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Graham, McCain: No Compensation for WARN Act Violations

Senators Lindsey Graham and John McCain are pushing back against the Obama administration’s promise to compensate contractors for legal fallout from WARN Act violations, a law requiring large companies to provide 60-day minimum notice of potential layoffs. As I wrote yesterday, the administration has urged contractors in advance of the Jan. 2 sequestration not to issue WARN notices, which would otherwise be sent just days before the presidential election. After contractors expressed concern about potential lawsuits, the OMB released a directive offering to pay for resulting legal penalties in certain situations.

Graham vowed that congress would block any attempt to reimburse contractors for WARN Act legal fallout in an interview with NRO’s Charles C.W. Cooke today:

What we have here, I suggested, is the government instructing people to violate the law, and offering to mitigate the consequences. “Yes,” Graham agreed. “It’s crazy legal analysis. We are in danger of being no longer a rule of law nation. It’s a mini-coup.” I asked how this compared to June’s unilateral imposition of the DREAM Act? “This takes the DREAM Act instinct to a new level,” the senator told me. “That was a bastardization of the law — interpreting the law outside of its intent — but this is more dangerous as it ignores what the statute actually says.”

So, what can be done? “Lockheed Martin will give into the administration and ignore the law at their peril,” Graham warned. I asked what happens if the president attempts to reimburse them? “If he tries to go through Congress, well, that’ll never happen.” And if he tries to reallocate funds? “We would shut that down. The Constitution has a balance of powers for a reason. Congressional law cannot be unilaterally discarded by the executive branch.”

Sen. McCain took a similar position, saying that he “intends to deny” any effort to compensate contractors for lawsuits.

Lockheed Martin announced earlier this week that it won’t issue the 60-day notices, and it sounds like that’s what has Graham seething in the interview. What I don’t understand is why a contractor would want to get on Graham’s (or McCain’s) bad side on this very issue. These are two of the people leading the fight to save the defense industry.

Saving defense is what the whole WARN Act debate comes down to. Of course, there are legitimate concerns that employees could be laid off without proper notice if sequestration kicks in — but the possibility of that happening is small. Obama knows Republicans will do anything in their power to protect national defense, and he knows if he wins reelection he’ll be able to use that as leverage to crack the GOP on tax hikes. Hence, the Republican focus on the WARN Act. They view it as the only leverage they have to force a fair deal out of the Democrats before the election. The Obama administration appears to have neutralized that problem by offering taxpayer-funded reimbursement to contractors in the event of lawsuits. So unless companies like Lockheed Martin reconsider, Republicans have lost a major bargaining chip to achieve a pre-election deal.



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