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Ex-NLRB Counsel: Ignore WARN Act at Your Own Peril

The Obama administration is continuing to encourage employers to ignore the WARN Act, which would require them to inform employees before the presidential election that they may face layoffs due to sequestration. But a former counsel for the National Labor Relations Board and one of the crafters of the WARN Act is warning employers that they would open themselves up to worker lawsuits by ignoring the law. HuffPo reports:

But John Irving, a former National Labor Relations Board counsel who helped shape some provisions of the WARN Act, said he would tell major defense contractors to think twice about disregarding the WARN Act.

It is unlikely that the DOL guidance would hold up in court if a terminated worker sued his employer for not giving proper notice, Irving said.

In other words, defense contractors cannot fall back on the Department of Labor memo if the federal government lurches off the fiscal cliff and a laid-off employee had not received a pink slip by early November.

“It strikes me that the guidance is so far off the mark that you wonder why it’s being issued, and it’s not a regulation — it’s a sort of statement of opinion, which is coming out because of what could be the consequence,” Irving said. “It’s trying to blunt that and head it off in a way makes it look like no notice is not necessary when it may be.”

Obama’s Department of Labor must realize it’s asking defense contractors to put themselves at legal risk by asking them to ignore the law. The DOL doesn’t enforce the WARN Act; it’s enforced solely through legal challenges by employees. President Obama knows this all too well, since he personally supported stricter federal enforcement mechanisms for the WARN Act during his time in the senate.

If defense contractors don’t give 60 days notice of layoffs and sequestration kicks in as planned on Jan. 2 — not an unlikely scenario, since congress’s track record on compromising on these issues isn’t great — then employers could be hit with mass lawsuits. Tort attorneys must be salivating at the prospect.

And yet the White House isn’t backing down from the DOL’s recommendation. At a hearing before the House Armed Services Committee yesterday, White House budget chief Jeffrey Zients claimed that sending out notices would be a “waste of taxpayer resources” and cause “unnecessary uncertainty”:

Appearing before the House Armed Services Committee, White House budget chief Jeffrey Zients defended recent guidance from the Department of Labor that advises firms against sending out layoff notices as the so-called “fiscal cliff” nears. The 23-year-old WARN Act requires some employers to send out pink slips 60 days ahead of a “reasonably foreseeable” event — in this case, massive spending cuts to defense and domestic programs triggered by the failure of the budget “super committee” last fall. …

“These potential plant closings or layoffs are speculative and unforeseeable, so to give blanket notices both wastes taxpayer resources and creates unnecessary uncertainty,” Zients responded. “So clearly the companies that you just talked about need to absorb this guidance from the Department of Labor, which is very clear, and they need to make their own decisions.”

Funny, the Obama administration hasn’t seemed overly concerned with “wasting taxpayer resources” in the past. And the idea that sending out paper or electronic notices of potential layoffs would be a major drain on taxpayers is laughable.