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Without Warning: Effects and reform of the WARN Act

A special 4-part investigation by Blade staff writers James Drew and Steve Eder


without warning

The Worker Adjustment and Retraining Notification Act became federal law in 1988. Its purpose was to give workers two months of advance notice to help them deal with the impending loss of their jobs, and give time to communities to adjust to the loss of a major employer.

Companies must abide by WARN if:

  • They have 100 or more full-time workers at one location.
  • Fifty or more workers lose their jobs in a plant closing. t In a mass layoff, either 500 or more workers are furloughed, or if 50 to 499 workers are laid off, those who lose their jobs represent one-third of the full-time work force.
  • The penalty for violating the law is back pay and benefits for each employee who did not receive notice — up to 60 days.

Despite the law, thousands of U.S. workers have unexpectedly lost their jobs as a result of plant closings and mass layoffs.

 

Day 1:

Without Warning: Flaws, loopholes deny employees protection mandated by WARN Act: (7/15/2007) A federal law that requires companies to give notice to workers losing their jobs is so full of loopholes and flaws that employers repeatedly skirt it with little or no penalty, a Blade investigation has found. Worker advocates say the law -- which requires many employers to notify their employees 60 days before they close a plant or lay off dozens of employees -- is in desperate need of reform because workers all over the nation have suffered. On Dec. 31, 2003, Robert Phason and his co-workers at the Meridian Rail plant in Chicago Heights, Ill., received a letter telling them that the factory was closing in eight days because the company's assets were being sold. The new owners didn't rehire Mr. Phason, a 34-year employee, and 36 others.

Compromises diluted bill's original intent: (7/15/07) On the evening of June 30, 1987, Dan Quayle rushed out of the U.S. Senate dining room.Mr. Quayle, the Indiana Republican who would become vice president in 1989, had been eating his dinner salad when he heard that backers of a bill he had been assigned to kill were making changes so it would pass. The bill, which had been wrapped into an international trade measure, would require larger companies to notify their workers 60 days before they closed a plant or laid off most of their workers. Business groups, the GOP, and some Democratic senators from the South and West wanted it dead.

 

Day 2:

Tiffin workers discover limits of WARN Act: (7/16/2007) Four days after Christmas in 2001, Gene Goshe braved the brisk cold as he walked to his newspaper box and unrolled his copy of the Tiffin Advertiser-Tribune. "National shutting down," blared the headline in tall letters across the front page. In seconds, Mr. Goshe's life changed forever. After devoting 33 years of his life to the National Machinery Co., Mr. Goshe read in the newspaper that morning that the plant had abruptly closed. He didn't get a phone call to let him know he no longer had a job.

Video:

 

National Machinery castoffs turned to Gilmor: (7/16/2007) As employees of the old National Machinery Co. learned that the WARN Act would be of little help to them, they went to lawmakers with a simple request: Amend the law to help workers who are laid off without notice in the future.The first elected official they turned to was U.S. Rep. Paul Gillmor, who was raised just a few miles from Tiffin. Tom Kummerer, a National Machinery employee for nearly 25 years, tried for months to get a meeting with Mr. Gillmor (R., Tiffin) to discuss the WARN Act and what transpired at National Machinery. "We had no luck when we contacted him," Mr. Kummerer said.

30-minute notice preceded closing of Delphos plant: (7/16/2007) For nearly 47 years, Elmer Hoffman went to work at the "can factory."Not only was Mr. Hoffman among New Delphos Manufacturing Co.'s longest-serving employees, he was among the most loyal. He was so loyal that he continued working for New Delphos after he lost the tip of his index finger on his left hand when he was 20 years old. On Oct. 16, 1990, New Delphos closed its doors, giving its workers a 30-minute notice that the sheet-metal manufacturer best known for making cans would cease to exist. Mr. Hoffman, who was 17 months from retirement, remembers what management told the factory's employees. "You could work the rest of the day, but you weren't getting paid," Mr. Hoffman, now 80, recalled. "So what would you do?" 

Video:

Elmer Hoffman and The Delphos Factory: The Blade talks with Elmer about his 47 years at the Delphos Factory in New Delphos, Ohio.

 

Day 3:

Different workers face the same problem with the WARN Act: (7/17/2007) Jose Correa beamed with pride as he walked out of the 113-year-old Catholic church. He and his wife had basked in the baptism of their 2-year-old son. "May the strength of Jesus Christ the savior be yours," the priest said in Spanish as he touched the forehead of Osbaldo Correa with holy water. For the 30-year-old Mr. Correa, the rituals -- with their powerful symbols of hope and renewal -- provided a brief respite from the upheaval and uncertainty of his family's life. On March 7, Mr. Correa and 101 other Latino workers lost their jobs unexpectedly at a factory in the suburb of West Chicago.

 

Day 4:

Reform overdue, WARN Act critics say: (7/18/2007) Two months ago, Ford Motor Co. gave the bad news to the 1,100 hourly workers at its casting plant in Brook Park, on the outskirts of Cleveland. The plant will close. The workers, though, were given a two-year notice -- ample time to prepare for the loss of their jobs and to plan for the future -- before the factory closes in mid-2009. The move is part of a series of plant closings and job cuts that the automaker says is crucial to its survival. Mike Oszterling, a plumber-pipefitter who has worked for Ford for 15 years, said he'll be ready when the plant closes. "I will survive," Mr. Oszterling said. "If I have to, I will sell off everything. I have good family and friends to support me."

Numerous states try to address plant closings: (7/18/2007) Recognizing the inadequacies of the WARN Act, at least nine states have passed their own versions to supplement the federal law, according to the National Conference of State Legislatures and attorneys involved in labor employment law. But most of those state laws have provided little relief to workers, said Julie Hurwitz, the former executive director of the Maurice and Jane Sugar Law Center for Economic and Social Justice, a nonprofit organization in Detroit that has focused on enforcing the WARN Act for the last 16 years.

 

Followup articles:

Senator Brown pushes to reform plant-closing law: (7/17/2007) U.S. Sen. Sherrod Brown of Ohio introduced a bill last night to reform a 19-year-old federal law designed to give notice to workers losing their jobs. Mr. Brown took action a day after a Blade investigation found the law is so full of loopholes and flaws that employers repeatedly skirt it with little or no penalty. The Worker Adjustment Retraining and Notification Act, or WARN, requires many employers to notify workers 60 days before they close a plant or lay off dozens of employees. Aides to two Democratic presidential candidates -- Sens. Hillary Clinton of New York and Barack Obama of Illinois -- said they planned to sign on as co-sponsors of the bill.

Fair warning supported by Edwards: (7/18/2007) Democratic presidential candidate John Edwards, on the campaign trail in Ohio yesterday, said workers about to lose their jobs deserve "fair warning." Mr. Edwards, who visited Cleveland and Youngstown as part of a campaign tour to discuss poverty, joined other leading Democratic candidates in support of overhauling the Worker Adjustment and Retraining Notification Act, known as the WARN Act. The law requires many employers to give a 60-day notice before laying off employees. "They need to have fair warning," said Mr. Edwards, a former senator from North Carolina, after meeting with community leaders at the Youngstown Business Incubator. "They need to be able to prepare and look for another job, not just be laid off and all of the sudden they are out on their own with no income, with nobody to support their families."

Kennedy backing WARN Act reform: (7/21/2007) U.S. Sen. Edward M. Kennedy said yesterday the federal plant closing notification law, which he helped negotiate two decades ago, needs to be updated to protect displaced workers. Mr. Kennedy's statement on the shortcomings of the Worker Adjustment and Retraining Notification Act, or the WARN Act, came on the heels of a four-day Blade investigation, which found that the law is so full of loopholes and flaws that employers repeatedly skirt it with little or no penalty. The law, passed by Congress in 1988, requires many employers to give 60 days' notice of plant closings or major layoffs.

WARN reform called human-rights issue: (7/22/2007) Supporters of a plan to overhaul the federal WARN Act should frame the issue as a human-rights campaign that resonates as people's bread and butter, veteran activists say. Two decades ago, Democratic senators worked with organized labor to stitch together a coalition that led to approval of the WARN Act -- the Worker Adjustment and Retraining Notification Act -- which requires 60 days' notice of plant closings and major layoffs. An investigation by The Blade -- chronicled in a four-part series last week -- found that the law is so full of loopholes and flaws that employers repeatedly skirt it with little or no penalty. Sen. Sherrod Brown (D., Ohio) is attempting to reform the law with the support from his party's three leading presidential candidates.

2 Senators support WARN Act reform bill: (7/25/2007) Sen. John Kerry, the Democratic party's nominee for president in 2004, has put his support behind an effort to reform the federal WARN Act. Mr. Kerry, of Massachusetts, and Debbie Stabenow, of Michigan, are the latest Democratic senators to sign on as co-sponsors of a bill to overhaul the Worker Adjustment and Retraining Notification Act, known as the WARN Act. The 19-year-old law requires many businesses to provide a 60-day notice before a mass layoff or plant closing. An investigative series by The Blade published last week found that the law is so full of loopholes and flaws that employers skirt it with little or no penalty.

Many laid-off employees knew little of WARN Act: (7/30/2007) Many workers who abruptly lost their jobs in a major layoff or plant closing say they had little or no knowledge that there was a federal law meant to protect them.U.S. Sen. Sherrod Brown, an Ohio Democrat, said he wants that to change. Earlier this month he introduced legislation to overhaul the 19-year-old Worker Adjustment and Retraining Notification Act, known as the WARN Act, which requires many employers to give 60 days' notice before a plant closing or mass layoff. Mr. Brown's bill includes a number of measures to broaden the law, including a mandate for the Department of Labor to provide educational materials about employee rights and employer responsibilities under the law.

House Democrat vows reform of WARN Act: (8/27/2007) The powerful chairman of the House Education and Labor Committee said he will push to reform a 19-year-old federal law that critics say is failing to require many companies to give adequate notice to workers losing their jobs. "There is a growing consensus that you cannot sustain an economic policy that in some part treats workers and their families as if they are disposable," U.S. Rep. George Miller (D., Calif.) told The Blade. Mr. Miller said a bill to overhaul the Worker Adjustment Retraining and Notification Act, or WARN, will be introduced in the House of Representatives and hearings will be held.

WARN Act falls short as jobs vanish: (12/22/08) As the realities of the economic downturn set in, droves of companies are shedding employees: Sometimes offering them notice required under federal law, sometimes not. The Sugar Law Center, a nonprofit organization based in Detroit that assists workers in WARN Act lawsuits, said its call volume has more than doubled since September, when the recent wave of layoffs and business closings started. Concerned workers are increasingly phoning that agency to find out if their former employers followed the 20-year-old federal law, which requires many employers to notify employees 60 days before a massive layoff or plant closing.

 

Learn more about the WARN Act:

Text of the Worker Adjustment and Retraining and Notification Act http://www.law.cornell.edu/uscode/text/29/chapter-23

U.S Department of Labor Fact Sheet on the WARN Act http://www.doleta.gov/programs/factsht/warn.htm

U.S. Department of Labor WARN Act Compliance Page http://www.dol.gov/compliance/laws/comp-warn.htm#.UHcRVq5wySo

Ohio Department of Job and Family Services WARN Act Section http://jfs.ohio.gov/warn/

Maurice and Jane Sugar Law Center http://sugarlaw.org/

General Accounting Office's 2003 Congressional Study on the WARN Act http://www.gao.gov/products/GAO-03-1003

General Accounting Office's 1993 Congressional Study on the WARN Act http://www.gao.gov/products/148916

President Ronald Regan's 1988 statement on the WARN Act http://www.reagan.utexas.edu/archives/speeches/1988/080288a.htm

The Illinois Worker Adjustment and Retraining Notification Act http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2617&ChapterID=68

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