Business Should be cautious about taking the Obama Administration's advice on the WARN act.

Dan Miller's Blog ^ | October 10, 2012 | Dan Miller

[DanMiller]

Want to violate the law? Yes! Enjoy paying for advice from your attorney? NO! Then Follow the Administration's advice and just say Yes! It's no Big F***** Big deal and Somebody Else will pay. Maybe.

A legal blog that I follow has summarized and commented on the Obama Administration's "legal" advice that there is no need to comply with the WARN Act requirement that

companies with more than 100 employees to give written notice of a facility closing or mass layoff to the affected employees (and certain governmental offices) at least 60 days prior to the facility closing or layoff. Employees who have worked less than 6 months in the past 12 months and employees who work an average of less than 20 hours a week are excluded from the "more than 100 employees" calculation.

The WARN Act notice regarding a facility closing or layoff focuses on "loss of employment" which is, among other things, termination that is not voluntary, is not retirement, or is not based on "cause." Determining whether a WARN Act notice is appropriate includes identifying the number of employees to be terminated and their employment or job site location

Oh, well, it's just a silly law and President Obama is so far above our laws that nobody else need abide by them either, certainly not at their own expense and if it might be harmful to President Obama's reelection prospects.

January 2, 2013 Department of Defense Sequestration—Does the WARN Act Apply? The WARN Act and its regulations do not contain clear, unambiguous exceptions to the Act's notice requirements based on changes in available funding for Department of Defense procurement contracts for good or services. Various interpretations of possibly relevant judicial decisions also may not provide the comfort a contractor seeks.

However, earlier this year the US Department of Labor announced in its Training and Employment Guidance Letter No. 03-12, that "contractors of the DOD whose contracts may be terminated or reduced in the event of sequestration on January 2, 2013," are not required to give the 60-day WARN Act notice to employees working under such contracts. As announced by the Department of Labor, the basis of this direction to DOD contractors is that "efforts are being made to avoid sequestration" and that potential closing and layoffs resulting from DOD contract terminations or cutback "are speculative or unforeseeable."

This Department of Labor "guidance" was reinforced by a June 30, 2012 guidance letter from an Assistant Secretary at the Department of Labor. Additionally, a September 28, 2012 Executive Memorandum from the White House confirms the Department of Labor's guidance that "it is neither necessary nor appropriate for federal contractors to provide WARN Act notice to employees 60 days in advance of the potential sequestration."

The September 28 Executive Memorandum also states that if a DOD contractor follows the Guidance Letter, then "any resulting compensation costs for WARN Act liability as determined by a court, as well as attorneys' fees and other litigation costs (irrespective of litigation outcome)," which the contractor incurs "would qualify as allowable costs and be covered by the contracting agency, if otherwise reasonable and allocable."

Long story, short: You may want to dig a little deeper before making your decision about whether or not you follow the Executive Memorandum and Guidance Letter or take the more conservative approach of complying with the WARN Act.

There's uncertainty and unexplored ground in this arena. Move forward carefully, but don't overlook the November 1, 2012 notice deadline (and setting your calendar for the last week in October is probably safer). (Bold emphasis in original, italic emphases added.)

Trust the Obama Administration? Why not? President Obama would never fib, would never violate a law, would never encourage anyone else to do so and has a really clever bunch of lawyers with no political agenda -- particularly no agenda that might seek to have employees not be told (as the law requires) what is likely to happen to them after the November elections, thus frightening foolish voters away from President Obama before the elections. Afterward? No problem.

Hans Van Spakovsky, a retired Justice Department attorney, must be full of beans in writing this:

One may wonder why the White House has decided to dramatically change its interpretation of the WARN Act now. It appears that the layoffs, which are likely to occur in the wrong places (key battleground states) at the wrong time (days before an election), have prompted this change. Whatever the reason, the administration has issued an interpretation of the WARN Act that is contrary to the law. And it has told contractors that if a court finds that they violated the WARN Act, then the American taxpayers will pay all “WARN Act liability as determined by a court, as well as attorneys’ fees and other litigation costs (irrespective of litigation outcome).”

This is the ultimate abuse of the president’s executive authority: inducing federal contractors to violate federal law in order to protect the president’s reelection, and promising taxpayer funds to pay for any liability that comes from breaking the law.(Emphasis added._

Even though such free ObamaLegalGuidance is obviously right (like most other free legal advice), it might, just might, be better for affected businesses to consult their own attorneys unless they want to provide them lucrative employment at Government expense (but maybe not) for several years -- years when the Obama Administration may no longer reign supreme and may not be able to keep its promises.

It's not that as a retired attorney who spent much of his professional life advising clients how to stay out of trouble rather than get into it, I would ever object to the Obama Administration's promises to provide full employment for the foreseeable future for my brother attorneys who must still grub out meager livings. They need to put bread on their tables for their families just like everybody else, and what better way to help them to do so than with promises of Federal subsidies! If still operative. A big campaign contribution to President Obama's campaign fund may help; then again, it may not.

[DanMiller]

Of course, the Obama Administration would not even think of urging businesses to violate the law to advantage President Obama in his quest for another four years. /snark off

[G Larry]

This is WORSE than you illustrate here!

The WH has “promised” they will not issue any contract cancellations until “after 2 Jan. 2013”.

Since we no longer know “when” the cancellations will occur, there is no basis for starting the 60 day clock.

Therefore, no violation of the WARN Act.

So, it is the political manipulation at issue here, rather than any Corporate violation of a law.

[Newbomb Turk]

So if you follow the Obama advice and Romney becomes President who is gonna cover your legal fees then !