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Hearing Examines Labor Department’s Failure to Comply with WARN Act Oversight

WASHINGTON, D.C., February 14, 2013

The Subcommittee on Workforce Protections, chaired by Rep. Tim Walberg (R-MI), today held a hearing entitled, "Sequestration: Examining Employers’ WARN Act Responsibilities." The hearing examined guidance released in July 2012 by the Department of Labor that states the WARN Act does not apply to sequestration. Members also discussed the department’s failure to fully cooperate with the committee’s oversight efforts surrounding this important issue.

For more than six months, the committee has sought documents and communications related to the controversial guidance. The department has routinely missed deadlines for producing materials. Additionally, information that has been provided is not responsive to the committee’s requests. The department provided a compact disc late last night that contains more than 400 pages of materials, denying the committee an opportunity to review the documents before today’s hearing.

Rep. Walberg and Education and the Workforce Committee Chairman John Kline (R-MN) raised with Assistant Secretary Jane Oates their concerns about the department’s ongoing pattern of obstruction:


                         

I would hope it wouldn’t take calling a subcommittee hearing in order to get information like this – 400 pages of it – the night before the hearing. Would you concur that it shouldn’t take calling a hearing to get this information that the oversight responsibilities of this committee and many other committees may be carried out?



                          

It is astonishing to me that after hours, last night an envelope with a computer disc and a post-it note with a password was slid under the door… I am just trying to imagine what that discussion was like that said, ‘Gosh, I think it would be a really good idea to take this disc, put a password on it, and let’s go over to Congress and slide it under the door.’

The committee‘s concerns were confirmed by witnesses who described the confusion and uncertainty the department’s WARN Act guidance has created.

Dianna Furchtgott-Roth, senior fellow at the Manhattan Institute, testified: "The poor economic climate makes it even more surprising that the Labor Department and the White House have asked federal contractors to break the law and not send out required WARN notices. Many contractors were expecting layoffs on January 2, and are now expecting layoffs on March 1. Some have already reduced hiring in anticipation of future spending cuts… It is the first time in history that the White House has asked firms not to file layoff notices."

Thomas Gies, an attorney at the consulting firm Crowell Moring, described the challenges now facing employers: "Contractors are dealing with many unknowable business and legal risks, including the question of how best to manage compliance with the WARN Act. Many factors have combined to create this uncertainty, including the requirements of the threatened sequester  itself, and the lack of actionable detail as to how federal agencies intend to implement sequester."

Unfortunately, it is not only employers who are affected by the administration’s misleading guidance, but workers as well. In 2008, then-Senator Obama noted during a Senate hearing that failure to provide notice ignores the needs of workers and communities.

As Kerry Notestine, a shareholder with Littler Mendelson, explained, "Clearly, President Obama felt that workers facing potential separation from employment deserved advance notice, regardless of whether the WARN Act required such notice. The DOL now appears to take an about-face to this position, encouraging employers to withhold advance notice, even where the notice may be able to assist the workers and their communities to prepare for the potential transition to come."

To learn more about today’s hearing, click here. To learn more about the committee’s oversight of the department’s WARN Act guidance, click here and here.

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