to enforce their rights, and attorneys are to be 
     encouraged to represent them, they must at a minimum be 
     assured of recovering lost back pay and the costs of the suit 
     if they establish a violation of the Act.
       The bill makes clear that the good faith defense arises 
     only after a liability determination, and only as a basis for 
     reducing an award of liquidated damages. This clarification 
     is fully consistent with the parallel good faith provision of 
     the Portal-to-Portal Act. It is also consistent with the 
     remedial scheme of the Fair Labor Standards Act. Notably, 
     minor or inadvertent employer errors will continue to be 
     exempt under WARN Act regulations. See 20 C.F.R. 639.7(a)(4).

                            D. Housekeeping

       1. Notice Posting. One of the reasons for the limited 
     number of WARN Act lawsuits in workers' lack of familiarity 
     with the Act's protections. In testimony before Congress, the 
     Sugar Law Center reported that ``[t]he overwhelming majority 
     of the thousands of dislocated workers with whom the Center 
     has had contact had never even heard of the WARN Act before 
     they lost their jobs.'' In the 1992 Portz survey, state 
     dislocated worker units included ``lack of public knowledge 
     about WARN'' as one of the five frequent explanations for the 
     Act's limited effectiveness. Similarly, a 1991 Massachusetts 
     Conference on WARN concluded that ``[w]orkers are being 
     denied their rights due to lack of information,'' 
     recommending that a notice-posting requirement be added to 
     WARN.
       Many federal laws include posting requirements to ensure 
     that workers are adequately informed of their rights. The 
     bill includes a posting requirement similar to that currently 
     provided under federal employment laws such as Title VII of 
     the Civil Rights Act of 1964, 42 U.S.C. 2000e-10, the Family 
     and Medical Leave Act, P.L. 103-3, and the Employee Polygraph 
     Protection Act of 1988, 29 U.S.C. 2003. This requirement 
     imposes little cost on employers and will ensure that 
     employees are aware of their rights.
       2. Statute of Limitations. As enacted, WARN did not include 
     a statute of limitations to provide a time limit on the 
     filing of worker lawsuits. As a consequence, confusion has 
     prevailed among workers, employers and federal courts as to 
     an appropriate limitations period for WARN Act claims.
       In the absence of a clear statutory mandate, federal courts 
     have faced unnecessary and time-consuming litigation over the 
     issue of the appropriate limitations period for WARN Act 
     suits. Several courts have adopted limitations periods based 
     on analogous federal or state laws. Under these rulings, WARN 
     Act limitations periods have ranged from six months to six 
     years. Clearly, a uniform limitations period is needed to 
     address these conflicting decisions.
       The bill would establish a two-year limitations period for 
     the filing of WARN Act claims. This period would be 
     sufficient to enable workers to investigate possible 
     violations, seek government assistance if necessary to 
     determine whether a violation has occurred, seek and retain 
     an attorney, and prepare and file a lawsuit. This two-year 
     provision is comparable to the limitations period provided 
     under numerous other federal labor laws, such as the Fair 
     Labor Standards Act and the Family and Medical Leave Act.

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