The Register Citizen (Torrington, CT)
Layoff notice law may be in line for fresh inspection
Connecticut legislators may take another look at enforcement of a federal law that requires employers to notify the state of mass layoffs, with some companies sidestepping the mandate by claiming exemptions — or simply skipping the filing of any notice at all.
Under the Workforce Adjustment and Retraining Notification Act, employers must notify the Connecticut Department of Labor at least two months in advance of mass layoffs involving at least 50 workers. The WARN Act is intended to give DOL advance warning to dispatch employment assistance to help workers search for work, and so help them avoid having to draw unemployment benefits that cost taxpayers.
DOL makes those filings public — unwelcome publicity for companies that would keep layoffs private — but the law has ample loopholes sparing companies from the reporting requirement. Companies are spared filing notice if they have less than 100 fulltime workers heading into any job action; as are those who lay off less than 50 people, or otherwise executing layoffs affecting less than a third of the workers at any single locale.
In addition to the general loopholes, companies can claim several more exemptions for not filing WARN notice, to include a “faltering company” provision that allows companies to keep layoffs secret to avoid spooking vendors or investors; and an element under which layoffs are attributed to unforeseen business circumstances, to include natural disasters. And employers can ask workers to approve in their employment contracts stipulations waiving any WARN rights, in exchange for the promise of severance pay in any layoff.
The Connecticut General Assembly’s Office of Legislative Research issued a review of the status of the WARN Act in Connecticut, with OLR reports requested by legislators often as a precursor to bills for new laws.
The Connecticut Department of Labor has no enforcement powers with respect to the WARN Act, according to department spokesperson Steve Jensen, acting solely as a coordinator of “rapid response” teams to provide services for any individuals losing their jobs in a qualifying layoff.
“We are unable to enforce any penalty provisions of WARN, due to it being a federal act,” Jensen told Hearst Connecticut Media in an email response to a query. “We are not aware of any legislative initiatives related to the act.”
The WARN Act reached its 30th anniversary this year, with the laate U.S. Sen. Howard Metzenbaum (DOhio) having shepherded the bill through Congress in 1988.
Through the first eight months of this year, Connecticut has posted 13 WARN notices, beginning with the Westportbased hedge fund Bridgewater Associates outsourcing 200 Stamford jobs in January to Genpact, representing a job transfer rather than a layoff, with the companies not disclosing whether compensation or benefits changed as a result of the change.
Since then, WARN notices have ranged from mass layoffs at Sheltonbased Hubbell’s lighting division in Newtown and Burndy division in Bethel, affecting nearly 190 workers; to Petland Discounts which cut seven jobs at its Derby and Southington locations after an April bankruptcy.
Other major bankruptcies have failed to generate WARN notices, however, notably in the past year to include Toys R Us which shut down several Connecticut locations last year in its own bankruptcy dissolution.
The federal Employment and Training Administration can fine a company up to $500 for each day an employer is found to have been in violation of the law. But under the law, the federal labor department has no other enforcement mechanism, though workers can file suit themselves in U.S. District Court to win back pay and benefits covering the extent of the violation, up to the 60day notice period as required under law.
There are local and national examples in which employees have sought to take matters into their own hands, including this month when Connecticut Public Radio reported a lawsuit against Ultimate Nutrition, a Farmington maker of supplements.
After the Greenwich-based private equity firm Round Hill Investments reached a deal last year to acquire the bankrupt maker of Necco wafers and Sky Bar and Clark candy bars, factory workers sued under the auspices of the WARN Act to get back pay covering the gap between their last day of work and the 60day notice period the law mandates. And workers received $4 million in a settlement of a WARN lawsuit brought against a predecessor company of the Greenwich buyout firm L Catterton, after its 2008 acquisition of Archway Cookies.