I

104TH CONGRESS

2D SESSION H. R. 3369

To provide notice to employees when there are reductions in business

operations, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 30, 1996

Ms. WATERS introduced the following bill; which was referred to the

Committee on Economic and Educational Opportunities

A BILL

To provide notice to employees when there are reductions

in business operations, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. EMPLOYER REDUCTIONS.

4 (a) IN GENERAL.—An employer planning a reduction

5 in operations at a workplace shall provide written notice

6 to all of the following:

7 (1) All employees of the employer who are em8 ployed at the affected workplace.
2

•HR 3369 IH

1 (2) The labor organization which represents

2 those employees for collective bargaining, if such an

3 organization exists.

4 (3) The elected officials of the community in

5 which the affected workplace is located.

6 (4) The Secretary of Labor.

7 (b) GIVING OF NOTICE.—The notice required by sub8 section (a) shall be given not less than 3 months before

9 the actual reduction in operations is effected, unless the

10 provisions of any bona fide collective bargaining agree11 ment covering the affected workplace requires a longer ad12 vance notification period, in which case the provisions of

13 the collective bargaining agreement shall take precedence.

14 (c) NOTICE CONTENT.—The notice required by sub15 section (a) shall contain the following:

16 (1) The name, location, and nature of the work17 place affected by the planned reduction in oper18 ations.

19 (2) The reasons for the reduction in operations.

20 (3) An estimate of the duration of the reduction

21 in operations.

22 (4) The number of employees to be affected by

23 the planned reduction in operations.

24 (5) A description of rights and benefits relating

25 to due process, seniority, and severance pay that are
3

•HR 3369 IH

1 guaranteed to employees under collective bargaining

2 agreements or the personnel policies of the employer

3 in the event of a reduction in operations.

4 (d) APPLICATION.—The notice required by subsection

5 (a) shall not apply—

6 (1) if any unforeseen event causes a reduction

7 in operations;

8 (2) to reductions in operations resulting solely

9 from labor disputes;

10 (3) to reductions in operations that occur in

11 any of the commercial, industrial, or agricultural en12 terprises operated by a State or any of its political

13 subdivisions;

14 (4) to reductions in operations that occur at

15 construction sites or other workplaces that were

16 never intended as other than a temporary or sea17 sonal workplace;

18 (5) to reductions in operations resulting from

19 seasonal factors that are determined by the Sec20 retary of Labor to be customary in the industry of

21 which the employer is a part; and

22 (6) to reductions in operations resulting from

23 any employer who has filed for bankruptcy in ac24 cordance with Federal bankruptcy laws.
4

•HR 3369 IH

1 SEC. 2. ACTION BY THE SECRETARY OF LABOR.

2 When a reduction in operations will result from a

3 complete workplace closure or relocation, not later than

4 130 days after receipt of the notice of a reduction in oper5 ations under section 1, the Secretary of Labor, with the

6 assistance of State agencies as necessary or appropriate,

7 shall do the following:

8 (1) Coordinate all State government services for

9 the alleviation of the economic distress suffered by

10 displaced workers.

11 (2) When the reduction in operations will result

12 from a workplace closure or relocation, complete an

13 initial study of the feasibility of establishing a com14 munity-owned, employee-owned, or jointly owned

15 business to continue operations at the workplace.

16 SEC. 3. ACTION BY EMPLOYER.

17 An employer planning to effect a reduction in oper18 ations at a workplace, after giving notice of the reduction

19 in operations as required by section 1, shall do the follow20 ing:

21 (1) When the reduction in operations is a com22 plete closure or relocation of the workplace, make a

23 good faith offer of sale at fair market value of the

24 workplace, equipment, and inventory to the commu25 nity in which the workplace is located, or to an orga26 nization of the employees of the workplace which
5

•HR 3369 IH

1 singly or in combination attempts to form a commu2 nity-owned, employee-owned, or jointly owned busi3 ness at the workplace to be closed or relocated. Any

4 offer made under this paragraph shall not be with5 drawn earlier than the 50th day after the commu6 nity and employee organization officials have been

7 notified in writing by the employer of the assistance

8 available under section 5.

9 (2) Sales under paragraph (1) shall be predi10 cated on the continued compliance with the provi11 sions of any bona fide collective bargaining agree12 ment covering the workplace to be closed or relo13 cated. If the collective bargaining agreement at the

14 workplace to be closed has expired, or will expire

15 during the 1-year period after notification of the

16 complete closure or relocation, the prospective buyer

17 shall agree, as a condition for sale, to bargain in

18 good faith with employee representatives at the

19 workplace to be closed.

20 SEC. 4. REDUCTION IN OPERATIONS IN EFFECT.

21 When a reduction in operations takes effect, the em22 ployer shall provide a choice of the following benefits to

23 each affected employee:

24 (1)(A) Permanent preference rights in hiring

25 and employment at other workplaces of the employer
6

•HR 3369 IH

1 and, when the employee accepts employment at an2 other workplace, vacation benefits, and health, wel3 fare, and pension benefits earned while previously

4 employed by the employer.

5 (B) Severance pay benefits equal to one week’s

6 wages for each completed year of service up to the

7 date of termination, computed on the basis of 40

8 straight time hours at the employee’s regular wage

9 rate. A bonus of 1 week of pay shall be paid for each

10 5 years of service up to the termination date in addi11 tion to 1 week’s pay per year of service up to the

12 termination date. In no case shall any affected em13 ployee receive severance pay benefits for less than 3

14 weeks of wages computed on the basis of 40 straight

15 time hours at the employee’s regular wage rate.

16 (2) When the employee accepts a transfer to a

17 workplace of the employer which is 40 miles or more

18 from the employee’s residence, payment for the

19 movement of normal household goods, reimburse20 ment for the reasonable one-way transportation

21 costs for the employee and the employee’s depend22 ents to the new residence, and reimbursement for

23 reasonable legal fees and other fees and closing costs

24 associated with purchase or rental of a new resi25 dence up to a maximum of $500.
7

•HR 3369 IH

1 (3) Employers shall give the affected employees

2 30 days to choose between the severance pay bene3 fits and preference rights benefits. If, at the end of

4 30 days, an affected employee has failed to choose

5 1 of the 2 options, the employer may assign one of

6 the options to that affected employee.

7 (4) In all cases of a reduction in operation, the

8 employer shall maintain a continuation of the em9 ployer’s share of premiums and contributions for

10 any employee health and insurance benefit plans in

11 effect at the start of the reduction in operations for

12 one year, or until the employee becomes eligible for

13 health and insurance benefits as a result of reem14 ployment, whichever is sooner.

15 (5) The terms of a lawful collective bargaining

16 agreement shall prevail over any provision of this

17 Act with which they conflict.

18 SEC. 5. TECHNICAL ASSISTANCE.

19 The Secretary of Labor shall provide the following

20 technical assistance upon request of employees or commu21 nities adversely affected by reductions in operations:

22 (1) Conducting informational meetings for em23 ployees, employee organizations, and community or24 ganizations about the advantages and disadvantages

25 of community-owned businesses and about the serv-
8

•HR 3369 IH

1 ices and technical assistance available through the

2 Secretary of Labor.

3 (2) Evaluation of the feasibility and economic

4 viability of a proposed community-owned business,

5 based on the results of the study described in section

6 2.

7 (3) Technical assistance as needed to commu8 nity groups.

9 SEC. 6. ENFORCEMENT.

10 The Secretary of Labor shall enforce this Act. The

11 Secretary may issue subpoenas, subpoenas duces tecum,

12 administer oaths, obtain evidence, and take testimony in

13 all matters relating to the requirements of this Act.

14 SEC. 7. PENALTIES.

15 (a) CIVIL PENALTY.—An employer that fails to pro16 vide notice of a planned reduction in operations as re17 quired under section 1 shall be liable to the United States

18 for a civil penalty of not more than $1,000 for each af19 fected employee.

20 (b) CIVIL PENALTY ORDER.—When an order assess21 ing a civil penalty becomes final by operation of law or

22 on appeal, unless the amount of the penalty is paid within

23 10 days after the order becomes final, it constitutes a

24 judgment and may be filed with the county clerk in any

25 State. The clerk shall thereupon record the name of the
9

•HR 3369 IH

1 person incurring the penalty and the amount of the pen2 alty in the judgment docket. The penalty provided in the

3 order so docketed shall become a lien upon the title to

4 any interest in property owned by the person against

5 whom the order is entered, and execution may be issued

6 upon the order in the same manner as execution upon the

7 judgment of a court of record.

8 (c) CIVIL ACTIONS AGAINST EMPLOYERS.—(1) Any

9 employer that fails to provide notice of a planned reduc10 tion in operations as required under section 1 shall be lia11 ble to each aggrieved employee who suffers an employment

12 loss as a result of such failure for—

13 (A) back pay for each day of violation at a rate

14 of compensation not less than the higher of—

15 (i) the average regular rate received by

16 such employee during the last 3 years of the

17 employee’s employment; or

18 (ii) the final regular rate received by such

19 employee; and

20 (B) benefits under an employee benefit plan de21 scribed in section 3(3) of the Employee Retirement

22 Income Security Act of 1974 (29 U.S.C. 1002(3)),

23 including the cost of medical expenses incurred dur24 ing the employment loss which would have been cov-
10

•HR 3369 IH

1 ered under an employee benefit plan if the employ2 ment loss had not occurred.

3 Such liability shall be calculated for the period of the viola4 tion, up to a maximum of 60 days, but in no event for

5 more than one-half the number of days the employee was

6 employed by the employer.

7 (2) The amount for which an employer is liable under

8 paragraph (1) shall be reduced by—

9 (A) any wages paid by the employer to the em10 ployee for the period of the violation;

11 (B) any voluntary and unconditional payment

12 by the employer to the employee that is not required

13 by any legal obligation; and

14 (C) any payment by the employer to a third

15 party or trustee (such as premiums for health bene16 fits or payments to a defined contribution pension

17 plan) on behalf of and attributable to the employee

18 for the period of the violation.

19 In addition, any liability incurred under paragraph (1)

20 with respect to a defined benefit pension plan may be re21 duced by crediting the employee with service for all pur22 poses under such a plan for the period of the violation.

23 SEC. 8. DEFINITIONS.

24 As used in this Act:
11

•HR 3369 IH

1 (1) The term ‘‘affected employee’’ means any

2 employee who has been an employee for at least 13

3 weeks during the preceding 52 weeks at a workplace

4 and whose employment is terminated by a reduction

5 in operations at that workplace.

6 (2) The term ‘‘employer’’ means any business

7 enterprise that employs 100 or more employees, ex8 cluding part-time employees, or 100 or more employ9 ees who in the aggregate work at least 4000 hours

10 per week (exclusive of hours of overtime).

11 (3) The term ‘‘community’’ means, for any par12 ticular employer, the city in which the employer is

13 located or, if not located in a city, the county in

14 which the employer is located.

15 (4) The term ‘‘community-owned business’’

16 means a business which is either of the following:

17 (A) At least 51 percent owned by a not18 for-profit corporation established primarily for

19 the purpose of advancing the economic develop20 ment of the community, as defined in para21 graph (3), provided that the majority of the

22 members of the controlling board of directors of

23 the not-for-profit corporation shall be comprised

24 of elected representatives of the community.
12

•HR 3369 IH

1 (B) At least 51 percent owned by the city

2 or county in which the workplace of the em3 ployer is located and which is controlled by the

4 electorate of the city or county through elected

5 officials or an elected or appointed board of di6 rectors.

7 (5) The term ‘‘reductions in operations’’ means

8 either the transfer of any part of an employer’s op9 eration from one workplace to another existing or

10 proposed site, or the shutting down of a workplace

11 or any part of a workplace so as to reduce the num12 ber of employees at the workplace being shut down

13 or relocated by at least 25 percent or 15 employees,

14 whichever is greater, over any 3-month period.

15 (6) The term ‘‘taxing districts’’ means any city,

16 county, or special district permitted by law to tax

17 employers with workplaces located within its bound18 aries.

19 (7) The term ‘‘workplace’’ means any factory,

20 plant, office, or other facility where an employer has

21 hired employees to produce goods or provide serv22 ices.

23 (8) The term ‘‘employee-owned business’’

24 means a employer owned entirely by the employees
13

•HR 3369 IH

1 of the employer and controlled by those employees or

2 by a board of directors selected by those employees.

3 (9) The term ‘‘jointly-owned business’’ means a

4 employer owned jointly by a city or county and the

5 employees of the employer and controlled by a board

6 of directors selected by the city, county, or employ7 ees.

Æ