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Federal Government To Reimburse Defense Contractors For WARN Act Violations

Published by on October 25, 2012

The White House has issued guidance to federal contractors informing them that any penalties, damages or attorneys’ fees incurred as the result of violating the Worker Adjustment and Retraining Notification Act (WARN) by not promptly issuing WARN Act notices to workers who will potentially be laid off as the result of sequestration will be reimburseable […]

The White House has issued guidance to federal contractors informing them that any penalties, damages or attorneys’ fees incurred as the result of violating the Worker Adjustment and Retraining Notification Act (WARN) by not promptly issuing WARN Act notices to workers who will potentially be laid off as the result of sequestration will be reimburseable expenses.  More after the break.

CNNMoney and The Hill report that the White House has made an effort to halt layoff notices that may be looming for government contractors.  If cuts take place due to sequestration, the Office of Management and Budget has said it would help cover attorney’s fees and litigation costs for employers who are sued for not providing adequate warning to employees.  The WARN Act requires companies with over 100 employees to notify workers at least 60 days in advance of a mass layoff.

The $109 billion in across-the-board cuts will become effective on January 2nd if Congress doesn’t replace sequestration as part of its debt-reduction plan.  The Obama Administration is reiterating the Labor Department’s guidance that it is inappropriate to issue WARN Act notices due to sequestration.

Defense contractors, in particular, will be forced to lay off workers if the budget cuts happen.  Local contractor Lockheed Martin has decided not to issue the notices to its 123,000 employees.  Sen. John McCain has vowed to block the use of taxpayer dollars for this purpose.

Fox News.com quotes Sen. John Thune, R-S.D., as saying that it was “troubling that the Obama administration would openly encourage the violation of federal law and offer to pay the legal fees that resulted.”  The decision is similar to an under-reported decision by the Justice Department to make an unusual bargain with the City of St. Paul, Minnesota, to avoid having a case heard by the U.S. Supreme Court that might result in unfavorable precedent for the Civil Rights Division.

What precedent will this set for the future?

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