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OMB: We’ll Reimburse Employers for WARN Act Fallout

The Office of Management and Budget is now promising to compensate defense contractors for any legal penalties that would stem from violating the WARN Act, a federal law that requires employers to warn employees at least 60 days in advance of mass layoffs. The Obama administration had already been urging contractors to ignore the WARN Act in the case of the looming sequestration cuts, since the 60-day-minimum would mean hundreds of thousands of employees could get notices of pending layoffs just days before the presidential election.

But it’s one thing for the Obama administration to tell contractors that they shouldn’t worry about the law. It’s quite another to promise that the cost of any resulting lawsuits will be covered by the government (read: the taxpayers):

But the Friday guidance from the Office of Management and Budget raised the stakes in the dispute, telling contractors that they would be compensated for legal costs if layoffs occur due to contract cancellations under sequestration — but only if the contractors follow the Labor guidance.

The guidance said that if plant closings or mass layoffs occur under sequestration, then “employee compensation costs for [Worker Adjustment and Retraining Notification] WARN act liability as determined by a court” would be paid for covered by the contracting federal agency.

There’s also a catch: employers have to agree to play by the “Department of Labor’s guidance” if they want any potential legal costs covered. The DOL’s guidance asks them not to send out layoff notices before the election.

That seems to have satisfied defense contractors. Today, Lockheed Martin announced it would not issue layoff notices in advance of the sequestration cuts. Where is the campaign media on this? The Obama administration just told defense contractors that taxpayers would pay for any legal penalties for not complying with a law that would have complicated Obama’s reelection campaign. Does that not warrant some scrutiny, or do we need a billionth article on Romney’s “47 percent gaffe” instead?