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S. HRG. 110–945 

PLANT CLOSINGS, WORKERS’ RIGHTS, AND THE 

WARN ACT’S 20TH ANNIVERSARY 

HEARING 

OF THE

COMMITTEE ON HEALTH, EDUCATION, 

LABOR, AND PENSIONS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

ON

EXAMINING PLANT CLOSINGS, FOCUSING ON WORKERS’ RIGHTS AND 

THE WORKER ADJUSTMENT AND RETRAINING NOTIFICATION (WARN) 

(PUBLIC LAW 100–379) ACT’S 20TH ANNIVERSARY 

MAY 20, 2008 

Printed for the use of the Committee on Health, Education, Labor, and Pensions 

( 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/senate 

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS 

EDWARD M. KENNEDY, Massachusetts, Chairman 

CHRISTOPHER J. DODD, Connecticut 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

JEFF BINGAMAN, New Mexico 

PATTY MURRAY, Washington 

JACK REED, Rhode Island 

HILLARY RODHAM CLINTON, New York 

BARACK OBAMA, Illinois 

BERNARD SANDERS (I), Vermont 

SHERROD BROWN, Ohio 

MICHAEL B. ENZI, Wyoming, 

JUDD GREGG, New Hampshire 

LAMAR ALEXANDER, Tennessee 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

LISA MURKOWSKI, Alaska 

ORRIN G. HATCH, Utah 

PAT ROBERTS, Kansas 

WAYNE ALLARD, Colorado 

TOM COBURN, M.D., Oklahoma 

J. MICHAEL MYERS, Staff Director and Chief Counsel 

ILYSE SCHUMAN, Minority Staff Director 

(II) 

C O N T E N T S 

STATEMENTS 

TUESDAY, MAY 20, 2008 

Page 

Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio, opening statement ...................................................................................................................... 1 

Trumka, Richard L., Secretary-Treasurer, AFL–CIO, Washington, DC ............. 3 

Prepared statement .......................................................................................... 5 

Aguiar, Joe, Laid-off Worker, Fall River, MA ....................................................... 8 

Prepared statement .......................................................................................... 9 

Philo, John C., Esq., Legal Director, Sugar Law Center for Economic and 

Social Justice, Detroit, MI ................................................................................... 12 

Prepared statement .......................................................................................... 14 

Marculewicz, Stefan Jan, Esq., Principal, Miles & Stockbridge, P.C., Baltimore, MD .............................................................................................................. 23 

Prepared statement .......................................................................................... 26 

ADDITIONAL MATERIAL 

Statements, articles, publications, letters, etc.: 

Clinton, Hon. Hillary Rodham, a U.S. Senator from the State of New 

York ................................................................................................................ 39 

Obama, Hon. Barack, a U.S. Senator from the State of Illinois ................... 39 

(III) 

(1) 

PLANT CLOSINGS, WORKERS’ RIGHTS, AND 

THE WARN ACT’S 20TH ANNIVERSARY 

TUESDAY, MAY 20, 2008 

U.S. SENATE, 

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS, 

Washington, DC. 

The committee met, pursuant to notice, at 10:06 a.m. in room 

SDC–430, Dirksen Senate Office Building, Hon. Sherrod Brown, 

presiding. 

Present: Senator Brown. 

OPENING STATEMENT OF SENATOR BROWN

Senator BROWN. The Health, Education, Labor, and Pensions 

Committee will come to order. Thank you very much for joining us 

today. 

I want to thank Senator Kennedy for holding this important and 

timely hearing. The Chairman is in our thoughts. I hope he will 

soon be back wielding this gavel. 

I would add that I did my part after Senator Kennedy went to 

the hospital. My Cleveland Cavaliers laid down for the Celtics in 

game seven so that Senator Kennedy could enjoy that his first 

evening in the hospital. Then he got to watch a no-hitter last night. 

So I think he is doing OK. 

I want to thank all four of our witnesses for coming this morning 

and sharing your experience and expertise on this very important 

issue of plant closings and the success and the failures of the 

WARN Act, which Congress saw fit to pass some 20 years ago. The 

WARN statute, as we know, was a product of compromise. The origins of this law go back to the 1970s and the 1980s with the closings of several large steel mills and the stress that followed in communities like Youngstown, Toledo and Pittsburgh. 

Residents of these communities began to explore ideas about how 

to deal with the human and social consequences of these employer 

decisions. It gave way to a debate about the relationship between 

a company and its community. 

Lawmakers proposed bills to address these issues. Along with 

Senator Kennedy, Senator Howard Metzenbaum of Ohio, in whose 

seat I sit, raised the issue and fought tirelessly for a Federal response. He and his colleagues had broader ambitions for what 

eventually became the WARN Act. 

Earlier proposals required businesses to give notice up to 180 

days before a plant closing or mass layoff, depending on the number of employees affected and to consult with employee representaVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\DOCS\42628.TXT DENISE
2 

tives and local officials about ways to prevent the loss of jobs. Senator Metzenbaum and other proponents conceded much of what 

they sought in order to get some protections on the books. 

WARN then became part of the Omnibus Trade and Competitiveness Act of 1988. As revised, the bill required 60 days’ advance notice of plant closings or mass layoffs. Employers with 100 or more 

employees were covered. Most employee losses affecting 50 or more 

employees were subject to the notice requirement. There were exemptions and exceptions for sales of businesses, for unforeseen 

business circumstances, for faltering businesses seeking capital or 

new customers. 

The trade bill was then vetoed by President Reagan because of 

the plant closings provisions. Anti-WARN lobbyists argued that advance notice could increase economic inefficiency due to possible 

loss of customers, credit, and employees as well as to increase friction in labor and management relations. 

Two decades of experience with WARN, however, have not produced the devastating results that industry and business feared. In 

addition, WARN has not played a significant role in labor law litigation and has survived a constitutional challenge when the 5th 

Circuit held that WARN was rationally related to congressional 

concern over the economic harm caused by plant closings. 

Shortly after the veto, Senator Metzenbaum introduced the 

measure on its own. He said that this is an indication of the American people’s fairness and their concern and their compassion and 

their willingness to treat workers, who have given of their bodies 

and themselves over a period of years, to at least give them notice 

when the plant is closing. After several days of debate, the Senate 

approved the bill on July 6—20 years ago—1988. The House passed 

it a week later. The WARN Act became law on August 4, 1988, 

without the President’s signature. 

Over the past two decades, we have seen evidence that WARN 

does not cover enough layoffs as intended and that due to the enforcement only by the courts, employers have too often failed to 

provide notice. Rather than the employers’ fear of too much, we 

have seen too little. 

The Government Accountability Office found that less than onethird of mass layoffs are even covered by the WARN Act because 

of the act’s many loopholes. Most employers who are covered fail 

to comply with the law either out of ignorance or because the penalties and enforcement are so weak that they can, in fact, be ignored. 

With these shortfalls in the plant closings law, we have also seen 

our manufacturing base decline in the last 20 years. With the passage of NAFTA and other trade deals and an increase in the number of jobs off-shored, there is now hardly any sector of the economy immune from the effects of globalization. With these realities, 

I have seen inadequacies of WARN play out in Ohio and elsewhere 

over the past 20 years. 

About 15 years ago, a sheet metal manufacturer in Delphos, OH, 

gave workers 30-minute notice. Many of these workers had been 

with the company for more than 10 years. Workers at National Machinery in Tiffin, also in northwest Ohio, filed a WARN lawsuit 

after employers announced mass layoffs with no notice. The comVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\DOCS\42628.TXT DENISE
3 

pany claimed it was seeking new financing when it laid off hundreds of workers. 

Workers filed a lawsuit. Eventually, a judge approved a settle- ment that paid $375 to each worker for the violation. That kind of 

settlement hardly deters that kind of corporate behavior. 

The Toledo Blade examined some 226 WARN lawsuits filed since 

1989 by workers and found Federal judges dismissed 118 of the 

cases because of loopholes. This is a disturbing trend that illustrates problems with the law and suggests that it needs a fix. Employers simply choose not to comply with the law, and the majority 

of violations go unenforced. I look forward to hearing discussion 

about these inadequacies of the WARN Act. 

Last July, along with Senator Obama and Senator Clinton, I introduced the Forewarn Act, which makes modest adjustments to 

the existing statute. Forewarn lengthens the notification period 

from 60 to 90 days. It covers plant closings affecting 25 workers 

and mass layoffs of 100 workers or more. Finally, it authorizes the 

Labor Department and the State attorneys general to investigate 

violations and file WARN cases on behalf of workers in those jurisdictions. 

Even since last July, downward trends in the economy have accelerated. Most recent Labor Department figures show 20,000 more 

jobs eliminated in April, 260,000 this year already. With major 

changes in the U.S. economy over the last two decades, sudden 

plant closings and major layoffs have spread from manufacturing 

and factories to office parks and service sector jobs. 

I am hopeful this discussion today will serve as a springboard for 

action on WARN and other policies. The public demands it. 

Again, I want to thank all four of our witnesses for joining us. 

I will introduce each of you before you speak and look forward to 

your testimony. Keep your statements within 5 to 7 minutes, if you 

can. 

Mr. Aguiar, Senator Kerry was going to be here to introduce you 

but got stuck back in Boston today. So he isn’t going to make it 

but sends his regards and wanted to be here with you. 

I will start with Richard Trumka, who was elected to a fourth 

term as secretary-treasurer of the AFL–CIO in July 2005. First 

elected in 1995, he was the youngest secretary-treasurer in AFL 

history. He served three terms as president of the Mine Workers, 

of which he has been a member since he was 19 years old. He is 

a graduate of Penn State University, holds a law degree from Villa 

Nova law school. 

Mr. Trumka. 

STATEMENT OF RICHARD L. TRUMKA, SECRETARYTREASURER, AFL–CIO, WASHINGTON, DC 

Mr. TRUMKA. Thanks, Senator. Thank you for inviting me to testify this morning on behalf of the 10 million working men and 

women of the AFL–CIO. I also want to thank you personally for 

your deep commitment to the issues that are important to America’s working families. 

A little more than 2 months from now, on August 4, 2008, we 

will celebrate the 20th anniversary of the WARN Act. So this is a 

very appropriate time to reflect on its successes and failures in 

4 

dealing with the human tragedy of plant closures and mass layoffs 

and, specifically, the issue of advance notice for workers. 

As you have noted, the WARN Act was born out of the cataclysmic loss of manufacturing jobs in the 1980s. Since then, the 

wave of plant closings and off-shoring buffeting our economy has 

not subsided but has only gotten worse. Now the plague of mass 

layoffs has spread to the service sector as well. 

Unless you have lived through one of these experiences, you really can’t understand how traumatic and how often life-changing 

they can be for working families and their communities. As I have 

testified previously, the AFL–CIO believes a fundamental rethinking of our economic policies is essential to create an environment 

where fewer plant closures and mass layoffs occur. 

With regard to the WARN Act, there is no question that it has 

resulted in more workers getting advance notice before losing their 

jobs. In addition, I think we can all agree that WARN has not had 

the dire consequences predicted by its opponents in 1988 and has 

not resulted in a flood of litigation. 

But by any fair assessment, WARN has not lived up to its promises. It has certainly not lived up to the hopes of those of us in the 

labor movement who, beginning in the 1970s, fought to develop a 

more comprehensive and coherent strategy for dealing with plant 

closings and mass layoffs. 

The compromise legislation passed by Congress in 1988 was by 

no means a comprehensive strategy. It was a relatively modest 

measure, requiring certain employers to give only 2 months’ notice 

before plant closings and mass layoffs. Many of the WARN Act’s 

flaws were readily apparent on its day of enactment, as you noted, 

since they were the result of numerous concessions necessary to get 

it passed. 

Mr. Chairman, the shortcomings of WARN can boil down to this. 

The act requires too few employers to give too little notice to too 

few workers, and it allows too many employers to flout the law 

with impunity. While WARN has not been substantively amended 

in 20 years, several bills have been introduced by Congress to correct some of the most widely recognized defects. 

One of those you mentioned just now, the Forewarn Act by yourself, Senator Obama, and Senator Clinton. Another is the Early 

Warning and Healthcare for Workers Affected by Globalization Act, 

introduced last October by Representative George Miller and approved by the House on October 31, 2007. 

The AFL–CIO strongly supports both of those bills. Both bills 

would do the following. They would require businesses to provide 

3 months’ advance notice instead of 2, subject more businesses to 

WARN Act notice requirements, subject more mass layoffs to 

WARN notice requirements, subject more plant closings to the notice requirements, increase penalties to deter employer noncompliance with the notice requirements, authorize the Department of 

Labor to bring enforcement suits on behalf of workers, and close 

various loopholes that allow employers to avoid giving advance notice. 

Now, while these bills represent tremendous progress, we truly 

believe that they could be improved by requiring 6 months of advance notice instead of 3. You see, the AFL–CIO has long believed 

5 

that a longer notice period would better serve the purposes of the 

act. One purpose of the advance notice is to give State and local 

governments time to prepare effective services for displaced workers and to develop strategies for responding to sudden loss of jobs 

and tax revenue. 

Another purpose of early warning is to give workers time to prepare themselves financially, to pursue education and retraining opportunity, and to search for other employment. 

The third purpose of early warning is to give workers and local 

governments an opportunity to actually avoid job losses in situations where they can be avoided. 

While WARN Act reform is urgently needed, it should be accompanied by a greater commitment at the State and Federal level to 

taking advantage of the advance notice period to organize early 

intervention and job loss avoidance initiatives. Several States have 

already implemented effective early warning and early intervention 

programs that have saved thousands of jobs and helped maintain 

employment at manufacturing firms. The leadership by the Federal 

Government is desperately needed to support and encourage these 

programs. 

Advance notice and early intervention are ultimately about maintaining the living standards of America’s middle class. Despite 

large numbers of laid-off workers—dumping large numbers of laidoff workers into flooded job markets without any warning is a recipe for declining living standards and desperate workers to compete 

to secure bad-paying jobs. 

Advance notice, on the other hand, can allow governments to put 

in place effective assistance programs that make it more likely that 

workers will find relatively good-paying jobs more quickly without 

suffering unemployment. In some instances, advance notice may 

allow enough time for workers and their communities to actually 

develop strategies to avoid the loss of good-paying jobs in the first 

place. 

We see advance notice and early intervention programs as complementary parts of a much-needed comprehensive strategy to save 

good jobs and maintain the living standards of the American middle class. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Trumka follows:] 

PREPARED STATEMENT OF RICHARD L. TRUMKA

Thank you, Senator Brown and members of the committee, for inviting me to testify this morning on ‘‘Plant Closings, Workers’ Rights, and the 20th Anniversary of 

the Worker Adjustment and Retraining Notification (WARN) Act of 1988.’’ 

On behalf of the 10 million working men and women of the AFL–CIO, I also want 

to thank you personally, Senator Brown, for your deep commitment to this and 

many other issues important to America’s working families. 

A little more than 2 months from now—on August 4, 2008—we will celebrate the 

20th anniversary of the WARN Act. This is an appropriate time to reflect on our 

successes and failures in dealing with the human tragedy of plant closures and 

mass layoffs, and specifically the issue of advance notification for workers. 

The WARN Act was born out of the cataclysmic loss of manufacturing jobs in the 

1980s. Since then, the wave of plant closings and off-shoring buffeting our economy 

has not subsided, but has only gotten worse. Since 1998, America has lost 3.6 million manufacturing jobs, and since 2000 more than 40,000 manufacturing establishments have closed their doors. Now the plague of mass layoffs has spread to the 

service sector as well. 

6 

Mass layoffs continue at a pace of a million-and-a-half impacted workers every 

year, and almost half a million workers have been idled by mass layoffs already in 

the first 3 months of 2008. Long-term unemployment is far higher today than at 

the beginning of previous recessions, and has persisted at high levels throughout the 

most recent economic recovery. And we know that displaced workers suffer an average income loss of about 16 percent when they find a new job. 

Unless you have lived through one of these experiences, you really cannot understand how traumatic—and often life-changing—they can be for working families and 

their communities. As I have testified previously, the AFL–CIO believes a fundamental rethinking of our economic policies is essential to create an environment 

where fewer plant closures and mass layoffs occur. 

With regard to the WARN Act, there is no question that it has resulted in more 

workers getting advance notice before losing their jobs. In addition, I think we can 

all agree that WARN has not had the dire consequences predicted by its opponents 

in 1988, and has not resulted in a flood of litigation. 

But by any fair assessment, WARN has not lived up to its promise. It has certainly not lived up to the hopes of those of us in the labor movement who, beginning 

in the 1970s, fought to develop a more comprehensive and coherent strategy for 

dealing with plant closings and mass layoffs. 

The compromise legislation passed by Congress in 1988 was by no means a comprehensive strategy. It was a relatively modest measure requiring certain employers 

to give only 2 months’ notice before plant closings and mass layoffs. Many of the 

WARN Act’s flaws were readily apparent on the day of its enactment, since they 

were the result of concessions necessary to secure its enactment. 

Those flaws were recognized in reports issued by the General Accounting Office 

(GAO) in 1993 and 2003, and they were detailed by the AFL–CIO in testimony to 

Congress in March 2003. The shortcomings of WARN boil down to this: the act requires too few employers to give too little notice to too few workers, and it allows 

too many employers to flout the law with impunity. 

In its first appraisal of the new law in 1993, GAO concluded that workers were 

more likely to get advance notice of plant closings and mass layoffs thanks to passage of the WARN Act. About half of all covered businesses that shut down plants 

or had mass layoffs were not required to give WARN notices, however, and only 

about half of those required to give notice actually did so. 

On March 5, 1993, the AFL–CIO took note of GAO’s findings in a statement submitted to the Senate Labor Subcommittee. The AFL–CIO proposed lengthening the 

WARN Act’s advance notification period; subjecting more mass layoffs to WARN Act 

notice requirements; subjecting more employers to notice requirements; strengthening penalties to discourage employer non-compliance; giving the Department of 

Labor (DOL) an enforcement role similar to its authority under the Fair Labor 

Standards Act; and closing various loopholes. 

In 2003, GAO issued a second report further documenting the shortcomings of 

WARN. GAO found that only about a quarter of plant closures and layoffs were subject to WARN Act notice requirements in 2001, leaving over a million laid-off workers unprotected by the statute, and employers gave notice for only about a third of 

the plant closures and mass layoffs subject to WARN. 

Then in July 2007, the Toledo Blade newspaper published a four-part investigation into the WARN Act, and concluded: 

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. 

The Blade reviewed all of the lawsuits filed under the WARN Act since 1989, and 

concluded: 

A Blade analysis of 226 lawsuits filed in Federal courts across the country 

since 1989 revealed that judges threw out more than half the cases. In the majority of those decisions, judges cited loopholes in the law, ranging from companies that said they tried their best to give notice to employees to firms that 

claimed they could not predict bad financial times. In 108 cases, WARN Act 

lawsuits resulted in settlements or with the courts siding with the displaced 

workers. But in dozens of those cases, workers received only pennies on the dollar of what they felt they were owed. 

While the WARN Act has not been substantively amended in 20 years, several 

bills have been introduced in this Congress to correct some of its most widely recognized defects. One of those bills is the FOREWARN Act (S. 1792), introduced last 

July by Senators Brown, Obama, and Clinton. Another is the ‘‘Early Warning and 

Health Care for Workers Affected by Globalization Act’’ (H.R. 3796), introduced last 

7 

October by Rep. George Miller and approved by the House of Representatives on October 31, 2007. The AFL–CIO strongly supports both bills. 

The Brown and Miller bills would both do the following: (1) require businesses to 

provide 3 months’ advance notice instead of 2; (2) subject more businesses to WARN 

Act notice requirements; (3) subject more mass layoffs to WARN Act notice requirements; (4) subject more plant closings to the notice requirements; (5) increase penalties to deter employer non-compliance with the notice requirements; (6) authorize 

the Labor Department to bring enforcement suits on behalf of workers; and (7) close 

various loopholes that allow employers to avoid giving advance notice. 

While both these bills represent tremendous progress, we believe they could be 

improved by requiring 6 months of advance notice instead of 3. At minimum, a 6- 

month notice period should be required for plant closures and mass layoffs that affect larger numbers of workers. 

The AFL–CIO has long believed that a longer notice period would better serve the 

purposes of the act. One of the principal purposes of early warning is to give State 

and local governments time to prepare effective services for displaced workers and 

develop strategies for responding to the sudden loss of jobs and tax revenue. The 

earlier that notice is given, the more effective assistance programs can be in getting 

workers back to work more quickly at better wages. 

Another purpose of early warning is to give workers time to prepare themselves 

financially, to pursue education and retraining opportunities, and to search for other 

employment. Dislocated workers who receive advance notice and early adjustment 

assistance are more likely to be successfully retrained, and they get new jobs sooner 

and earn more than they would have without early intervention. Early warning increases the likelihood that employees can find work prior to being laid off, thus 

avoiding unemployment spells. 

The legislative compromise that resulted in only 2 months’ advance notice detracted from the purposes of early warning. Two months is generally not enough 

time to ensure that government assistance and resources are available to workers 

before they lose their jobs. Two months is often not enough time for workers to 

make the preparations necessary to be successfully retrained, or find good jobs 

quickly and avoid unemployment. Two months is definitely not enough time to serve 

the third purpose of early warning: to give workers and local governments an opportunity to avoid job losses in situations where they can be avoided. 

We should remember that early plant closure legislation prescribed more comprehensive strategies that gave workers and communities an opportunity to avoid 

job loss in the first place. These early proposals required employers to consult in 

advance with local governments and employee representatives. They required employers to provide relevant financial information (such as financial statements and 

relocation plans) to local governments and employee representatives seeking alternatives to plant closures and layoffs. They provided for technical and financial assistance to troubled firms and affected communities. They required 6 months’ (or 

more) advance notice so that these efforts would have time to bear fruit. 

While extending the WARN Act’s notice requirement to 6 months would allow the 

necessary time for early intervention and job loss avoidance initiatives, reform of 

the WARN Act should also be accompanied by a greater commitment at the State 

and Federal level to taking advantage of the advance notice period to organize these 

initiatives. 

Several States have already implemented effective early warning and early intervention programs that have saved thousands of jobs and helped maintain employment at manufacturing firms. In Pennsylvania, for example, the Strategic Early 

Warning Network of the Steel Valley Authority has worked with more than 450 

companies to save millions of dollars in wages and taxes that otherwise would have 

been lost to plant closings. 

Leadership by the Federal Government is desperately needed to support early 

warning and early intervention programs. The dire fiscal situation of many States 

precludes adequate funding on the necessary scale at the State level. We believe the 

Federal Government could play a critical role in coordinating and encouraging these 

programs. 

Advance notice and early intervention are ultimately about maintaining the living 

standards of the American middle class. Dumping large numbers of laid-off workers 

into flooded job markets without any warning is a recipe for declining living standards, as desperate workers compete to secure bad-paying jobs that may actually 

harm their long-term earnings potential. 

Advance notice, on the other hand, can allow governments to put in place effective 

assistance programs that make it more likely that workers will find relatively goodpaying jobs more quickly without suffering unemployment. In some instances, adVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 S:\DOCS\42628.TXT DENISE
8 

vance notice may allow enough time for workers and their communities to develop 

strategies to avoid the loss of good jobs in the first place. 

Obviously, good jobs cannot be saved in every instance. But in those instances 

where they can be saved, it can hardly be argued that the Federal Government is 

doing everything it can to save them. 

We see advance notice and early intervention programs as complementary parts 

of a much-needed comprehensive strategy to save good jobs and maintain the living 

standards of the American middle class. I thank you for your attention, and I look 

forward to your questions. 

Senator BROWN. Thank you, Mr. Trumka. 

Joe Aguiar is from Fall River, MA. He worked in the fabrics and 

textile industry for nearly 30 years. His first job was cutting fabrics 

for a curtain manufacturer. In 1980, he went to work for Quaker 

Fabrics, at that time the largest employer in Fall River and one of 

the largest fabric manufacturers in the world. 

Mr. Aguiar began as a production worker and eventually worked 

in maintenance. He met his first wife at Quaker Fabrics, and they 

have a 25-year-old son. He and his second wife have three more 

sons, age 18, 14, and 8. Mr. Aguiar became a U.S. citizen in 1986, 

owns his home, and is the youngest of five siblings all living in Fall 

River. 

After almost 27 years of employment with Quaker, the company 

without notice terminated Mr. Aguiar and all 900 of his fellow employees on July 2, 2007. 

Mr. Aguiar, welcome and thank you for being here. 

STATEMENT OF JOE AGUIAR, LAID-OFF WORKER, 

FALL RIVER, MA 

Mr. AGUIAR. Thank you very much, and I want to thank you and 

all the members for inviting me to be here today. 

That is all true what you just said and—OK, I am sorry. I am 

not used to these things. All right? Now you can hear me. All right, 

I will start all over again. 

When I was 17 years old, I came to this country. Three years 

later, I start working for Quaker Fabrics, one of the biggest companies in Fall River, MA, and worked there for 27 years. Like you 

said, I married first time, met my wife there, second wife there. I 

have got three kids now. One of them is here, the 18-year-old back 

here. 

What happened is that on June 29, we went on shutdown. The 

company shut down, and everybody goes on shutdown, but us 

maintenance work those 2 weeks. What happened is, I went to 

work that Monday morning, worked all day, went home at 3 

o’clock. At a quarter of six, I get a phone call from my supervisor 

telling me, ‘‘Joe, don’t come back to work tomorrow.’’ 

That is what happened to me and about 900 other employees. At 

that time, the company used to—about 3,000 people used to work 

for that company. Through all these years, that number started 

coming down, down, down. At that time, there was about 900 people there. 

I am a little bit nervous, but I will be all right. This is my first 

time doing these things. So, to tell you the truth, most of those people that went on shutdown, some of them went to Portugal. Some 

of them went to Florida, Canada, or wherever, and they didn’t 

know anything until they came back. 

9 

The other ones that were here heard on the radio or newspaper 

and some of them I called because my boss told me to. If I knew 

any phone numbers, yes, I called some of them. 

Like I said, they didn’t tell us anything about that they were 

going to close. We noticed that they were not doing too good. They 

keep saying that we lost so much this quarter, that quarter. But 

especially me, I never thought that place was going to close, and 

I was shocked. It was a big shock for me. 

Here I am now, almost 1 year later, still without a job. Good 

thing that we have this company over there that is called TRA that 

gave us some training, that we can go to school for like 1 year, and 

we get pay and get free insurance. But when that is done, we have 

got to find a job. 

I will tell you right now, the school that I am at, we have over 

300 people and all the same way as I am, you know? After this is 

over, we don’t know what is going to happen. 

I think that we deserve to get something from the company or 

whoever owns that, the bankruptcy or whatever, because they were 

supposed to give us at least 60 days’ notice before they were going 

to do anything like that, and nothing like that happened. 

Right now, I am collecting some money, not much. But I have got 

this part-time job at that company. Because some company in Massachusetts bought all the junk, steel, all the machines, and is making money out of that. We are working there part-time. When I got 

there the first day, like 4 weeks ago, that I know how that place 

was and I look at that, it is like a dump. 

All the machinery is all in skids, most of them have already been 

shipped to China, India, South Carolina, you name it. They are 

shipping everything overseas, and it is bad. 

Me and my wife, who used to work there, my wife worked there 

for 18 years. I worked there for 27. Now my wife is sick. She has 

filed a disability. She has got problems with her back. Here I am 

living on 300-some dollars a week. Me and her, we used to make 

around $65,000 annually. I will be making around $18,000 now. 

How can you live with something like that? 

I go everywhere. I put applications everywhere in Massachusetts. 

There is not much jobs over there. So it is very bad. So I am just 

hoping that at least we get some help, me and all the other 900 

co-workers, see what they can do to help us. 

Thank you very much. 

[The prepared statement of Mr. Aguiar follows:] 

PREPARED STATEMENT OF JOE AGUIAR

Chairman Brown and members of the committee, thank you for this opportunity 

to testify today about the shutdown of what was once the largest employer in Fall 

River, MA, Quaker Fabric. I worked for the company for nearly 27 years. Last year, 

over the July 4 holiday, Quaker Fabric shut its doors, terminating me and my 900 

fellow employees without giving us any prior notice. 

My name is Joe Aguiar and I was born in 1960 in the Azores islands of Portugal 

to a family of farmers. I remained in school through the fifth grade and came to 

the United States at the age of 17 to live with my older sister in Fall River, MA, 

where I still reside today. My first job in Fall River was cutting fabric for a curtain 

manufacturer. In 1980, I went to work for Quaker Fabric Corporation. At one time, 

Quaker Fabric was one of the largest manufacturers of Jacquard upholstery fabric 

in the world. I began at Quaker as a production worker and eventually moved to 

the maintenance department, where I worked until I was let go last year. 

10 

I met my first wife at Quaker Fabric and we have a son who is now 25 years 

old. I re-married and am raising three more sons, ages 18, 14 and 8, all of whom 

are students and live at home. My 18-year-old son is here with me today. 

I am the youngest of five siblings. We all live in Fall River. My wife and I own 

our own home. I became a U.S. citizen in 1986. 

When I began working for Quaker Fabric in 1980 the company had only a few 

hundred employees. I met my wife at the factory, and she worked there for nearly 

18 years. In many other families, both the husband and wife met at Quaker Fabric 

and worked there for many years. Many Quaker employees worked there more than 

20 years, like I did. 

When I went to work on Monday, July 2, 2007, I had no idea it was to be my 

final day at work. I was one of the few on site that day. Quaker always closed the 

first 2 weeks of July for vacation. Most of my fellow co-workers were away in Portugal, Florida, Canada and elsewhere. Because my job was maintenance, I worked 

through the vacation period. That Monday, I worked my regular shift from 7 a.m. 

to 3 p.m., then went home. That evening, I received a call from my supervisor. He 

told me not to return to work the next day; the company had closed. I was shocked. 

My supervisor asked if I had the phone numbers of other maintenance employees 

and if so, would I contact them that evening and tell them the company had closed 

and that they should not report to work the next day. I phoned several of my coworkers and told them what little I knew. They were in disbelief, as was I. Of 

course, I could not tell them why the company had closed because I did not know 

myself, nor apparently did my supervisor. Many of the employees who were in Fall 

River learned of the shutdown from the television and local AM radio station the 

next day, or from word of mouth from family or friends. But most of my co-workers, 

who were away, first found out days later when they came back from their vacations 

that they had no job. 

When I woke up the next day, on July 3, I still could not believe what I had 

heard. I had to see it with my own eyes. I thought someone would reopen the company. I drove to the building where I worked and saw the factory gates were 

padlocked with chains. Still, I did not give up hope. 

About a week after the company closed, my former co-workers and I received a 

letter in the mail telling us what we already knew, that we had been terminated 

effective the prior week. The Worker Adjustment and Retraining Act, the WARN 

Act, was mentioned in that letter, but I had never heard of the law and was unaware that there was any law that protected employees like me who are terminated 

as part of a mass layoff or plant closing. Certainly, had I known 60 days prior that 

I would lose my job, I would have prepared myself for both the financial and emotional impact. I would have had a head start looking for a new job. I could have 

applied for the jobs that were advertised during those 60 days. I would have set 

money aside for my and my wife’s unemployment. I would imagine most of my coworkers would have appreciated knowing before they spent lots of money visiting 

Portugal and other places for the holiday that their jobs were gone. 

After the company closed, I spent the next several weeks firmly believing that it 

would re-open and I would be called back to work. I drove past the plant where I 

had reported for the last 17 of my 27 years at Quaker, looking for some signs of 

activity, but saw only the padlocked gate. 

As my hopes vanished, I began actively looking for other employment. I have submitted applications to various factories in Fall River, but because so many of us are 

competing for the few jobs available I have not received a single job offer. Presently, 

I receive extended unemployment benefits and attend pre-GED classes provided by 

the Trade Adjustment Assistance program for dislocated workers. My wife attended 

these classes as well and received these benefits. Unfortunately, she suffered injuries while working at Quaker as an equipment operator lifting and carrying 15 lb. 

spools of yarn. She can not sit in class for the 5 hours a day required. She had to 

stop attending class and thereby lost her unemployment check and health benefits— 

extended unemployment income and medical coverage are tied to class attendance. 

Now she has mounting medical bills, and has applied for disability, but we are told 

the process is a long one. 

What does a sudden job loss do to a family like mine? At this time last year, my 

family of five enjoyed a combined annual household income of $65,000. Now we are 

living on my check of $344 per week, less than $18,000 a year. My 18-year-old son 

works part-time while going to school, and contributes to the household expenses. 

We are just getting by. 

I work a few hours a week to earn an additional $100 at the old Quaker Fabric 

factory buildings. I heard the company was sold for about $27 million and is now 

owned by a Canadian company called Victor Innovatex, Inc. Many of the factory 

buildings were sold and are still closed. I throw out the junk and debris left in buildVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 S:\DOCS\42628.TXT DENISE
11 

ings where I spent 27 years working. Not long ago, I saw that several older looms 

had been packed up and were being shipped out to a buyer in India. Recently, I 

saw many of the newer looms packed up and also being shipped away, perhaps to 

foreign countries, as well. Over the last few years that Quaker was in business, it 

imported a lot of the fabric it sold from China. The Chinese fabric came in through 

receiving and went out through shipping. We did not have to manufacture it. 

Roughly at the same time, Quaker Fabrics reduced the number of workers it employed from 3,000 to 900 mostly through layoffs. Then, on July 3, it went to zero. 

Shortly after Quaker closed down, the employees were called to a meeting with 

a company official. She did not tell us why the company closed and did not say why 

we were provided no notice. We were told that our health insurance had been cancelled as of July 5, the day after the company shut down. And, because the company 

was no longer operating, we had to find medical insurance on our own. Without government retraining benefits I receive, my family and I would have no medical coverage. I expect my benefits will expire this October. 

I reluctantly took on the role of the lead plaintiff, and later class representative, 

in a WARN Act lawsuit filed in the Delaware bankruptcy court on behalf of myself 

and the other former employees of Quaker Fabric. Our lawsuit was filed against the 

Quaker Fabric estate in September of last year. It took me a long time to find out 

anything about the WARN Act. I was not given any guidance about the WARN Act 

by the company or governmental officials. Months after the company closed, I 

learned that there is such a law that should have provided us advance notice of our 

job loss. I learned that in order to pursue my WARN rights I had to retain a private 

attorney, that there was no government agency that would enforce those rights on 

behalf of the employees. The law firm I retained is Outten & Golden in New York 

City. After the lawsuit was filed, members of the Outten & Golden firm came to 

Fall River. We held a meeting in a banquet hall. Almost 700 of the 900 terminated 

employees attended and learned about their rights under the WARN Act. Of course, 

all of us are most concerned about whether we will get any money from the company now that it is bankrupt. 

At the meeting, my former co-workers expressed their gratitude to me for stepping forward and starting the lawsuit. Still, it has been a slow process and the outcome remains uncertain. In the end, the most we can hope to recover is 60 days 

wages and benefits. For many of us who spent 20 or more years of dedicated service 

to Quaker Fabrics, that is not much but it is something that will help us to live 

until we find jobs and can support ourselves again. 

I, and many of the Quaker workers in Fall River, are unfamiliar with the laws 

such as the WARN Act. We now know that there are laws that can protect us. But 

the problem is who is going to explain them to us and fight for us? It is hard to 

find anyone. If the WARN Act were stronger, I think it would protect us better. 

There would be more help. And employers would know they have to give employees 

notice. So I am here today to tell you how much we appreciate the work that you 

are doing in the Congress to make the WARN Act stronger. We hope you succeed, 

so that we, and others like us, will be given more time to prepare before we lose 

our jobs. Employees should not be treated like the trash that I take from the empty 

Quaker factories and put out on the street. 

Again, I, along with the 900 men and women who lost their jobs at Quaker Fabric, thank you for your interest in this issue. 

Senator BROWN. I appreciate very much your being here, Mr. 

Aguiar, and speaking out. Thank you. 

You didn’t seem nervous. Thanks. 

Mr. AGUIAR. I am nervous. You don’t know me. 

Senator BROWN. John Philo is an attorney with over 15 years’ experience representing and advocating for workers and disenfranchised people. He has counseled and represented hundreds of workers in WARN Act matters and litigated in courts throughout the 

country on behalf of injured persons in employment, personal injury, and product liability matters. 

Mr. Philo is also a former deputy director of Detroit city council’s 

legal and policy staff, a graduate of St. Louis University School of 

Law and the McGill University Faculty of Law. 

Mr. Philo, welcome. 

12 

STATEMENT OF JOHN C. PHILO, ESQ., LEGAL DIRECTOR, 

SUGAR LAW CENTER FOR ECONOMIC AND SOCIAL JUSTICE, 

DETROIT, MI 

Mr. PHILO. Thank you. 

I want to thank Chairman Kennedy, all the members of the committee, for convening this hearing and particularly thank you, Senator Sherrod Brown, and your office for inviting us to speak and 

being at the forefront of this issue. 

I almost feel as though anything I am going to say pales in comparison to the real-world experience of workers like Mr. Aguiar. We 

see them too often, and we hope and trust that the work of the 

committee here can give some meaning to what we say here today. 

I am the legal director of the Maurice and Jane Sugar Law Center for Economic and Social Justice. Sugar Law Center is a national nonprofit in Detroit. The central focus of our work is to provide support to workers concerning their WARN Act rights. 

Through that work, our center has become a national clearinghouse and resource center on WARN Act issues. We believe that 

WARN Act reform is long overdue as a faltering economy results 

in mass job loss in more and more communities. 

Our economic system provides virtually unlimited flexibility for 

employers to increase profits, limit losses, and plan a future for 

their companies by laying off workers. Our Government has structured this economic system to enhance this flexibility through trade 

laws that allow employers to relocate worksites with unprecedented 

global mobility, through tax systems that permit very tough competition for jobs among our Nation’s States and cities, and through 

deregulation that has permitted business creativity but also allowed rampant corporate opportunism, and through a host of other 

measures. 

While such measures have benefited some in our Nation, there 

are many others who directly bear the burden. There are hundreds 

of thousands of workers who are laid off each year in mass layoffs 

and worksite closings. Over the past year, our Nation has seen severely increased economic instability. In the first quarter of 2008, 

there were over 1,100 extended mass layoffs that resulted in job 

loss for approximately 190,000 workers. 

Mass layoffs and worksite closures, however, are not a phenomena occurring only during recessions, but rather have become 

an inherent characteristic of our economy. Since 1996, we have 

seen well over 1,100 extended mass layoff events in nearly every 

quarter of every year. To ensure a fair future for our Nation’s 

workers, we recommend the following actions. 

First, the WARN Act should be amended to provide earlier notice 

to workers and State and local officials. Longer advance notice provides greater opportunities for workers to avoid unemployment and 

for government officials in local communities to explore opportunities for keeping worksites open and for developing stabilization 

plans. 

When the WARN Act became law in the late 1980s, it took laidoff workers an average of 12 weeks to find a new job. At present, 

finding new employment takes approximately 5 months. So more 

advance notice is needed to prevent the consequences of sudden 

and devastating job loss. 

13 

The act should be amended to provide a minimum notification 

period of 16 weeks, but it should also be amended to further provide tiered notification that we see in other countries of up to 6 

months, particularly when job losses result from long-planned business decisions such as the relocation of worksites. 

In addition to expanding the notification period, the WARN Act’s 

immediate goals are most effectively advanced by expanding the 

pool of workers entitled to the act’s protections. In its 2003 report, 

the GAO found that over three quarters of mass layoffs and worksite closures were exempted from the act’s notice requirements. 

The GAO statistics ultimately showed that more than 90 percent 

of America’s workers who experience a mass layoff or worksite closing are unlikely to receive WARN Act notice for their job loss. This 

defeats the purpose of the existing legislation. 

The pool of covered workers can be expanded by reform to reduce 

various thresholds that exist in the act. Most notably, the 100 fulltime employee threshold should be reduced to 50 or amended to include part-time and contingent workers, which have become prevalent in American society and American business. 

An advance notice should be required whenever a layoff of 25 or 

more workers occurs at a single site. The threshold issue is a critical issue for expanding coverage, and there are other important 

threshold reforms that we have detailed further in our written 

statement. 

In addition to increasing the notification time and expanding coverage to more workers, the act should be reformed to close compliance gaps. The GAO’s report found that employers only provided 

advance notice in approximately one-third of mass layoffs and 

worksite closings where notice was required. Even when advance 

notice was provided, many notices are untimely. 

In workers’ private lawsuits, very low allowable damages hinder 

courts’ ability to provide an effective remedy to workers and to provide effective deterrence to bad faith employers. Compliance gaps 

can be closed by permitting recovery of a full range of compensatory damages or requiring violators to pay double back pay and 

benefits and to allow punitive damages against employers who intentionally violate the act or recklessly disregard the workers’ 

rights under the act. 

To protect the interests of both affected workers and larger communities, the act should be strengthened to allow the Department 

of Labor and State officials to bring suit on behalf of workers, to 

enforce civil penalties, and to seek injunctive relief to prevent a 

mass layoff or worksite closing when advance notice was not provided and has particularly devastating effects on that local community. 

The act should be further amended to close massive loopholes 

that permit employers to compel employees to sign blanket release 

forms at the time of their job loss in exchange for a nominal severance package. These employer practices are unconscionable, and we 

see them regularly in our work. The act should be amended to 

render such releases void and without legal effect. 

Other reform measures no less important than the ones I have 

spoken of are set forth further in our written statement. 

14 

1 I would like to thank Tova Perlmutter, Executive Director of the Sugar Law Center and 

Tony Paris, a Staff Attorney at the Law Center, for their contributions and feedback in the preparation of this testimony. 

In closing, on behalf of the Sugar Law Center and the workers 

we represent, I would again like to thank the committee and you, 

Senator Brown, for the opportunity to speak. Fundamentally, the 

WARN Act is about fair play for workers in an ever-changing economy. 

Opening our economy to global competition, inherent business cycles, periods of widespread corporate wrongdoing, and other factors 

create an ongoing risk of mass job loss at worksites in every industry and in all regions of the country. A debt of fundamental fairness is long overdue to these workers who bear that risk, and 

WARN Act reform is one measure to begin to repay that debt. 

Thank you. 

[The prepared statement of Mr. Philo follows:] 

PREPARED STATEMENT OF JOHN C. PHILO, ESQ. 

I. INTRODUCTION

Thank you committee Chairman Hon. Edward M. Kennedy, Ranking Member 

Hon. Michael B. Enzi and all members of this committee for convening this hearing 

and for allowing me the opportunity to testify on behalf of the Maurice and Jane 

Sugar Law Center for Economic and Social Justice (Sugar Law Center). 

My name is John Philo and I am the Legal Director of the Maurice and Jane 

Sugar Law Center.1 Our organization is a national nonprofit public interest law center located in Detroit, MI. Founded on the belief that economic and social rights are 

civil rights and ultimately human rights, we have focused our work on economic and 

social justice issues. One of our first acts when we opened our doors on February 

1, 1991, was to establish a Plant Closing Project in support of workers and communities struggling to survive the effects of mass job loss during times of economic instability. A central focus of the project is to provide support to workers concerning 

their rights under the WARN Act. 

Since establishing the Plant Closing Project, the Sugar Law Center has represented thousands of dislocated workers in WARN Act matters throughout the 

country. We provide information and advice to workers and their representatives 

and we litigate lawsuits on their behalf. The Center also provides technical assistance to lawyers and rapid response workers in State government and we publish 

the only comprehensive practitioner’s manual exclusively focused on WARN Act 

issues. 

As a result of these efforts, the Sugar Law Center has become the national clearinghouse and resource center for WARN Act related litigation. We have been able 

to develop a practical ability to recognize fact patterns that give rise to WARN Act 

issues. Through such work, we have experience in analyzing fact patterns for their 

viability as legal cases under the act and have experience in analyzing fact patterns 

to recognize those circumstances where the act provides no protections to workers. 

Our experience provides us with a unique position to observe the devastating impact 

of gaps in protection, ambiguities, and loopholes within the current WARN Act statute. 

The Sugar Law Center’s experience with the WARN Act has been extensive and 

our commitment to protecting and assisting dislocated workers throughout the country runs deep. For these reasons, I am pleased to have the opportunity to provide 

our comments on how and why WARN Act reform is necessary to make the act as 

effective as it can and should be. 

On behalf of the Sugar Law Center and those dislocated workers whom we represent, I wish to thank all of you again for convening today’s hearing. 

II. ECONOMIC & SOCIAL CONCERNS AFFECTING LOCAL COMMUNITIES

The impact of job loss is far reaching. Loss of employment from mass layoffs and 

worksite closings can have devastating impact not only on individual workers, but 

also their families and local communities. The most immediate impact is loss of income to the worker and family dependents. The loss of income and related financial 

and personal stress leads to very real increases in personal bankruptcies, declines 

15 

2The U.S. Department of Labor defines ‘‘mass layoffs events’’ as those involving 50 or more 

workers and includes both mass layoffs and worksite closures. 3 USDOL, Bureau of Labor Statistics, Extended Mass Layoffs in the First Quarter of 2008 (Released May 15, 2008). 4See International Covenant on Economic, Social and Cultural Rights, 16 December 1966 G.A. 

Res. 2200A (XXI), 21 U.N.GAOR, 21st Sess., Supp. No. 16, at 49, U.N. Doc. A/6316 (1966), 993 

U.N.T.S. 3 (entered into force 3 January 1976) at Art. 9 and American Declaration of the Rights 

and Duties of Man, O.A.S. Res. XXX (adopted by the Ninth International Conference of American States 1948), reprinted in Basic Documents Pertaining to Human Rights in the Inter-American System, OEA/Ser.L.V/II.82 doc.6 rev.1 (1992) at Art. XVI. 

of individual’s and family members’ physical and mental health, and the breakup 

of families. The impact also extends to businesses frequented by affected workers 

leading to a ripple effect of potential closings. Likewise, local communities face potentially crippling reductions in their tax base at a time when government social 

services are most needed. 

Over the past several years, our Nation has seen increased economic instability. 

Unemployment rates are again reaching levels last seen during the economic recession of 2001 and 2002. Since 2004, we have seen well over 1,100 mass layoff 2 events 

in nearly every quarter of the calendar year. In the last quarter of 2007, there were 

1,814 mass layoff events. In the first quarter of 2008, the country experienced 1,111 

mass layoff events resulting in job loss for approximately 190,000 workers.3 On average, 170 workers lost their jobs in each of these layoffs and 12 percent of these 

events were attributed to the permanent closure of a worksite. Mass layoffs and 

worksite closures appear to have become a recurring institutional characteristic of 

the Nation’s economy. 

Our economic system is structured to provide virtually unlimited flexibility to employers to plan for the future of their companies and to limit financial losses by laying off workers and closing worksites. The workers who have provided the foundation upon which such companies will reap benefits into the future and who suffer 

the most direct consequences of uncertain economic times deserve nothing less than 

a fair opportunity to plan a future for their families and to avoid catastrophic financial losses when faced with job loss. Under such circumstances, fair play for workers 

is not only good policy but is a moral imperative. 

III. THE WARN ACT’S GOALS & HISTORY

The protections of the WARN Act find its roots in the fundamental human rights 

of all persons. In an effort to avoid the political, economic, and social instability that 

led to the devastation and destruction of two world wars, the United States and the 

world community founded the United Nations and other regional bodies to affirm 

and advance the basic human rights of all peoples. A worker’s right to social security and protections in the event of unemployment is one such right recognized by 

all democratic societies.4 Along with unemployment insurance and trade adjustment 

assistance, the WARN Act is one component of a web of measures through which 

workers have struggled to meaningfully realize their human rights within our legal 

system. 

Advance notification for workers facing a permanent layoff had been sought for 

many years by workers and communities. Initiatives in the 1970s and early 1980s 

failed to pass Congress; however by the mid-1980s the effects of large scale worker 

dislocations could no longer be ignored. In 1985, after a hearing before the U.S. 

House of Representatives Education and Labor Committee, President Reagan’s 

Labor Secretary William E. Brock established a task force to study worksite closings 

and worker dislocation. 

The task force reviewed advance notification and worker readjustment programs 

in Europe and Canada and studied the issue of worker dislocation for approximately 

1 year before issuing its report. The task force concluded that advance notice is an 

essential element of a meaningful adjustment program for dislocated workers. 

In 1987, versions of the WARN Act were introduced before the U.S. House and 

Senate. The legislation was supported by many organizations including the National 

Conference of Mayors, the National League of Cities, the AFL–CIO, and individual 

labor unions. 

The goals of the bills were articulated by Sen. Kennedy, during Senate debates: 

First, advance notice is essential to the successful adjustment of the workers 

to the job loss caused by changing economic conditions. Times have changed for 

American workers. The person who will stay with one employer for 30 years is 

becoming more the exception and less the rule. Frequent changes are becoming 

more common. An advance notice provision insures that large numbers of workers will not be displaced without warning and without planning. . . . 

16 

5 Remarks of Senator Kennedy, 134 Cong. Rec. S. 8376 (June 22, 1988), Legislative History, 184. 6Dislocated Workers: Worker Adjustment and Retraining Notification Act Not Meeting Its 

Goals (GAO/HRD–93–18, February 23, 1993). 7 Id. at 3. 

8 Id. at 4. 

*ERR14**ERR14*9 Id. 10The Worker Adjustment and Retraining Notification Act (GAO–03–1003, September 2003) 

at p. 7. 11 Id. at p. 10. 12 Id. at p. 11. 

Second, advance notice saves the Government money. The Office of Technology 

Assessment estimated that advance notice could help save between $257 million 

and $386 million in unemployment compensation benefits each year. . . . 

Third, advance notice makes each dollar that we appropriate for adjustment 

efforts to go further. We know that with advance notice, adjustment programs 

are more effective in getting employees back to work more quickly, and at better 

wages. 

Fourth, and perhaps most important, an advance notice requirement assures 

fair play for American workers.5 (Emphasis Added). 

The bills passed out of committee in both the House and Senate and provided for 

between 90 and 180 days advance notice of mass layoffs and worksite closings. In 

an effort to ensure passage, the notification period was shortened to 60 days and 

after an initial veto by the President, the WARN Act became law on August 4, 1988 

and remains in its original form today. 

By the early 1990s however, workers advocates and legislators were beginning to 

recognize that the goals of the WARN Act were not being fully realized by the existing statute. On February 23, 1993 and again on July 26, 1994, the Sugar Law Center appeared before this committee, at the request of then-Sen. Howard Metzenbaum, to discuss areas of the WARN Act that needed revision. Former Executive 

Directors Julie Hurwitz and Kary Moss, speaking on behalf of the Sugar Law Center both testified that while the passage of the WARN Act was a significant and 

laudable event for the Nation’s workers, the act had fallen far short of its goals. 

In February 1993, the U.S. General Accounting Office (GAO) published a report 

detailing its findings concerning the law’s reach and limits.6 The GAO found that 

as a result of the act’s passage, employers were more likely to give workers advance 

notice of mass layoffs and worksite closings.7 The GAO however found that only 

about half of employers conducting a mass layoff or worksite closing were required 

to provide advance notice.8 Of the closures where advance notice was required, advance notice was only provided 50 percent of the time and when notice was provided, 25 percent of the notices were untimely.9 Despite such stark findings, efforts 

to reform the act stalled. 

A decade later, the GAO reported further findings concerning the act’s limited 

coverage of our Nation’s workers and employers’ compliance with the statute. The 

GAO’s updated study suggests that coverage and compliance has worsened rather 

than improved in the intervening years. In 2003, the GAO reported that only 24 

percent of all mass layoffs and worksite closures were subject to the WARN Acts 

advance notice requirements.10 Furthermore, the report found that employers provided advance notice in only 26 percent of the mass layoffs and 46 percent of the 

worksite closures where WARN Act notification was required.11 Even when advance 

notice was provided, 32 percent of the notices were untimely.12

As a result, timely advance notification is only being provided in 6 percent of all 

mass layoffs and worksite closures. In mass layoffs and worksite closures covered 

by the act, timely advance notice is only provided to workers 25 percent of the time. 

These numbers reveal serious problems with the number of worksites covered by the 

act’s protections and with employers’ compliance. Coverage and compliance can and 

must be improved by amendments to the statute. 

As confirmed by the findings of the GAO reports, WARN Act reform is necessary 

and long overdue. Fundamentally, the WARN Act is about fair play for workers in 

an ever-changing economy. Opening our economy to global competition, inherent 

business cycles, periods of widespread corporate malfeasance, and other factors create an ongoing and semi-permanent risk of mass job loss at large worksites in all 

industries and in all regions of our country. A debt of fundamental fairness is long 

overdue to the workers, families, and communities who bear the risk and most directly suffer the devastating consequences of mass layoffs and worksite closures. 

WARN Act reform is one measure to begin to repay that debt. 

17 

13See Toshihiko Mukoyama and Ays ̧eu ̈l Sahin, Why Did the Average Duration of Unemployment Become So Much Longer, Staff Report No. 194 (Federal Reserve Bank of New York, Sept. 

2004) at 1–2. 14 Id. 15 Id. 16 USDOL, Bureau of Labor Statistics, The Employment Situation: April 2008 (USDL 08–0588) 

at Table A–9. 

IV. GAPS IN PROTECTION AND OVERDUE REFORM

The WARN Act’s advance notice requirements mitigate the effects of worker dislocation in three principal ways. First, advance notice gives workers time to financially plan for an impending job loss and gives workers time to learn of and pursue 

other job and retraining opportunities while still employed. Advance notice thereby 

minimizes the time workers are unemployed and not enrolled in educational and 

skills development programs. This reduces employers’ unemployment insurance 

costs and eases the burden on government service providers who assist unemployed 

workers. 

Second, advance notice allows social service providers time to prepare and implement effective services for displaced workers. Significant lead time is necessary for 

State rapid response workers and others to develop and implement informational 

outreach to workers regarding transition programs and benefits. The advance time 

also assists service providers in developing and structuring retraining services that 

are tailored to the needs of laid off workers and that are ready for worker enrollment at the time that layoffs occur. 

Finally, advance notice gives local governments, communities, and workers representatives time to develop strategies in response to job losses and lost revenues. 

With advance notification, these groups can work cooperatively with employers to 

retain employment through incentives, new ownership and operating structures, 

and/or workplace concessions. Furthermore, if job and revenue loss is to occur, government and community groups can develop and implement economic and service 

plans that minimize the adverse effects of mass job loss on local communities and 

affected neighborhoods. 

Despite the significant strides made by the passage of the WARN Act, there are 

gaps in protection, ambiguities, and loopholes that prevent the act from serving the 

intended purposes of advance notification. Reform now can close loopholes and clarify ambiguities to increase the number of worksites covered by the act and to increase compliance by employers. 

1. Provide Earlier Notice to Workers 

Most experts agree that longer advance notice periods result in better outcomes 

for dislocated workers and the communities in which they live. The WARN Act’s 60- 

day advance notice is important but far too short in time for workers to successfully 

transition to new employment and for communities to explore options for keeping 

a worksite open. 

Longer advance notice provides greater opportunities for workers to avoid unemployment. The statute presently provides 8 weeks of advance notice. Eight weeks 

is an unduly short timeframe given data showing steady historical increases in the 

time that it takes for workers to transition from one job to another and given data 

showing that it will take current workers over twice the time of the advance notice 

period to find new work. 

When the WARN Act became law in the late 1980s, it took laid off workers an 

average of 12 weeks to secure new employment.13 Over the past 20 years, the length 

of time required to locate new employment has steadily increased.14 Since the turn 

of the century, the average duration has ranged between approximately 14 and 18 

weeks.15 At present, the average duration is 18.3 weeks and it is not until 26 weeks 

have passed when 80 percent of workers will be re-employed.16

In other words, when the act was initially passed the advance notice period provided continued employment during 66 percent of the time that it would take an 

average worker to find new work. Today, the advance notice period accounts for 44 

percent of the time that an average worker will require to secure a new job. As a 

result, more workers are spending longer periods unemployed creating greater risks 

of catastrophic financial distress. 

Longer advance notice also provides government officials and local communities 

meaningful opportunities to explore options for keeping a worksite open. Along with 

notification to workers, the WARN Act requires advance notice to union representatives and State and local officials. The purpose of such notification is to provide opportunities for cooperative initiatives to assist in a business turnaround, restructuring, or change in ownership of a facility to avert job loss. Initiatives to effect such 

18 

17See Steel Valley Authority, Rapid Response: Layoff Aversion Guide (2006) at pp. 51–54. 18See Geoffrey England, Unjust Dismissal and Other Termination-Related Provisions: Report 

to the Task Force on Part 111 of the Canada Labour Code Regarding the Termination of Employment Provisions of the Canada Labour Code (May 16, 2006) at p. 67–68 (noting the varying statutes providing up to 18 weeks advance notice within the Federal and provincial laws of Canada). 19See Canada Labour Code, amended 1992 at §212. 20See Trade Union and Labour Relations (Consolidation) Act, 1992 (TULRCA) at §§193 

&1881. 21GAO/HRD–93–18 at 17, Fig. 2.1. (analyzing data from calendar year 1990). 22GAO–03–1003 at p. 8, Fig. 2 (analyzing data from calendar year 2001). 

outcomes include the provision of government grants and loans, tax and investment 

incentives, solicitation of new ownership groups, employee stock ownership plans, 

and stakeholder involvement in reorganizing operations. 

To begin such processes however, a pre-feasibility study is necessary. The prefeasibility study evaluates the likelihood of success of potential restructurings, 

buyouts and other initiatives. Experts generally find that once a decision is made 

to explore options for keeping a worksite open and funding is secured for a pre-feasibility study, 4 to 6 weeks is necessary for the study to be completed.17 If viable, 6 

months or more is required to complete a restructuring or buyout. Where alternative 

plans for keeping a worksite open are not viable, communities require similar periods of time to develop plans to adjust to the loss of revenue and to develop strategies to stabilize the local economy. 

To provide meaningful opportunities to attain such goals, advance notification periods must be extended. The experiences of other nations may provide a model for 

tiered notification periods to maximize opportunities to keep worksites open and develop stabilization plans. 

Other nations with competitive market economies provide for significantly longer 

advance notification periods without unduly burdening business interests.18 In Canada, Federal law requires 16 weeks of advance notice and the establishment of a 

joint planning committee consisting of workers and employer representatives.19 The 

joint planning committee’s objectives are to examine strategies to avoid the layoffs, 

to plan the transition, and to assist in locating new employment for dislocated workers. Canadian provinces also have advance notice laws that often provide tiered notification periods. Tiered notification periods typically provide advance notification periods ranging from 8 to 16 weeks, depending upon the particular circumstances of the 

layoff. The United Kingdom also provides for tiered notification ranging from 4 to 

12 weeks and provides for mandatory consultations between workers and employers 

before layoffs can occur.20

The tiered notification periods of other nations provide models for more effective 

WARN Act notification. To meaningfully explore opportunities for worksites to remain open and for communities to develop stabilization strategies, decisionmakers 

need longer notification periods. Longer notification periods may be impractical 

under certain conditions that result in mass layoffs and worksite closing. Where job 

loss occurs within the context of long planned business decisions such as relocating 

operations to new locations or as the result of a plant or product’s obsolescence, 

longer notification periods are most appropriate. 

The WARN Act should be amended to provide advance notice of 120 days to allow 

fair opportunities for workers to successfully plan for and transition to new employment and should provide longer tiered notification periods based on the underlying 

business reasons for the job losses to allow communities fair opportunities to keep 

worksites open and to develop stabilization strategies. 

2. Close Coverage Gaps By Reducing The Threshold For Covered Worksites And Reducing Thresholds That Determine Which Workers Are Entitled To Advance Notice 

In addition to expanding the notification period, the WARN Act’s immediate goals 

are most effectively advanced by amending the act to expand the pool of workers 

entitled to the act’s protections. The GAO’s reports in 1993 and 2003 clearly find 

that the majority of our Nation’s workers do not receive advance notification when 

a worksite closing or mass layoff occurs. 

The GAO’s initial report found that 64 percent of mass layoffs and worksite closures were exempt from the WARN Act’s advance notification requirements.21 In its 

2003 report, the GAO found that 76 percent of mass layoffs and worksite closures 

were exempted from the act.22

The principal reason that workers do not receive advance notification is because 

the act’s thresholds too frequently exempt employers from the acts requirements. 

The pool of covered workers can be readily expanded by lowering thresholds that 

19 

determine which employers are required to give advance notice and that determine 

which workers are entitled to advance notice during a mass layoff or worksite closing. 

Presently, the WARN Act only applies to businesses employing 100 or more fulltime workers. The WARN Act then sets additional thresholds. No advance notification is required if a worksite closing or mass layoff does not result in the loss of 

at least 50 full-time workers at a single worksite. Moreover, if less than 500 fulltime workers are laid off and the worksite does not close, then the number of laid 

off employees must equal or exceed 33 percent of the total workforce at the site before advance notification is required. 

These thresholds artificially exclude many workers and communities from receiving notice despite their suffering and the effects of a large scale loss of employment 

at a single worksite. Worker and community need for advance notification under 

such circumstances however remains identical to those covered by the act. 

The thresholds are too often blind to the realities of the modern workplace where 

many large employers have sought the flexibility of creative governance structures 

and alternative staffing arrangements. The 100 full-time employees, 50 affected 

workers, and 33 percent of the workforce requirements do not serve intended purposes to exempt small employers or exempt small workforce reductions. Corporate 

subsidiary and contracting structures, part-time staffing, contingent worker staffing, 

and other strategies allow multinational corporations and other large employers to 

avoid the requirements of the WARN Act. 

The experience of workers at Raydon Corporation in Daytona Beach, FL, at Bock 

USA in Connecticut, and at Mortgage IT locations in Ohio and Texas illustrate the 

injustices of the present thresholds. 

Raydon Corporation provides simulation training products to private industry, 

governments, the U.S. military, and other employers throughout the country. In August 2007, the company began a restructuring program by suddenly and without notice calling employees into meetings. At the group meetings, workers were informed 

that they had a matter of hours to clear out their desks and vacate the property. 

Ninety-five employees lost their jobs in the mass layoff. The company, however, escaped WARN Act advance notification requirements by laying off approximately 32 

percent of the site’s workforce and thereby did not meet the 33 percent threshold. 

Within 2 months of the layoffs, Raydon approached local government officials seeking tax abatements to construct a new facility in the city along with the uncertain 

promise of adding new jobs sometime in the future. 

Bock USA is a subsidiary of a German multinational corporation that once operated a manufacturing facility in Monroe, CT. In August 2007, Bock USA finalized 

purchase of another company operating in Canada and made the decision to close 

the Monroe facility and relocate operations to Canada. Despite the company’s purchase and relocation plans necessarily requiring substantial advance planning, 70 

workers at the Monroe facility were given less than a month’s notice of their facilities’ closing and State officials may also have not received appropriate notice. Unfortunately, the subsidiary did not appear to have 100 full-time workers and even if 

threshold requirements could be met, a lawsuit by the workers would face substantial obstacles to obtaining representation from the private bar due the limited availability of potential damages. 

Mortgage IT is a subsidiary of the multinational banking concern, Duestche Bank. 

At the beginning of October 2007, Mortgage IT operated from approximately 40 locations throughout the United States. On October 2, 2007, the company slashed approximately 580 jobs at locations across the country. In January 2008, the company 

continued to lay off workers and our Law Center was contacted by workers at locations in Ohio and Texas whose worksites had been closed. The worksites however 

employed less than 50 employees at each location and so while between 28 and 38 

workers lost their employment at each site, the WARN Act did not provide any protection to these workers. 

The act’s coverage deficiencies are reduced and the goals of the act are better served 

by reform that would: (1) eliminate the 100 full-time employee threshold, reduce the 

number to 50, or include part-time and contingent workers in the number of employees to be counted to meet the threshold; (2) reducing the number of affected employees 

threshold in mass layoffs and worksite closures to 25 workers; (3) aggregate the number of affected employees to include not only those at the principal site but also those 

at other sites whose jobs are lost as a foreseeable result of downsizing at the principal 

site; (4) eliminate the mass layoff threshold requirement that the number of affected 

employees equal or exceed 33 percent of the full-time workforce at the site; (5) increase 

from 90 to 180 days the time period for aggregating the number of affected workers 

in a series of smaller layoffs; and (6) define loss of employment to have occurred after 

20 

23 In theory, the act allows for awards of attorney’s fees and for civil penalties of up to $500 

per day that the employer is in violation of the act. In practice, attorney’s fees are at the discretion of the court and are rarely awarded. Likewise, few if any suits by local governments have 

been initiated and result in an award of civil penalties. No civil penalties can be awarded if 

the employer mitigates damages within 3 weeks of the layoffs or worksite closure. The common 

practice of employers requiring employees to sign a generic waiver of all rights and claims 

against the employer at the time of discharge in exchange for a week or two of severance pay, 

a good job recommendation, or even quick release of final paychecks effectively pre-empts the 

likelihood of actions for civil penalties. 24See Burns v. Stone Forest Industries, Inc., 147 F.3d 1182 (9th Cir. 1998) and Ciarlante v. 

Brown & Williamson Tobacco Corp., 143 F.3d 139 (3d Cir. 1997). 25GAO–03–1003 at p. 17. 

an employee has been laid off for over 2 months rather than the 6 months presently 

required by the statute. 

3. Close Compliance Gaps by Providing Fair Damage Awards to Workers When Their 

Right to Notice is Violated and by Permitting Enforcement Actions by the U.S. 

Department of Labor and State Officials 

The WARN Act is enforced through private lawsuits brought by workers whose 

rights have been violated. A cardinal principle of effective regulation is that the person or group whose rights have been violated should have direct access to courts 

to obtain a remedy. While the WARN Act laudably vests workers with a right to 

a private lawsuit, the act fails to provide effective remedies and further fails to provide an avenue for enforcement by other constituencies whose rights are violated 

when advance notification is not provided. 

Tightly limited available damages under the WARN Act hinders courts’ ability to 

provide an effective remedy to workers who do not receive advance notice. The act 

provides for awards based on a calculation of the employees back pay and the value 

of any benefits for each day that the employer violated the act.23 At most, employers 

will be liable in the amount of 60 days pay and benefits. Judicial decisions have 

struggled to determine whether back pay awards should be calculated on a calendar 

day basis or a work day basis.24 The GAO notes that a work day calculation can 

reduce awards by 30 percent.25 In addition, the act allows courts further discretion 

to arbitrarily reduce any damage award for ‘‘good faith’’ failures to provide advance 

notice to workers. 

The value of potential awards under the statute is inadequate to effectively regulate the conduct of recalcitrant employers. Damage awards in private lawsuits serve 

the dual and equally important functions of compensating the injured party and deterring socially irresponsible conduct. Under the WARN Act, awards are limited to 

compensation for back pay and benefits. However, workers suffer additional injuries 

and damages as the result of violations of the act and should be afforded a full 

range of ‘‘make whole’’ remedies. In the absence of such remedies, the value of damages resulting from the employer’s violation of the act is shifted from the violator 

to the employee. 

The chance of workers recovering damage awards are further undermined by corporate structures and bankruptcy procedures that insulate responsible parties from 

liability. When subsidiaries become insolvent and viable parent corporations remain, 

those corporations should bear liability for debts owed to workers. Likewise, corporate officers and managers who, in bad faith, have violated workers rights to advance notification should bear personal liability for such decisions. 

Moreover, the value of potential awards under the statute is too low to deter future wrongdoing. Potential awards are essentially limited to an amount that the employer would otherwise have paid if the employer had complied with the statute. 

Bad-actor employers can fail to give notice knowing that the dollar value of their 

potential liability is very likely no more than if they had complied. Such employers 

can wait to see if any employees eventually file suit. The employer then gains a financial benefit from violating the act if less than all employees file suit. Such employers obtain a further financial benefit by delaying payment until the end of any 

employee lawsuits. These employers thus gain a financial advantage over good faith 

employers who comply with the act. 

While workers rights are most directly implicated, community rights are also violated when WARN Act notice is not provided. The act requires notice to be provided 

not only to workers but also to State and local government officials. Developed in 

partnership with the U.S. Department of Labor, State rapid response programs are 

charged with assisting dislocated workers. Rapid response workers require advance 

notification to establish programs and outreach not only to individual workers but 

also to mitigate the effects of large scale job loss on the larger community. 

21 

Notice is often not provided to State and local government officials through loopholes in the act which allow employers to simply provide workers with 60 days pay 

in lieu of notice and which allow employers to often compel workers to sign release 

forms at the time of discharge. When this occurs, State workers and local officials 

are compromised in their ability to implement and provide effective transition strategies for the entire community of persons affected by a mass layoff or worksite closing. The act should be strengthened by allowing the U.S. Department of Labor and 

State officials to bring suit on behalf of affected workers. 

Permitting suit by Federal and State attorneys on behalf of workers whose rights 

are violated serves a number of additional important functions. First, such suits 

send a strong message to recalcitrant employers that the government itself has an 

interest in and the will to act to protect workers rights. Second, government lawsuits attract heightened media exposure that is rarely duplicated by private lawsuits. Both functions create additional deterrent effects which private lawsuits alone 

have difficulty achieving. 

Third, government attorneys can often bring lawsuits in cases where the economics of the case may prohibit obtaining representation through the private bar. In a 

WARN Act case, a private law firm must generate awards large enough to compensate the injured workers and pay for the attorney’s costs and for their time spent 

prosecuting the case. Circumstances often prevent the involvement of private attorneys, even in cases where WARN Act rights have clearly been violated. A worksite 

closing in Georgia provides an example. 

Late last year, our offices were contacted by workers from a health care facility 

in Macon, GA. The facility closed facilities affecting 180 workers; however approximately 30 workers received late notice, while the remaining workers received timely 

notice. Despite the violation of the 30 workers’ right to advance notification, the potential damages award, reduced by the amount of notice the workers received, is unlikely to cover the time and expense of a private attorney and still result in a meaningful award to the workers. Amendments to the WARN Act to provide increased 

damage awards and to provide for lawsuits by State officials could provide a remedy 

to future workers who find themselves in similar circumstances. 

The WARN Act should be reformed to provide fair compensation to injured workers 

and to provide an effective deterrence to bad faith employers. In this way, the act’s 

compliance deficits can be addressed by amendments that: (1) permit a full range 

of compensatory damages to workers; (2) provide for parent corporation liability; (3) 

that provide personal liability for directors, officers, or corporate managers who acted 

intentionally or in reckless disregard of employee’s rights; (4) require violators to pay 

double back pay and benefits; (5) eliminate the discretion of courts to reduce awards 

for ‘‘good faith’’ violations; (6) require that attorneys’ fees shall be awarded to prevailing workers; (7) provide for punitive damages against employers who intentionally or recklessly violate the act; (8) permit the U.S. Department of Labor and 

State officials to bring suit on behalf of affected workers; and (9) allow the U.S. Department of Labor and State and local officials to seek injunctive relief to prevent 

a mass layoff or worksite closure when advance notification was not provided and 

when the action will have significant detrimental impact on the local economy and 

the provision of government services. 

4. Eliminate Compelled Waiver of Employer’s Right to Advance Notice 

The compliance gap is further explained by employer practices such as requiring 

employees to sign waivers of claims forms at the time of job separation and by offsetting severance payments against potential damage awards. 

Workers who did not receive advance notification and are facing a sudden loss of 

employment are often confronted with an employer’s express or implied offer to immediately pay their last paycheck, promise to act as a reference on future job applications, and/or a small severance. In exchange, the worker is required to sign a release of claims forms at the time they are laid off or within a couple days thereafter. 

Our Law Center has received innumerable inquiries where employees have been informed of their layoff and, at the same meeting, are presented with and directed 

to sign a release of claims form. 

Under such circumstances, the release is signed under the duress of sudden job 

loss and the need for immediate income and is signed long before workers become 

aware of their rights under the act. 

The act should be amended to provide that: (1) workers’ WARN Act rights cannot 

be waived before or during the advance notification period that was required unless 

they receive payment that meets or exceeds the amount of damages to which the 

worker was otherwise entitled; (2) a worker’s acceptance of severance payments for 

less than the value of the employer’s liability for violating the WARN Act cannot be 

used to offset any portion of a WARN Act damages award; (3) an employee’s waiver 

22 

26 United Paperworkers Intern. Union and Its Local 340 v. Specialty Paperboard, Inc., 999 

F.2d 51 (1993) 27Frymire v. Apex, 61 F.3d 757 (1995). 28 Brewer v. American Power Source, Inc., 517 F. Supp.2d 881 (2007). 

of claims or acceptance of any severance payment does not absolve or mitigate an employer’s obligation to provide notice to government officials; and (4) an employee’s 

waiver of claims or acceptance of any severance payment does not absolve or mitigate 

an employer’s liability in an action brought by government officials for injunctive relief or civil penalties. 

5. Establish a Uniform Statutes of Limitations Period 

Uncertainty also exists under the act regarding the time limitations for workers 

to bring suit and regarding the calculation of damages. Presently, the act does not 

contain a statute of limitations clause stating the time by which workers must bring 

suit. As a result of this omission, the Supreme Court in North Star Steel v. Thomas, 

515 U.S. 29, 115 S. Ct. 1927 (1995) held that the applicable statutes of limitation 

in a WARN Act lawsuit is calculated on a case-by-case basis. In each case, the court 

where the case was filed applies the statute of limitations of the most closely analogous State law claims existing in the State where the lawsuit was filed. This results 

in significant uncertainty for workers in determining the time by which WARN Act 

rights must be asserted. 

For example, workers asserting WARN Act claims in Vermont have been found 

subject to a 6-year statute of limitations period 26 and workers in Colorado have 

been found subject to a 3-year statute of limitation period 27 while workers in Mississippi have been found subject to a 1-year statute of limitation.28 Notably, workers 

and advocates in most jurisdictions have no case law from which to determine a limitations period and as a result, must evaluate and assert claims uninformed what 

limitations period will apply. This uncertainty could be eliminated by a simple provision providing for a 3-year statute of limitations. 

V. CONCLUSION

Large scale job loss exacts potentially devastating effects upon workers, their families and their communities. Mass layoffs and worksite closings can result in lost 

income, incredible personal stress, and the breakup of families. The effects also extend beyond workers and their families and can lead to a ripple effect of business 

closings and deteriorating neighborhoods. Effective government regulation is needed 

to prevent these results. The WARN Act is one component of a web of protection 

guaranteeing our citizen’s human right to social security and social protection when 

job loss occurs. 

WARN Act reform however is long overdue. Gaps in protection, ambiguities in the 

statute’s text, and sometimes massive loopholes result in too few workers being covered by the act’s protections and result in too little compliance by employers. Advance notification is not required in 75 percent of the Nation’s annual mass layoffs 

and worksite closings and even when advance notification is required, 64 percent 

of employers do not provide such notice. 

In the face of economic instability, workers deserve a fair opportunity to plan a 

future for their families and to avoid financial catastrophe. WARN Act coverage and 

compliance deficiencies can and must be improved by amendments to the statute. 

The Sugar Law Center recommends and proposes amendments that will close these 

deficiencies and that will further the intended goals of the statute. We recommend 

amendments to: 

1. Provide advance notice of 120 days and to provide longer tiered-notification periods when mass layoffs occur or worksites close as the result of worksite relocations 

and reasons related to facility or product obsolescence; 

2. Eliminate the 100 full-time employee threshold, reduce the number to 50, or 

include part-time and contingent workers in the number of employees to be counted 

to meet the threshold; 

3. Reducing the number of affected employees threshold to 25 workers for both 

mass layoffs and worksite closures; 

4. Aggregate the number of affected employees to include not only those at the 

principal site but also those at other sites whose jobs are lost as a foreseeable result 

of the downsizing at the principal site; 

5. Eliminate the mass layoff threshold requirement that the number of affected 

employees equal or exceed 33 percent of the full-time workforce at the site; 

6. Increase from 90 to 180 days the time period for aggregating the number of 

affected workers in a series of smaller layoffs; 

23 

7. Define loss of employment to have occurred after an employee has been laid 

off for over 2 months rather than the 6 months presently required by the statute; 

8. Permit for a full range of compensatory damages to workers; 

9. Provide for parent corporation liability when subsidiaries become insolvent; 

10. Provide for personal liability of directors, officers, or corporate managers who 

are found to have acted intentionally or in reckless disregard of employee’s rights; 

11. Require violators to pay double back pay and benefits; 

12. Eliminate the discretion of courts to reduce awards for ‘‘good faith’’ violation 

of the act; 

13. Require that attorneys’ fees shall be awarded to prevailing workers; 

14. Provide for punitive damages against employers who intentionally or recklessly violate the act; 

15. Permit the U.S. Department of Labor and State officials to bring suit on behalf of affected workers; 

16. Allow the U.S. Department of labor and State and local officials to seek injunctive relief to prevent a mass layoff or worksite closure when advance notification was not provided and when the action will have significant detrimental impact 

on the local economy and the provision of government services; 

17. State that WARN Act rights cannot be waived before or during the advance 

notification period that was required unless workers receive payment that meets or 

exceeds the amount of damages to which the worker was entitled under the act; 

18. Provide that a workers’ acceptance of severance payments for less than the 

value of the employer’s liability for violating the WARN Act cannot be used to offset 

any portion of a WARN Act damages award; 

19. Provide that an employee’s waiver of claims or acceptance of any severance 

payment does not absolve or mitigate an employer’s obligation to provide notice to 

government officials; 

20. Provide that an employee’s waiver of claims or acceptance of any severance 

payment does not absolve or mitigate an employer’s liability in an action brought 

by government officials for injunctive relief or civil penalties; and 

21. Provide a uniform 3-year statute of limitations for claims by workers and government officials. 

Senator BROWN. Thank you very much, Mr. Philo. 

Stefan Jan Marculewicz is a principal in the firm’s Baltimore office. Mr. Marculewicz’s experience covers the representation of 

management and employers in all areas of labor and employment 

law. 

Through his national and international practice, he helps large 

and small businesses resolve employment issues ranging from traditional labor law and collective bargaining, employee benefits litigation, international labor law, and labor and employment litigation, including claims currently resulting from the cessation of operations which arise under the WARN Act. 

Mr. Marculewicz is currently a co-chair of the U.S. Chamber of 

Commerce International Labor Law Policy Subcommittee and an 

active member of the U.S. Council for International Business’s 

Labor Policy Committee. 

Welcome, Mr. Marculewicz. 

STATEMENT OF STEFAN JAN MARCULEWICZ, ESQ., 

PRINCIPAL, MILES & STOCKBRIDGE, P.C., BALTIMORE, MD 

Mr. MARCULEWICZ. Thank you, Senator. 

On behalf of the employer community, I truly appreciate having 

this opportunity to testify before you on this important piece of legislation. 

As you indicated, I am a principal in the law firm of Miles & 

Stockbridge in Baltimore, MD. We have offices throughout the 

State of Maryland as well as in Virginia. I represent a client base 

that is diverse. It is diverse both in industry, by size, and for many 

24 

of these clients that operate in different geographic parts of the 

country as well as internationally. 

In addition to large multinational companies, I represent many 

small and mid-sized employers. The companies in these latter sectors serve important roles in the economy and provide a lot of jobs 

to a lot of people. 

Over the nearly 15 years that I have practiced law, I have frequently been called upon to advise my clients about their obligations and responsibilities when they have had to reduce the size of 

their workforce, have made decisions to relocate a facility, or have 

been forced to cease operations altogether. Many of these situations 

require notification of workers, labor organizations, and government officials under the Worker Adjustment Retraining and Notification Act, the statute that is the subject of the proposed amendments you are considering today. 

During the years of my practice of law, I have advised employers 

on virtually every aspect of the WARN Act and have represented 

companies in litigation when they have been sued for allegedly violating the statute as well. Throughout my representation of these 

companies, I have observed several common and recurring themes 

that appear when an employer confronts a situation that will result 

in the layoff of a large number of employees or facility closure. 

These themes are as follows. First, no employer genuinely wants 

to have to lay off a large number of employees or close down facilities. Employers and employees make significant investments in the 

success of their place of employment. No one likes to see that investment lost, which is the inevitable result of a closure or significant downsizing. In short, it is a sign of failure because an employer cannot continue to operate at its present level or at its 

present location. 

To enhance the punitive aspects of the WARN Act will more likely serve to add insult to injury than it will serve to meaningfully 

help those who are dislocated by the closure or the downsizing or 

to prevent job loss in the first place. 

Second, employers want to comply with the WARN Act. It has 

been my experience that unless circumstances exist that are beyond control, employers want to provide their employees as much 

notification as is practicable prior to a layoff or facility closure. 

They want to do this not just because it is the law, but because it 

is right and fair. 

The proposed amendments to the WARN Act would appear to 

seek to remedy a problem that, if it exists, does so only in the exception and the rare exception at that, at least in my personal experience. 

Third, employers would benefit from having additional resources 

available to them to assist those who are soon to lose their jobs 

transition to new opportunities. Under the present scheme, there 

appears to be little in the way of a consistent availability of information or resources for employers to use that would assist their 

employees’ transition to new opportunities. 

Even more importantly, there seems to be little available to other 

employers in the community to enable them to readily take on the 

challenge and additional costs of hiring and retaining the dislocated workers. Even where such information and resources are 

25 

available, in my experience, rarely are they taken advantage of, as 

most employers don’t know where to look for them. 

Fourth, both the WARN and the proposed amendments from the 

Forewarn Act focus on the effects of plant closing and relocations, 

but not on their root causes. There are many root causes of plant 

closings and relocations. They include tax structure, energy and 

transportation costs, the structure of State and local corporate employment laws, the availability of a skilled and educated labor pool, 

and other costs of doing business. 

The United States in general has high labor costs when compared with other parts of the world. That said, employers typically 

maintain their competitive position in the market because of innovation, efficiencies, and their skilled workforce. 

To keep companies from closing plants and relocating operations, 

the atmosphere where they exist must promote that innovation, efficiency, and the creation of that skilled workforce. In short, the atmosphere must be conducive to sustainability and growth. Ultimately, these employers are who create and maintain jobs in this 

country. 

If it were to truly fulfill its mission, the WARN Act would take 

a proactive approach to preventing the job loss in the first place. 

The proposed amendments don’t do that. 

Finally, expansion of the WARN Act as proposed would place a 

significant hardship on small and mid-sized businesses that often 

do not have control over the decision to reduce their workforce or 

curtail their operations. The WARN Act was designed in part to 

soften the impact of a calculated decision to close or downsize a facility in one place and move that work elsewhere. 

In fact, there are many aspects of WARN that do not neatly fit 

into the realities of what happens when an employer is forced to 

cut costs quickly or to close down an operation. Small businesses, 

which are a cornerstone of the American economy, confront many 

obstacles to their success and longevity. Yet small businesses are 

less likely to have available to them the cash reserves or other resources to sustain a workforce even for the 60 days when business 

conditions sour. 

The practical impact of the proposed amendments to the WARN 

Act creates an obligation that has the potential to be very harmful 

to small businesses. In addition to imposing the complexities of the 

statute on small businesses that may not necessarily be equipped 

with the expertise to comply with its nuances, the proposed amendments risk the creation of a punitive legislative scheme for businesses that are often precariously positioned in the first place. 

Not only are they more likely to fail because of their size, but 

they are also less likely to have any control over the timing or the 

manner of that failure. To impose WARN Act notification obligations on these small entities while at the same time increasing the 

notification period and decreasing the size of the qualifying event 

for which notice is required further punishes failure. 

When combined with the double back pay and benefits as damages, the punishment comes in the form of a costly civil litigation 

frequently. In short, the proposed amendments create the potential 

for a perfect storm of factors that could serve to kick a small busiVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00029 Fmt 6633 Sfmt 6601 S:\DOCS\42628.TXT DENISE
26 

ness when it is down instead of helping those who are displaced by 

that business’s failure. 

The proposed amendments to the WARN Act serve to refocus the 

law’s original mission from one that strived to help people adjust 

to the inevitable realities of our global economy to one that punishes those employers that are similarly victims of it. 

The WARN Act should never be considered a punitive statute. 

For anyone who has had to go through the difficulties of having to 

close or significantly downsize a facility, the ordeal is punishment 

enough. WARN should be about the future and about how those 

who are affected by these unfortunate events can adjust and retrain to move on to new opportunities. 

Again, I want to thank you for this opportunity. 

[The prepared statement of Mr. Marculewicz follows:] 

PREPARED STATEMENT OF STEFAN JAN MARCULEWICZ, ESQ. 

INTRODUCTION AND BACKGROUND

On behalf of the employer community, I appreciate having this opportunity to testify before you on this important piece of legislation. My name is Stefan 

Marculewicz. I am a labor attorney with the law firm of Miles & Stockbridge P.C. 

based in Baltimore, Maryland. We have offices throughout the State of Maryland 

and in Virginia. I am a member of my firm’s labor and employment practice group 

where I concentrate my law practice on representing employers in their efforts to 

comply with the laws and regulations that govern the U.S. workplace. 

Given the client base of my firm and its geographic location, I represent clients 

in many different industries, of many different sizes, and that operate in many different geographic regions. In addition to large multi-national companies, I represent 

many small and mid-sized employers. The companies in these latter sectors serve 

important roles in the economy and provide a lot of jobs to a lot of people. 

Over the nearly 15 years that I have practiced labor law, I have frequently been 

called upon to advise my clients about their obligations and responsibilities when 

they have had to reduce the size of their workforce, have made a decision to relocate 

a facility, or have been forced to cease operations altogether. Many of these situations require notification of workers, labor organizations and government officials 

under the Worker Adjustment Retraining and Notification Act (§ ‘‘WARN Act’’ )(29 

U.S.C. § 2101 et seq.), the statute that is the subject of the proposed amendments 

you are considering today. During the years of my practice of law, I have advised 

employers on virtually every aspect of the WARN Act, and have represented companies that have been sued for allegedly violating the WARN Act. 

Throughout my representation of these companies, I have observed several common and recurring themes that appear when an employer confronts a situation that 

will result in the layoff of a large number of employees or facility closure. 

These themes are as follows: 

• First, no employer genuinely wants to have to lay off large numbers of 

employees or close down facilities. Employers and employees make significant 

investments in the success of their place of employment. No one likes to see that 

investment lost, which is the inevitable result of a closure or significant downsizing. 

In short, it is a sign of failure because the employer cannot continue to operate at 

its present level or at its present location. To enhance the punitive aspects of the 

WARN Act will more likely serve to add insult to injury, than it will serve to meaningfully help those who are dislocated by the closure or downsizing, or to prevent 

the job loss in the first place. 

• Second, employers want to comply with the WARN Act. It has been my 

experience, that unless circumstances exist that are beyond control, employers want 

to provide their employees as much notification as is practicable prior to a layoff 

or facility closure. They want to do this, not just because it is the law, but because 

it is right and fair. The proposed amendments to the WARN Act would appear to 

seek to remedy a problem that, if it exists, does so only in the exception, and a rare 

exception at that. 

• Third, employers would benefit from having additional resources available to them to assist those who are soon to lose their jobs transition to 

other opportunities. Under the present scheme, there appears to be little in the 

way of a consistent availability of information or resources for employers to use that 

27 

would assist their employees transition to new opportunities. Even more importantly, there seems to be little available to other employers in the community to enable them to readily take on the challenge and additional costs of hiring and retraining the dislocated workers. Even where such information and resources are 

available, in my experience, rarely are they taken advantage of, as most employers 

don’t know where to look. • Fourth, both WARN and the proposed amendments from the FOREWARN ACT focus on the effects of plant closing and relocations, and not 

on their root causes. There are many root causes of plant closings and relocations. 

They include tax structure, energy and transportation costs, the structure of State 

and local corporate and employment laws, the availability of a skilled and educated 

labor pool, and other costs of doing business. The United States in general has high 

labor costs when compared to other parts of the world. That said, employer’s typically maintain their competitive position in the market because of innovation, efficiencies and their skilled workforce. To keep companies from closing plants and relocating operations, the atmosphere where they exist must promote that innovation, 

efficiency and the creation of a skilled workforce. In short, the atmosphere must be 

conducive to sustainability and growth. Ultimately, these employers are who create 

and maintain jobs. If it were to truly fulfill its mission, the WARN Act would take 

a proactive approach to preventing the job loss in the first place. The proposed 

amendments do not do that. 

• Finally, expansion of the WARN Act as proposed will place a significant 

hardship on small and mid-sized businesses that often do not have control 

over a decision to reduce their workforce or curtail operations. The WARN 

Act, was designed in part to soften the impact of a calculated decision to close or 

downsize a facility in one place and move the work elsewhere. While this may be 

an option for larger employers, it is rarely so for smaller ones. In fact, there are 

many aspects of WARN that do not neatly fit into the realities of what happens 

when an employer is forced to cut costs quickly or close down an operation. Small 

businesses, which are a cornerstone of the American economy, confront many obstacles to their success and longevity. Yet small businesses are less likely to have available cash reserves or other resources to sustain a workforce, even for 60 days, when 

business conditions sour. 

The practical impact of the proposed amendments to the WARN Act creates an 

obligation that has the potential to be very harmful to small businesses. In addition, 

to imposing the complexities of this statute on small businesses that may not necessarily be equipped with the expertise to comply with its nuances, the proposed 

amendments risk the creation of a punitive legislative scheme for businesses that 

are often precariously positioned in the first place. Not only are they more likely 

to fail, but because of their size, they are less likely to have any control over the 

timing and manner of that failure. To impose WARN Act notification obligations on 

these small entities, while at the same time increasing the notification period and 

decreasing the size of the qualifying event for which notice is required, further punishes failure. When combined with double back pay and benefits as damages, the 

punishment comes in the form of costly civil litigation. In short, the proposed 

amendments create the potential for a perfect storm of factors that could serve to 

kick a small business when it is down instead of helping those who are displaced 

by that business’ failure. 

The proposed amendments to the WARN Act serve to refocus the law’s original 

mission from one that strived to help people adjust to the inevitable realities of our 

global economy to one that punishes those employers that are similarly victims of 

it. The WARN Act should never be considered a punitive statute. For anyone who 

has had to go through the difficulties of having to close or significantly downsize 

a facility, the ordeal is punishment enough. WARN should be about the future and 

how those who are affected by these unfortunate events can adjust and retrain to 

move on to new opportunities. 

We would therefore respectfully request that the WARN Act not be amended as 

proposed. 

Again, I would like to thank you again for this opportunity. 

COMMENTS TO PROPOSED AMENDMENTS 

Sec. 2. Amendments to the Worker Adjustment and Retraining Act. 

(a) Definitions.—Reducing the definition of ‘‘employer’’ from 100 employees to 50 

employees. 

Inclusion of this amendment will impact small to mid-sized employers in a negative way. Many of the clients I consider to be small to mid-sized businesses are 

28 

under 100 employees. Fifty employees is not a difficult number to reach for many 

small companies these days. Yet an employer with a mere 50 employees is still very 

vulnerable to the economic forces that determine its future. In many of those cases, 

they have not attained a sufficient size to even warrant having a dedicated human 

resources function. 

One reality of the WARN Act is that once an employer gives notice, often times 

employees flee when they learn that the facility is closing, or that they will be laid 

off. It is usually the best and most skilled of the workforce who flee first because 

they can readily obtain employment elsewhere. In a situation where a small company is in a precarious financial position, it does not truly know whether it will or 

will not close in 60 days. It will know even less its fate in 90 days. 

If a small company is to survive, it needs to retain its best skilled employees to 

help it turn the corner and avoid the closure or layoff at all. True, there are defenses that permit reductions of the notification period, including the faltering company defense and the unforeseen business circumstances defense. However, in every 

situation I have encountered under the WARN Act where an employer seeks to resort to either of these defenses, it has had to do so in the courts. This litigation is 

usually unnecessary, because the defenses were sound, but always costly. Small 

companies should not reasonably be expected to make such a choice. The law should 

not prevent employers from trying to make things work, particularly in the case of 

small employers. Yet reducing the jurisdictional size of the employer and what constitutes a plant closing serves to do just that, and creates the potential for a vicious 

downward spiral that could ultimately facilitate the company’s closure, which no 

legislative scheme should endorse. 

Reducing the size of a ‘‘plant closing’’ as defined in the WARN Act from 50 employees 

to 25 

Reducing the size of a plant closing to 25 will negatively impact small to midsized employers for the very same reason that cutting the jurisdictional size of an 

employer in half for coverage of the statute will negatively impact small to midsized employers. Twenty-five employees is not a difficult number to employ in a facility. 

One cannot lose sight of the original legislative purpose behind the WARN Act 

which was not only to lend retraining and assistance to the dislocated workers, but 

also to assist the communities in which they lived. That is why WARN Notice goes 

to more than just the employees and their labor organization, but it also goes to 

State and municipal government officials. 

Congress originally concluded that a community was impacted by a job loss of 50 

employees. A job loss of half that size, while still significant, has half the impact 

on the community. In a large community, it might go unnoticed to those not directly 

affected. While no one should lightly consider the impact of any job loss on a community, regardless of its size, the impact of a job loss on a community is necessarily 

relative to the size of that job loss. To reduce the size of a plant closing to 25 employees loses sight of the community-based mission of the statute. 

This same reasoning applies to the proposed reduction in the number of laid off 

employees that constitutes a ‘‘mass layoff.’’ 

(b) The Expansion of the WARN Notice Period from 60 to 90 Days. 

From a practical standpoint, it is often very difficult for an employer to predict 

exactly when it is going to cease operations. This is true even with a 60-day notice 

period. To expand the notification period to 90 days augments that uncertainty. 

WARN should exist to encourage the issuance of notice so that the affected individuals have the opportunity to adjust and, if necessary, retrain to re-enter the workforce with relative ease. The shorter notice period provides that encouragement because it is consistent with the economic realities that employers face in their commercial relationships. 

The service contractor sector presents a very good example of how the current notification period already creates significant uncertainties, and how extending that 

time period to 90 days would serve to make things worse. 

In our current economy, there are many businesses that provide services to other 

businesses pursuant to service contracts. Examples of such contractors include information technology, transportation, hospitality, and the like. They have become a 

very significant sector of the economy and employ a lot of people at all socio-economic levels. This sector is also very fertile ground for the development of small and 

mid-sized businesses because it is a relatively easy sector to enter, often requiring 

limited overhead to get started. However, these contractors, and in particular, those 

that one would categorize as small to mid-sized businesses, frequently find themselves at a significant negotiating disadvantage with their customer when they prepare the contract for services. They have little leverage, and often have to agree to 

29 

contract terms presented to them. In so many of these contracts, the customer retains the right to terminate the contract with little or no notice, and for any reason. 

Such a right is usually a term of the contract. 

Through my work in this sector, I have experienced a number of situations where 

a contractor has lost its contract with little or no notice, and the loss of that contract 

has forced the employer to drastically reduce its workforce, or cease operations altogether. There are few mechanisms within WARN to address this reality so that an 

employer can reduce the notification period when it truly does not know it will cease 

operations. This problem would be significantly compounded if an employer were required to give an additional 30 days notice. 

Sections of the statute that permit a reduction of the notice period are very narrow on their face, and have been construed very narrowly by the courts. They include the ‘‘faltering company’’ basis to reduce the notification period [29 U.S.C. 

§ 2102(b)(1)]; the ‘‘unforeseen business circumstances’’ basis [29 U.S.C. 

§ 2102(b)(2)(A)]; and the ‘‘natural disaster’’ basis [29 U.S.C. § 2101(b)(2)(B)]. Indeed, 

even when one of these bases is clearly available to an employer, that employer 

faces the uncertainties of litigation and its enormous expense. On more than one 

occasion, I have been involved in cases where in my personal opinion, the employer 

presented facts that squarely permitted the employer to reduce the notification period using the faltering company or unforeseen business circumstances basis. Yet in 

each of these situations, the employer was sued, and confronted costs and attorneys 

fees that equaled or exceeded the underlying penalty. That problem is only compounded when the statute is expanded to include smaller employers, smaller groups 

of employees to require WARN notice and longer notification periods. 

For the contractors in the business sector I referred to above, the available bases 

to reduce the notice period provide hollow security. The abrupt cancellation of a contract by a customer is often used as an example of the typical ‘‘unforeseen business 

circumstance,’’ justifying a reduction in the notification period. Yet, when there is 

a term in the contract that states the contract can be terminated on no notice, or 

on notice that is less than 60 days, termination of the contract on less than 60 days 

can hardly be considered unforeseen. Similarly, when an employer has an operating 

line of credit and the lender concludes that it is going to cease taking further risk 

and chooses not to extend any further credit, the lender’s contractual right to cease 

to extend credit without notice is often pointed to as a basis for the argument that 

the credit cut off was in fact foreseen. Finally, in another example, I have confronted 

cases where an employer that is in trouble is trying to sell itself to a prospective 

buyer to preserve jobs and that portion of a distressed business which can be 

salvaged. Unfortunately, there is case law in which courts have concluded that the 

attempted sale of a distressed business that ultimately ceases operations does not 

fit into the definition of a faltering company. 29 U.S.C. § 2102(b)(2)(A). 

Reference to Calendar Days 

A clarification of the term ‘‘days’’ to be deemed to mean ‘‘calendar days’’ is a welcome addition to the statute. Although the debate in the courts on the meaning of 

the term day has effectively concluded with the same result as the proposed amendment, the statutory clarification is important. 

(c) Notice to Other Parties and Secretary of Labor. 

While the current scheme for notification of persons other than the affected employees and their representatives would appear to be sufficiently effective, there is 

no reason why notification should not extend to the Secretary of Labor. Such notification may in fact enhance the ability of displaced workers to take advantage of 

available funding for retraining that may not be known to a municipality or statedislocated workers unit. The administrative burden imposed upon employers by the 

additional notice to the Secretary of Labor is minimal when compared to the potential benefit of the notification to the dislocated workers. 

While there exists the potential for a significant upside to the additional notice, 

the contents of that notice are best left to the administrative expertise of the Secretary of Labor under 29 U.S.C. § 2107, and should be identical to the contents presently required for the notice to the state-dislocated workers unit and highest elected 

municipal official. 

(d) Penalty—To expand the penalty to double back pay. 

Expansion of the WARN penalty converts the statute from its original intent into 

one that is punitive. As described above, employers comply with WARN. Those that 

do not are the rare exception, and not the rule. For every case that is published 

there are many that are never filed because the notice has been issued in accordance with the law. 

Employers comply with the statute because it is the right thing to do. Compliance 

does not occur just because there is a penalty associated with non-compliance. A peVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00033 Fmt 6633 Sfmt 6621 S:\DOCS\42628.TXT DENISE
30 

rusal of the available State databases of WARN notices reflects that there is a lot 

of compliance with this law. Moreover, I have yet to encounter a situation in my 

law practice in which an employer that failed to give the full 60 days notice did so 

to intentionally evade their obligations under the statute. As described above, most 

of the time the full notice is not given, it is not given because of circumstances that 

are out of the control of the employer. 

Closure of an operation or a significant layoff of employees is not something any 

employer desires to do. Not only has the employer invested heavily in the workforce 

that is to be affected, an investment that is likely to be lost, but for entities that 

tout their successes and hide their failures, it is simply distasteful. 

To place an additional layer of punishment upon an employer that has had to go 

through the turmoil of ceasing operations or having a mass layoff would seem to 

add insult to injury, without any need to do so. 

Enforcement by Secretary of Labor or State Attorney General 

Conferring enforcement authority upon the Secretary of Labor under WARN in 

general, is not objectionable, particularly as it has been outlined in the proposed 

amendment. However, it would appear unnecessary for several reasons. First, the 

Department of Labor’s resources are limited for enforcement of the laws it is currently charged with enforcing. The authority might not have any true meaning as 

the private right of action under WARN would probably result in few if any enforcement actions by the Department of Labor. Second, the current enforcement scheme 

through the private right of action does not appear to be underutilized or out of the 

reach of the typical affected employee. The plaintiffs’ employment bar is active and 

WARN Act cases are not uncommon when the requirements of the statute are not 

followed. It would therefore seem unnecessary to expand the authority of the Federal and State Governments under WARN because under the present enforcement 

mechanism, it is adequately enforced. 

There are also significant concerns about conferring enforcement authority to 

State attorneys general. WARN is a Federal statutory scheme that should be enforced in a manner that is uniform and consistent nationwide. To centralize enforcement within the U.S. Department of Labor under a single Secretary of Labor furthers that goal. 

However, it is a far different story to confer such authority upon 50 State Attorneys General. To disperse enforcement among 50 different attorneys general creates 

a recipe for an inconsistent and disparate government enforcement of a single law. 

Not only is there a potential for disparity that would result from where such cases 

might fall in the order of prosecutorial priorities, but disparity in enforcement might 

also occur as the result of budgetary restraints that may differ from State to State. 

Moreover, there may be a question of the constitutional authority of the States Attorneys General to prosecute violations of Federal statutes. Accordingly, it would not 

appear to be prudent to confer enforcement authority upon anyone other than the 

U.S. Secretary of Labor. 

(e) Sec. 11. Educational Materials. 

The directive to the Secretary of Labor to make educational materials concerning 

employee rights and employer responsibilities under WARN is not objectionable. 

However, rights and responsibilities are not the only things on which the Secretary 

of Labor should focus attention in terms of providing educational materials. ‘‘Adjustment’’ and ‘‘retraining’’ were key concepts to be promoted by the original WARN Act. 

Those aspects of the statute should be promoted in the same way as the punitive 

aspects of the statute. 

Senator BROWN. Let me start with you, Mr. Aguiar. The day you 

got the call from your supervisor and you were told not to come 

back to work, did you get any notification or any advice? Did they 

tell you anything about the WARN Act at the time? 

Mr. AGUIAR. No, sir. At that time, me and everybody else didn’t 

know anything about it. Like I said, I went to work that morning, 

worked regular, came back at 3 o’clock, no problem. I got that call 

a quarter to six, telling me not to come back. I thought he was joking. I said, ‘‘Oh, I will just go by there tomorrow and chill.’’ He 

said, ‘‘Joe, don’t go by because they closed the doors.’’ 

I did run by the next day, and they had this big chain on the 

gate with a padlock, and that was it. 

31 

Senator BROWN. And your wife was notified the same way, or 

was she still working there at the time? 

Mr. AGUIAR. My wife was home, and she was on vacation like everybody else. Only the maintenance people were working those 2 

weeks. 

Senator BROWN. During that 2-week period? 

Mr. AGUIAR. Yes, and I was one of them. We didn’t know anything. Like I said, everybody else went on vacation on Friday, some 

of them went to Portugal. They went everywhere. Some of them 

didn’t know this when they came back. I guess the families didn’t 

want to tell them what was going on so they could have a good vacation, because if they knew that a week before, maybe they would 

have cancelled their plans. 

Because these are—where I live, there is about 80 percent immigration from Portugal—a lot of people from Portugal, the islands. 

These people don’t have much money, and if they knew that was 

going to happen, a lot of them would not have gone anywhere. 

Senator BROWN. If you had been given 60 days’ or 90 days’ or 120 

days’ notice, if the company had said we are going to close the 

plant 3 months from now, for instance, what would that have 

mattered? How would that have mattered to you? 

Mr. AGUIAR. I would start looking, while still there, to find another job. This way, I would have an opportunity to go everywhere 

to look for a job. I think that is what he should have done, give 

us 60 days’ notice or a week or 2 weeks or whatever. Just let us 

know that you are going to close the doors, not the way they did 

it. I don’t think that is right. 

Senator BROWN. Tell me about some of your fellow workers. Do 

you know roughly maybe the average age? Or what have you seen 

happen to them, or are they finding jobs? Have they left town? 

Have they tried to move on? Are most of them unemployed, or are 

they earning anything close to what they were earning? 

Mr. AGUIAR. Yes, the ages are between 20 and 50, and some of 

them are 60 years old. Those young ones probably—there is a lot 

of work in construction, and that is where all those young people 

are. They go to Boston, Cape, wherever, work on construction. 

The other ones, most of them are in school right now. This school 

that I am at, it has got about 300 people. Some 50-year-olds, 55, 

60s, and they are there because they want to earn that check. 

When it stops, some of them are going to go off and retire, and 

some of them just going to stick around, I guess. 

At that age, believe me, I am over there, and it is very hard at 

that age to learn to get a GED or whatever. There are people there 

that are just there for the money while they give them the check. 

Once the check is given, it’ll be like, ‘‘Have a good day,’’ ‘‘See you 

later.’’ I know that is going to happen. They told me. 

Before I came down yesterday, they said, ‘‘Joe, take a big case 

and bring back the money.’’ All they want is for me to bring back 

the money. I will ask the Senator to give me the money, but he’ll 

say no. 

Senator BROWN. Mr. Liebenow, the CEO, did he ever meet with 

the workers or talk to the workers or make statements, convened 

any meeting of workers or talked individually to supervisors or 

workers that you know of ? 

32 

Mr. AGUIAR. For the past 2, 3 years, I never saw that man come 

around. He did come around every day when the union was trying 

to get into the place, and he was coming by so the union couldn’t 

get in. He was coming by everybody saying, ‘‘Hi, Hi, Hi.’’ ‘‘Don’t get 

the union in here.’’ The union came in, we never saw him again. 

He never came to see us to say anything. 

Senator BROWN. Your 18-year-old son, you did him proud today. 

So, thank you. 

Mr. Marculewicz, how should Mr. Liebenow have done that differently? 

Mr. MARCULEWICZ. Well, I don’t know the specific facts of the circumstances—— 

Senator BROWN. Put your microphone on, please, sir. 

Mr. MARCULEWICZ. Sorry, Senator. I don’t know the specifics of 

the circumstances under which this occurred, but I would—if I recall from Mr. Aguiar’s testimony, this was a 900-person facility? 

My understanding is, that under those sets of circumstances, 

WARN notice should have been given prior to a layoff, and 60 days’ 

notice should have been given. 

My position on that is that this is essentially one of the exceptions that I occasionally see in the cases and rarely confront in my 

day-to-day practice, where somebody actually did not comply with 

the notice obligations. As I testified earlier, I spend a vast majority 

of my time on this statute, advising employers on how to comply 

with the statute and how to do so in a way that is fair and reasonable to the employees. In the vast majority of those circumstances, 

even if there is a question as to whether the WARN Act applies, 

the employers are willing to provide that notice. 

Senator BROWN. If the penalty was double, would that make people like Mr. Liebenow more likely to comply, or those exceptions 

that you cite? 

Mr. MARCULEWICZ. I don’t think so. Because if somebody is not 

willing to comply with the law on the basis of simply a flagrant violation, then they are not going to comply with it whether the penalties are doubled or tripled. 

In fact, the responsible employer, which makes up the vast majority of the companies and the employers in this country, the 60- 

day notice and the alternative penalty is certainly sufficient to ensure compliance, and I don’t believe that a statute should be 

amended to react to the rare exception. 

Senator BROWN. Have you ever represented a company that violated the WARN Act? 

Mr. MARCULEWICZ. I have represented companies that have been 

accused of violating the WARN Act, yes. But I have not represented a company that, in my opinion, in fact, violated the 

WARN Act. 

Senator BROWN. Did a court decide that it had? 

Mr. MARCULEWICZ. No. 

Senator BROWN. Are there specific reforms you would support in 

this bill and amendments to the statute now that would make this 

law work better? That would mean more compliance and more assistance for workers but not be unduly difficult for employers? 

Mr. MARCULEWICZ. I think I mentioned in a couple of the themes 

that I stated to you earlier, Senator, with respect to retraining and 

33 

opportunities for the future. One of the things that I run into when 

I am confronted with this phone call—you know, the bank has cut 

us off. We only have so much time left. We are going to close. What 

do we do? We have to give the notice, and then what can we do 

for our workers? 

Because, again, this is a devastating event for everybody. This is 

not something that the big, bad employer is saying, ‘‘Hey, let us lay 

all these poor workers off.’’ It is a devastating event for everybody 

because the employer lives in those communities as well. 

One of the things that strikes me as odd in this, in my day-today practice is how little information there is with respect to availability of resources for retraining. I also find that it is unusual, and 

I have yet to run into this. 

I had an example in a situation where I remember speaking to 

the client and saying, ‘‘You need to reach out to the State Dislocated Workers Unit.’’ Gave them the number. They reached out 

to them. Unemployment was basically the only option in terms of 

the retraining and such, and I feel that they didn’t know where to 

go and what else they could do to assist their workers in addition 

to giving the notice, the 60-day notice. 

Now, one other point that I want to raise is that on the other 

end, where you have an employer that is in that community where 

there is a group of dislocated workers, there doesn’t appear to be 

a lot of resources available to those employers to take on the challenge of retraining someone. 

I mean, so much of, Mr. Aguiar mentioned earlier, the difficulties 

of a senior employee going and getting a GED, that is true. But 

there is so much on-the-job training and things of that nature that 

could be facilitated by a statute like the WARN Act that, if you 

would, if there was an availability of resources to help employers 

in the surrounding communities retrain those people, I think that 

would be one way to improve the WARN Act. 

Senator BROWN. You made two comments. One in your opening 

testimony where you used the word ‘‘failure,’’ that if a company 

were to close, there is sort of implicit failure somewhere, understandably. Then you said it is a devastating, I believe you used the 

adjective, I think you said ‘‘matter,’’ devastating matter to everyone 

when a plant closes. 

Are those the right words to label a decision—in my old congressional district in Elyria, OH, where York Manufacturing, an air 

conditioning assembly company, the most productive company in 

the entire York corporation—they acknowledged—shut down its 

plant in Elyria, moved some of its production to Wichita and some 

of its production to Mexico. 

I don’t think management probably would have called that a failure or called it devastating for everyone, management, when they 

make a decision like that. Is that a different matter? 

Mr. MARCULEWICZ. Again, I don’t know the specifics of that. 

Senator BROWN. Trust me on what I said. 

Mr. MARCULEWICZ. I believe you, Senator. 

Senator BROWN. OK. 

Mr. MARCULEWICZ. So I can’t speak specifically to that. I can say 

this. That it is—perhaps ‘‘failure’’ is too strong a term for that parVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 S:\DOCS\42628.TXT DENISE
34 

ticular situation, but certainly devastating to the community is an 

appropriate adjective for it. 

Senator BROWN. To the community. 

Mr. MARCULEWICZ. It is because—but think about the communities in which these facilities operate. I mean, everybody is a 

member of that community—the employer, the supervisors, the 

managers, the decisionmakers or the people who are affected by 

those decisions—and I think that is devastating. I think it is the 

reality of that. 

Senator BROWN. Mr. Trumka, your thoughts on my conversation 

just now with Mr. Marculewicz and the questions of particularly 

employer major layoffs or plant shutdowns when they seem to be 

related to trade policy. 

Mr. TRUMKA. It is very, very difficult for us to call it a failure 

for them. It is a major success for them. They end up frequently 

getting major bonuses, things of that sort. It is the workers and, 

he is right, the community that is left behind. 

He and I do agree on one thing at the very least, about the need 

for a proactive approach, and that is why we have called for an extension, a lengthening of time of the notice so that people actually 

have time. People like Joe Aguiar have a chance to spend more 

time training and looking for a job, but the community—the State 

and the local community has more time to plan for the layoff, and 

then they have more time to work to prevent the layoff. That is 

what we think this should be all about, preventing it. 

I found it somewhat amusing when Stefan portrayed some of 

these companies as victims of globalization. The one that you just 

talked about, there are literally thousands, hundreds of thousands 

of others. We have closed 40,000 manufacturing plants in this 

country since the year 2000, many of which have been relocated in 

China and other places. I don’t think they have been victims. I 

think they are the person that creates the victims. 

Senator BROWN. Yes, I talk to several, in my old congressional 

district, manufacturers who would say that they are just playing 

under the rules of globalization. They have no choice. But some of 

those same CEOs were walking the halls of Congress, lobbying for 

PNTR when it passed and other trade agreements that would write 

these rules under which they had to live. An interesting thought 

that way. 

Mr. TRUMKA. Senator, there is a twofold approach there, just as 

it is here. First, the trade laws are also weak, but then our country 

doesn’t enforce those trade laws either. So, countries like China get 

to walk away with currency manipulation and all kinds of other advantages that close plants here. 

The same thing with the WARN Act. It is a weak law that has 

no enforcement mechanism. It can’t be enforced hardly because 

how could Joe Aguiar go out and go after that company when all 

he stands to get back is maybe $300, $400? 

I also take real issue with my friend Stefan there when he says 

that these employers really do want to comply. GAO found that 

only 25 percent of the plant closings and mass layoffs were subject 

to WARN. Of those, only one-third actually did comply. That means 

less than 8 percent of the closures and mass layoffs in the country 

actually comply. 

35 

If he really believes, and I hope he does, that they want to comply, we can put a new provision in this act to give some education 

to those employers and that gives them a little bit of advance notice on what they have to do as well. We could work together on 

things like that. 

Senator BROWN. Mr. Philo, do you think that employers generally know enough about the WARN Act, or do they, as Mr. 

Trumka may have suggested—may not, I am not sure—want to 

evade the WARN Act? Is the education solid enough? Is the notification—is the awareness of the law strong enough? 

Mr. PHILO. That varies. To be honest with you, I mean, I don’t 

represent employers, and so I am trying to read tea leaves many 

times in these cases. I can divide it up. It reflects society. There 

is about a third of the people who don’t know and would have done 

it if they could have, there is a third that didn’t care to know, and 

there is a third who were going to do what they were going to do 

anyway. 

We literally have seen cases—what sticks in my mind, a case we 

saw last year. Where the employer, when he had fired the employee on the day without notice, and that person said, ‘‘What 

about my notice?’’ He said, ‘‘I will give notice to who I want, when 

I want. It is my damn business.’’ 

I don’t mean to suggest that all employers out there are like 

that, but there are employers out there like that. I take issue with 

the idea that somehow increasing penalties will not change behavior. It is a fundamental precept of our law, of the way we regulate, 

of the way we have criminal law. 

Right now, the penalties are roughly the same or cheaper to not 

comply. You get back pay and benefits in the law. That is it. So 

for the bad faith employer, there is no disincentive to just not give 

notice. It defies rational economics. It defies law. You have to make 

it more expensive to do the wrong thing, and that would be not giving notice. Right now, that doesn’t exist. 

Senator BROWN. The back pay is 60 days? 

Mr. PHILO. Limited to 60 days, and then if it is calculated on— 

the courts have struggled with this idea of calendar days and work 

days, with a majority finding that it is work day damages. So that 

reduces that 60 days by roughly 30 percent in most cases. So it is 

just—I mean, it is an incredibly low level of recovery. You need 

masses of people to be able to financially undertake a case. 

You know, one thing that is controversial in our society to talk 

about punitive damages. But punitive damages are awarded for 

bad behavior, for intentionally knowing and doing the wrong thing. 

I think they should be added to the act. I don’t think that is unjust 

or unfair in any sense. 

Senator BROWN. Why is he wrong, Mr. Marculewicz, in your 

mind? 

Mr. MARCULEWICZ. Senator, he is wrong because the individual 

claimant by themselves bringing the claim under WARN is rare. 

Typically, when you have these flagrant violations of WARN Act, 

where you have mass layoffs of 900—facilities of 900 employees 

who were given no WARN notice—the plaintiff ’s employment bar 

is very effective and assisted by organizations similar to Mr. Philo’s 

36 

organization are very capable of advocating on behalf of the dislocated workers. 

Typically, these cases come in the form of class actions or multiple plaintiffs in these cases where it is, in fact, a deterrent because not only is it the deterrent of the penalty, but it is the deterrent of defending the case. 

Senator BROWN. Why is there only 8 percent compliance then? 

Mr. MARCULEWICZ. Why is there 8? 

Senator BROWN. Why is it only 8, if compliance is the—citing Mr. 

Trumka’s figures that 25 percent under the WARN Act and only 

8 percent, one-third of those are won, why is that number so small 

if the penalties or the threat of penalty is great enough to the employer potentially? 

Mr. MARCULEWICZ. Because there are certain exceptions to the 

WARN Act that reduce the amount of time that notice needs to be 

given. There is the faltering company defense. There is the unforeseen business circumstance defense. Those were designed to account for the uncontrollable cessation of operations where the bank 

cuts off the pay, cuts off the line of credit, a contractor terminates 

a contract, or things of that nature. 

Those cases often still get litigated, notwithstanding the fact that 

the defenses are sound and the positions behind—the position of 

the employer in those situations are sound. And for that reason, 

that may be why that percentage is what it is. Again, I haven’t 

studied those numbers. I don’t know specifically. But that is why 

I would have reason to believe that that would be the case. 

Senator BROWN. So those three exceptions—some would say loopholes, some would say exceptions—that you cited account for 92 

percent of the cases? 

Mr. MARCULEWICZ. I wouldn’t say that because I don’t know the 

statistics. 

Senator BROWN. Mr. Philo, your thoughts? 

Mr. PHILO. I would find that incredible if they do. First of all, 

what they do is they allow them to give late notice or a complete 

defense if they do find out at the last minute. In the unforeseeable 

business circumstances, that is not an immediate event. I mean, 

that does excuse—and what I have seen in practice, it excuses the 

employer from giving the full 60 days. Typically, in those situations 

where they do prevail, they have given notice, but it is 37 days. It 

is 20 days. 

Faltering company, the same deal. It is not an excuse to give no 

notice in most circumstances. It is an excuse that allows them to 

give late notice. I couldn’t imagine it accounting for 92 percent of 

the noncompliance that we are seeing. 

Senator BROWN. Mr. Philo, you believe this bill should have exemptions and exceptions for some of the provisions Mr. 

Marculewicz talked about? 

Mr. PHILO. I wouldn’t object to it. I mean, there is the purist in 

me that says no. But on the other hand, the faltering company exception is a fair exception to employers. We have seen circumstances where that has appeared to be legitimate to us. 

The unforeseeable business circumstances, I think that is gamed 

more by employers certainly than the faltering company exception. 

37 

As far as the natural disaster exception, I don’t think anyone would 

have an issue with that. 

Senator BROWN. Mr. Aguiar, when Quaker Fabrics closed, did 

they move operations elsewhere in the United States or overseas? 

Did your jobs directly go somewhere that you are aware of ? 

Mr. AGUIAR. There is a company called Victor Textiles from Can- ada that bought, I heard, $27 million worth of machinery and 

moved about 6 miles away from the old factory, and it is doing production right there. I believe over 150 people already from the old 

Quaker Fabrics are working there already at this new place. 

All the other machinery are, like I said, in skids ready to be 

shipped to China, India, and everywhere else. But, yes, there is a 

factory that bought some of that stuff and is using the old machines. It is called Airport Road, the place that they built. There 

is a big building, 600,000 square feet building, and they are renting 

that, this company from Canada. 

Senator BROWN. Mr. Philo and Mr. Trumka—Mr. Philo, you have 

made some reference to laws in other countries. Can both of you— 

if you know, if you don’t, that is fine—give me some sort of best 

practices that comparable industrial democracies like ours do in 

plant closing, facing plant closing issues like this and their impact 

on communities and workers? 

Mr. Trumka, do you want to take—— 

Mr. TRUMKA. First of all, you don’t have to go internationally. 

There are several States that have already adopted better and 

more effective plant closing laws in the United States that eliminate some of the exceptions. I would like to just comment on for 

a second. Those exceptions should be truly exceptions, narrowly defined, not the rule itself. Actually, getting WARN notice has become the exception in this country. So we need to be careful about 

that. 

But we have several States that have done that—Illinois, California, and two others have reduced the number of people there. 

They have lengthened out the time that you get. They also became 

more proactive. They have State teams in place that move into action as soon as there is a WARN or they get anything, any kind 

of indication, and they move in to do a couple of things. 

One, to set up a safety net to help the workers and then, two, 

to actually move in to try to save the plant. Either to get a buyer 

or financing or some other mechanism to see if that plant can be 

stopped from closing so that the tax base can be saved. Other countries do the same thing. 

Senator BROWN. Mr. Philo, your thoughts on that? 

Mr. PHILO. I would agree with what Mr. Trumka said. I would 

add it is a little difficult comparing other countries, and this is a 

new area for a lot of jurisdictions. So I think the best practice is 

to look at what they are doing and take the better portions of it. 

Something that is interesting, which we see in Canada and we 

see in the United Kingdom, which are closer in comparison to the 

United States, they have mandatory committees that are required 

to be set up as soon as that is announced, that there is going to 

be a mass layoff or worksite closing at some point in the future. 

That committee is made up of all the stakeholders—government 

officials, workers, and the employers’ representatives. It is mandaVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00041 Fmt 6633 Sfmt 6601 S:\DOCS\42628.TXT DENISE
38 

tory that they negotiate and see ways to avoid the layoffs if possible. If it can’t happen, then to bring State workers into the plant 

and to help people transition. 

Particularly in the United Kingdom, you can’t do the mass layoff 

unless you go through that procedure. Canada has government officials monitor the process to see that it is in good faith. I think 

those are important things. I don’t know if that is within the reach 

at this point in the United States, but it is critically important to 

workers to get that sort of help if the layoff is going to occur. 

I think Illinois, New Jersey, they have done a good job of putting 

that right into their legislation, a much more proactive effort to 

help workers transition. 

Senator BROWN. Mr. Trumka, you had one more comment? 

Mr. TRUMKA. Yes. New York is actually considering such a bill 

this week. They will vote on it this week. That will be the fifth 

State. 

Senator BROWN. Thank you all very much. Mr. Trumka, thank 

you. Mr. Aguiar, thank you very much for coming from Massachusetts. Mr. Philo, thank you, and Mr. Marculewicz, thank you very 

much. 

Your comments are, of course, on the record and will be used accordingly, and we hope to move forward on legislation quickly. 

So the committee is adjourned. Thank you. 

[Additional material follows.] 

39 

ADDITIONAL MATERIAL 

PREPARED STATEMENT OF SENATOR CLINTON

I would like to thank Senator Brown for his leadership on the 

WARN Act and for holding this hearing, as well as our witnesses 

for joining the committee today to share their insights into this 

critical issue. 

The WARN Act requires employers to provide 60 days of advance 

notice to employees and State and local officials in the event of a 

mass layoff or a plant closure. When it was passed 20 years ago, 

the act was premised on the idea that advance notice is essential 

to providing workers and their families time to adjust to a loss of 

employment and seek alternative jobs and training. By giving 

workers an opportunity to plan for a layoff, the act not only promotes fundamental fairness to U.S. workers, but it also represents 

smart governance, reducing the need for unemployment benefits 

and enhancing the effectiveness of training programs. 

While the WARN Act sought to achieve a laudable goal, the last 

two decades have made clear that the statute is in need of reform. 

The act fails to cover most layoffs, and the enforcement provisions 

are so weak that those employers it does cover are free to ignore 

the act with near impunity. The most recent GAO report found 

that 24 percent of companies were subject to the WARN Act at all, 

and even those companies only provided notice to their workers in 

36 percent of mass layoffs and plant closures. In 2007, the Toledo 

Blade published a four-part investigation into the WARN Act concluding that the WARN Act ‘‘is so full of loopholes and flaws that 

employers repeatedly skirt it with little or no penalty.’’ 

That is why I am proud to have been an original co-sponsor of 

the FOREWARN Act, legislation introduced by Senator Brown to 

expand and modernize the WARN Act. The act would lengthen the 

notification period from 60 to 90 days, lower the threshold for plant 

closings to 25 employees and for mass layoffs to 100 employees, 

allow the DOL and State Attorneys General to investigate violations and file WARN Act cases on behalf of workers, increase the 

penalties for violations of the WARN Act from back pay to double 

back pay for each day of notice that is not provided, and require 

employers to provide written notification to the Department of 

Labor. 

Our Nation’s economic downturn has taken an enormous toll on 

our workers. Since 2000, more than 40,000 manufacturing facilities 

have shut down. Almost half a million workers have been idled by 

mass lay-offs in the first 3 months of 2008 alone. The losses have 

spread beyond the manufacturing sector to the service sector. Now 

is the time for us to renew our commitment to the workers struggling with the consequences of this economic downturn by restoring 

the promise of this important legislation. 

PREPARED STATEMENT OF SENATOR OBAMA

Mr. Chairman, I started my career on the south side of Chicago 

trying to help people in communities devastated by steel plant closings get back on their feet. One of the things I learned early on, 

and have seen over and over again, is that American workers who 

40 

have committed themselves to their employers expect in return to 

be treated with a modicum of respect and fairness. Failing to give 

workers fair warning of an upcoming plant closing ignores their 

need to prepare for the transition and deprives their community of 

the opportunity to help prevent the closing. 

I know that you have heard the frustration of workers who are 

let go by e-mail the day before a plant closes or are told when they 

come to work that their services are no longer necessary. Many of 

these workers support families that are living from pay check to 

pay check, squeezed by the demands of rising health care costs, the 

declining value of their homes, and wages that have been stagnant 

for decades. It adds insult to injury to close a plant without warning employees. 

There may be no stronger advocate for these workers than Senator Brown, and I thank you for holding this hearing and authoring legislation to strengthen the Worker Adjustment and Retraining and Notification Act (WARN). I fully support your efforts and 

look forward to helping you move the legislation through the process. We must give the WARN Act teeth to ensure that workers are 

not chewed up and spit out without a job or a paycheck. 

When I was a member of the Illinois Senate, I worked to 

strengthen enforcement of the existing WARN Act by requiring the 

Illinois Department of Employment Security to annually notify employers of their responsibilities under the WARN Act. But we must 

act at the Federal level to close the loophole that allows employers 

to disregard the WARN Act without penalty. 

Congress passed the WARN Act in 1988 to give workers and 

communities 2 months’ advance notice to adjust to an impending 

plant closing or layoff. And where employers have complied with 

the law, retraining and other readjustment efforts have a much 

greater chance to succeed than when such programs are rushed 

into place because there was no advance notice of a plant closing. 

But despite the WARN Act, employers have all too often failed to 

provide workers with that vital notice. The GAO has found recently 

that 24 percent of all lay-offs are subject to WARN requirements, 

yet employers provided notice in approximately one-third of these 

situations. And courts have increasingly dismissed lawsuits 

brought by workers who have been unfairly denied notice. 

Senator Brown’s FOREWARN Act would modernize and enhance 

the WARN Act’s protections. I am proud to be a co-sponsor of this 

important legislation. It would reduce the mass layoff figure from 

50 to 25 employees, and reduce the threshold for coverage of firms 

from 100 to 50 employees. The FOREWARN Act would also lengthen the notification period from 60 to 90 days, require employers to 

provide written notification to the Labor Secretary, and increase 

penalties for violations of the WARN Act from back pay to double 

back pay. Finally, the bill authorizes the Labor Department to enforce the law, and permits State attorneys general to pursue claims 

if the Labor Secretary fails to act within 6 months. 

These are long overdue improvements in the law. Workers and 

their communities have a right to know when they are facing a serious risk of a plant closing. Making that information available before the plant closes can, in the best case scenario, help communities come together to prevent the loss and, in the worst case sceVerDate Nov 24 2008 10:06 Dec 11, 2009 Jkt 035165 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 S:\DOCS\42628.TXT DENISE
41 

nario, help workers and communities prepare for the difficult transition to come. Basic fairness and respect for working men and 

women require that we pass the FOREWARN Act. 

[Whereupon, at 11:07 a.m., the hearing was adjourned.] 

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