House Education and the Workforce Committee Chairman John Kline (R-MN), along with Workforce Protections Subcommittee Chairman Tim Walberg (R-MI) and Representative Phil Roe, M.D. (R-TN), expanded the committee's oversight of the Obama administration's controversial actions concerning sequestration and the Worker Adjustment and Retraining Notification (WARN) Act. In a letter to Jeffrey Zients, Acting Director of the Office of Management and Budget (OMB), the committee members note critical flaws in OMB's September 28 WARN Act guidance and request documents and communications related to its development.
"The president is engaged in a desperate campaign to hide the consequences of sequestration from the American people," said Chairman Kline. "The most recent evidence is the administration's promise to reimburse the costs employers may face if they follow the Labor Department's misleading WARN Act guidance. The Obama administration is telling employers to ignore the law and putting taxpayers on the hook for any resulting legal expenses. These unprecedented political schemes would not be necessary if President Obama simply worked with Congress to replace sequestration's indiscriminate cuts. The president's failure to lead has created more uncertainty for workers and employers and increased costs for taxpayers."
The WARN Act requires employers with more than 100 employees to give affected workers 60 days' notice of mass layoffs or plant closings. On July 30, the Department of Labor released guidance that states the WARN Act does not apply to federal contractors affected by sequestration. As a result, workers across the country may not be notified of potential job losses. The department's own regulatory policies confirm it has neither enforcement power over the WARN Act nor the authority to issue "advisory opinions' in specific cases.
On August 2, the committee requested documents and communications concerning the department's misleading and incomplete guidance. The department has failed to adequately address the committee's concerns or provide substantial responsive materials. On September 28, OMB released additional guidance that promises to cover employers' legal expenses if they are sued for not providing layoff notices in accordance with the Labor Department's July guidance. In reference to OMB's recent action, the committee leaders note in their letter:
This suggests OMB expects a federal court could find a contractor who does not issue sequestration-related WARN Act notices in violation of the law. However, the DOL guidance concluded WARN Act notices are not required by law and a contractor's issuance of notices in advance of sequestration would be inappropriate and inconsistent with the law. This discrepancy could constitute an acknowledgement by the administration that WARN Act notices were required in advance of sequestration, which could foreclose the DOL guidance from receiving any deference from the courts and fuel WARN Act-related liability and costs for contractors who complied with the DOL guidance -- to the detriment of hard-working taxpayers.