II

103D CONGRESS

1ST SESSION S. 1563

To provide assistance to employees who are subject to a plant closing or

mass layoff because their work is transferred to a foreign country that

has low wages or unhealthy working conditions, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 18 (legislative day, OCTOBER 13), 1993

Mr. RIEGLE introduced the following bill; which was read twice and referred

to the Committee on Labor and Human Resources

A BILL

To provide assistance to employees who are subject to a

plant closing or mass layoff because their work is transferred to a foreign country that has low wages or

unhealthy working conditions, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘American Jobs Protec5 tion Act’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds the following:
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1 (1) During the last 2 decades, millions of jobs

2 in the United States have been transferred by busi3 nesses to foreign countries to take advantage of the

4 low wages and lack of labor standards in those coun5 tries.

6 (2) Millions of additional jobs in the United

7 States are at risk of such a transfer during the

8 1990s, particularly if the North American Free

9 Trade Agreement is approved by the Congress.

10 (3) The threat of the transfer of work to low11 wage foreign countries suppresses wages and bene12 fits to workers in the United States and thereby

13 lessens the purchasing power of middle class families

14 in the United States.

15 (4) The transfer of jobs to low-wage foreign

16 countries imposes a severe burden upon the individ17 ual workers who are dislocated by such transfers

18 and the communities that are affected by such

19 transfers.

20 (5) The provision of income, continued health

21 and pension benefits, and job training assistance to

22 such dislocated workers would significantly ease the

23 burdens caused by the transfer of jobs to low-wage

24 foreign countries.
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1 (6) The transfer of jobs to take advantage of

2 the low wages and lack of labor standards in foreign

3 countries is detrimental to the interests of the

4 United States because such transfers are based on

5 the incorrect premise that the employees of busi6 nesses constitute a cost to be lowered and not an

7 asset that should be developed and utilized.

8 (7) The best chance for the United States to

9 meet international competition in the future is to

10 focus on a competitive strategy that emphasizes

11 high-wage, high-skill employment as opposed to em12 ployment that competes internationally on the basis

13 of low wages.

14 (b) PURPOSES.—The purposes of this Act are—

15 (1) to discourage the transfer of work to low16 wage foreign countries; and

17 (2) to require businesses that transfer work to

18 low-wage foreign countries to mitigate the costs of

19 the dislocation to workers and communities subject

20 to that dislocation.

21 SEC. 3. DEFINITIONS.

22 For purposes of this Act, the following definitions

23 apply:

24 (1) AFFECTED EMPLOYEES.—The term ‘‘af25 fected employees’’ means employees who may rea-
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1 sonably be expected to experience an employment

2 loss as a consequence of a proposed plant closing or

3 mass layoff.

4 (2) EMPLOYER.—The term ‘‘employer’’ means

5 any business enterprise that employs—

6 (A) 25 or more employees, excluding part7 time employment; or

8 (B) 25 or more employees who in the ag9 gregate work at least 1,000 hours per week.

10 Such term includes all business entities that have

11 substantial ownership interest, substantial manage12 ment authority or substantial control over the terms

13 and conditions of employment of employees at a site

14 of employment subject to an employment loss.

15 (3) EMPLOYMENT LOSS.—The term ‘‘employ16 ment loss’’ means—

17 (A) an employment termination, other than

18 a discharge for cause, voluntary departure, or

19 retirement;

20 (B) a layoff exceeding 6 months;

21 (C) a reduction in hours of work of more

22 than 50 percent during each month of any 6-

23 month period; or
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1 (D) a reduction in salary of more than 33

2 percent during each month of any 6-month

3 period.

4 (4) GROUP HEALTH PLAN.—The term ‘‘group

5 health plan’’ means an employee welfare benefit plan

6 providing medical care (as defined in section 213(d)

7 of the Internal Revenue Code of 1986) to partici8 pants or beneficiaries or dependents, directly or

9 through insurance, reimbursement, or otherwise.

10 (5) LOCATION ASSISTANCE.—The term ‘‘loca11 tion assistance’’ includes any subsidy, infrastructure

12 development or improvement, tax relief, site prepara13 tion assistance, hiring and training assistance, or

14 other economic benefit offered by a State or unit of

15 local government to induce an employer to locate at,

16 remain at, or expand its operations at a site of em17 ployment within the jurisdiction of such State or po18 litical subdivision.

19 (6) MASS LAYOFF.—The term ‘‘mass layoff’’

20 means a reduction in force that—

21 (A) is not the result of a plant closing; and

22 (B) results in an employment loss at a sin23 gle site of employment, or one or more facilities

24 or operating units within a single site of em25 ployment, during any 30-day period for at least
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1 12 employees (excluding any part-time employ2 ees).

3 (7) PART-TIME EMPLOYEE.—The term ‘‘part4 time employee’’ means an employee who is employed

5 for an average of fewer than 20 hours per week or

6 who has been employed for fewer than 6 of the 12

7 months preceding the date on which notice is re8 quired.

9 (8) PLANT CLOSING.—The term ‘‘plant closing’’

10 means the permanent or temporary shutdown of a

11 single site of employment, or one or more facilities

12 or operating units within a single site of employ13 ment, if the shutdown results in an employment loss

14 at the single site of employment during any 30-day

15 period for 12 or more employees, excluding part-time

16 employees.

17 (9) SECRETARY.—The term ‘‘Secretary’’ means

18 the Secretary of Labor.

19 (10) SITE OF EMPLOYMENT.—The term ‘‘site

20 of employment’’ means any factory, mine, business

21 office, facility, or other operating unit, or the func22 tional equivalent thereof.
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1 SEC. 4. LIMITATION ON WORK TRANSFER TO LOW-WAGE

2 FOREIGN COUNTRIES.

3 (a) IN GENERAL.—An employer may not implement

4 a plant closing or mass layoff at a site of employment due

5 to a transfer of work to a low-wage foreign country which

6 occurs 1 year before or after such closing or mass layoff

7 (as described in subsection (b)) unless the employer pro8 vides notice at least 180 days before such closing or mass

9 layoff in accordance with section 5 and provides benefits

10 to employees in accordance with section 6.

11 (b) TRANSFER OF WORK DESCRIBED.—

12 (1) IN GENERAL.—Except as provided in para13 graph (2), work shall be considered to be transferred

14 to a low-wage foreign country for purposes of sub15 section (a) if the employer—

16 (A) increases the amount of work per17 formed at one or more sites of employment in

18 one or more low-wage foreign countries and

19 such work is substantially similar to the work

20 performed at the site of employment referred to

21 in subsection (a); or

22 (B) increases the amount of products or

23 services that are imported from one or more

24 low-wage foreign countries and such products

25 or services are substantially similar to the prod-
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1 ucts or services produced or provided at the site

2 of employment referred to in subsection (a).

3 (2) EXCEPTION.—If an employer who orders a

4 plant closing or mass layoff at a site of employment

5 referred to in subsection (a) proves that the increase

6 in—

7 (A) work (described in paragraph (1)(A))

8 that is performed in a low-wage foreign coun9 try; or

10 (B) products or services (described in

11 paragraph (1)(B)) that are imported to the

12 United States from a low-wage foreign country,

13 is not related to the plant closing or mass layoff at

14 such site of employment, the employer shall not be

15 required to provide notice in accordance with section

16 5 or benefits to the employees in accordance with

17 section 6.

18 (3) CONSTRUCTION.—For purposes of para19 graph (1), if an increase described in such para20 graph is carried out by any person that owns at

21 least 10 percent of an employer described in sub22 section (a) or by any person, 10 percent of which is

23 owned by such employer, such employer shall be con24 sidered to have carried out such increase.
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1 (c) PUBLICATION IN THE FEDERAL REGISTER.—The

2 Secretary shall publish annually in the Federal Register

3 the name of each low-wage foreign country as defined in

4 subsection (d), as determined under regulations developed

5 by the Secretary.

6 (d) LOW-WAGE FOREIGN COUNTRY DEFINED.—For

7 purposes of this section, the term ‘‘low-wage foreign coun8 try’’ means—

9 (1) a country in which the average wage is less

10 than 50 percent of the average wage in the United

11 States, as determined by the Secretary; or

12 (2) a country in which the employment stand13 ards relating to the payment of overtime compensa14 tion, child labor, or employee safety and health that

15 are in effect and enforced in such country are sub16 stantially less effective than the standards under the

17 Fair Labor Standards Act of 1938 (29 U.S.C. 201

18 et seq.) and the Occupational Safety and Health Act

19 of 1970 (29 U.S.C. 651 et seq.), as determined by

20 the Secretary.

21 SEC. 5. NOTICE REQUIREMENTS.

22 (a) IN GENERAL.—

23 (1) RECIPIENTS OF NOTICE.—An employer who

24 implements a plant closing or mass layoff subject to
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1 section 4 shall provide written notice of such closing

2 or mass layoff—

3 (A) to each representative of the affected

4 employees as of the time of the notice or, if

5 there is no such representative at that time, to

6 each affected employee; and

7 (B) to the State dislocated worker unit

8 (designated or created under title III of the Job

9 Training Partnership Act (29 U.S.C. 1651 et

10 seq.)) and the chief elected official of the unit

11 of local government within which such closing

12 or layoff is to occur.

13 (2) SPECIAL RULE FOR RECIPIENTS.—If there

14 is more than one such unit of local government, the

15 unit of local government that the employer shall no16 tify is the unit of local government to which the em17 ployer pays the highest taxes for the year preceding

18 the year for which the determination is made.

19 (b) CONTENTS OF NOTICE.—The notice required

20 under subsection (a) shall include a statement of—

21 (1) the nature of the site of employment at

22 which the plant closing or mass layoff is to be un23 dertaken;

24 (2) the reasons for undertaking such plant clos25 ing or mass layoff;
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1 (3) any alternative to undertaking such plant

2 closing or mass layoff;

3 (4) any request made by the employer to a

4 State or unit of general local government for loca5 tion assistance to avoid such plant closing or mass

6 layoff with respect to such site of employment;

7 (5) the estimated extent of the employment loss

8 within the employer that will result from such plant

9 closing or mass layoff;

10 (6) any plan to minimize the effects of such

11 plant closing or mass layoff on employees at such

12 site of employment and on any unit of local govern13 ment having jurisdiction over the geographical area

14 in which the site of employment is located;

15 (7) the economic circumstances of such site of

16 employment, including the level of profitability of op17 erations at the site of employment, and any plans

18 for future investment, employment, and production

19 at the site of employment;

20 (8) the economic circumstances of the employer

21 and the feasibility of transferring employees affected

22 by such plant closing or mass layoff to other sites

23 of employment of the employer; and
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1 (9) the names and addresses of all employees

2 who will suffer an employment loss as a result of

3 such plant closing or mass layoff.

4 SEC. 6. EMPLOYEE BENEFITS.

5 (a) IN GENERAL.—An employer shall provide the fol6 lowing benefits to each employee who suffers an employ7 ment loss due to a plant closing or mass layoff subject

8 to section 4:

9 (1) SEVERANCE PAY.—Severance pay equal to

10 the product of—

11 (A) the amount equal to 4 weeks wages of

12 the employee, calculated at the average wage

13 that the employee received in the final 26 weeks

14 of employment with the employer; and

15 (B) the number of years the employee was

16 employed by the employer.

17 (2) HEALTH CARE BENEFITS.—Continuation of

18 benefits under the same terms and conditions of a

19 group health plan previously provided to the em20 ployee for the period ending 18 months after the

21 date of the plant closing or mass layoff.

22 (3) REIMBURSEMENT FOR RETRAINING AND

23 RELATED EXPENSES.—Reimbursement (not to ex24 ceed $10,000) for retraining, job search, and reloca25 tion expenses incurred during the period ending 2
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1 years after the date of the notice of the plant closing

2 or mass layoff.

3 (4) TRAINING INCENTIVE PAYMENTS.—Incen4 tive payments equal to 25 percent of 1 week’s wages

5 of the employee (calculated in accordance with para6 graph (1)(A)) for each week during which the em7 ployee participates in a job training program during

8 the period ending 2 years after the date of the notice

9 of the plant closing or mass layoff.

10 (5) RETIREMENT BENEFITS.—In any case in

11 which, as of the date of the plant closing or mass

12 layoff, the employee is a participant in an employee

13 pension benefit plan (as defined in section 3(2) of

14 the Employee Retirement Income Security Act of

15 1974 (29 U.S.C. 1002(2))) and has attained an age

16 that is at or above 5 years before early or normal

17 retirement age (as defined in section 3(24) of such

18 Act (29 U.S.C. 1002(24)) under the plan, benefits

19 that are the actuarial equivalent of benefit accruals

20 that would occur under the plan if the employee had

21 continued in full-time service under the plan for 5

22 years after such date at the same rate of pay and

23 had made all required contributions for such period.

24 (b) ESTABLISHMENT OF EMPLOYEE ACCOUNT.—
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1 (1) IN GENERAL.—An employer who imple2 ments a plant closing or mass layoff subject to sec3 tion 4 shall establish an employee benefit account

4 into which the employer shall make payments suffi5 cient to fund the amount of the benefits to be pro6 vided under subsection (a).

7 (2) MANAGEMENT OF ACCOUNT.—The account

8 established under paragraph (1) shall be managed

9 by 5 individuals, of whom—

10 (A) 2 individuals shall be selected by the

11 employer;

12 (B) 2 individuals shall be selected by the

13 affected employees; and

14 (C) 1 individual shall be selected by the 4

15 individuals referred to in subparagraphs (A)

16 and (B).

17 (3) REGULATIONS.—The Secretary shall pro18 mulgate regulations with respect to the establish19 ment and management of accounts under this sub20 section.

21 SEC. 7. RESTRICTION ON EMPLOYER TO ENTER INTO CON22 TRACT WITH THE UNITED STATES FOR FAIL23 URE TO PROVIDE NOTICE OR BENEFITS.

24 (a) IN GENERAL.—Except as provided in subsection

25 (b), an employer who implements a plant closing or mass
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1 layoff subject to section 4 and does not provide the notice

2 or benefits in accordance with section 5 or 6, respectively,

3 may not enter into a contract with the United States for

4 the provision of products or services that were involved

5 in the work transfer described in section 4 or that are

6 substantially similar to such products or services.

7 (b) NATIONAL SECURITY WAIVER.—The Secretary,

8 in consultation with the head of the appropriate Federal

9 agency to which the proposed contract relates, may waive

10 the restriction described in subsection (a) with respect to

11 an employer if the employer demonstrates that such re12 striction would threaten the national security of the

13 United States.

14 SEC. 8. INVESTIGATIVE AUTHORITY.

15 (a) IN GENERAL.—To ensure compliance with this

16 Act, or any regulation issued under this Act, the Sec17 retary, subject to subsection (c), shall have the investiga18 tive authority provided under section 11(a) of the Fair

19 Labor Standards Act of 1938 (29 U.S.C. 211(a)).

20 (b) OBLIGATION TO KEEP AND PRESERVE

21 RECORDS.—An employer shall keep and preserve records

22 in accordance with section 11(c) of the Fair Labor Stand23 ards Act of 1938 (29 U.S.C. 211(c)) and in accordance

24 with regulations issued by the Secretary.
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1 (c) SUBPOENA POWER.—For the purposes of any in2 vestigation provided for in this section, the Secretary shall

3 have the subpoena authority provided for under section

4 9 of the Fair Labor Standards Act of 1938 (29 U.S.C.

5 209).

6 SEC. 9. ENFORCEMENT.

7 (a) CIVIL ACTION BY EMPLOYEES.—

8 (1) LIABILITY.—An employer who implements

9 a plant closing or mass layoff in violation of section

10 4 shall be liable to each employee who suffers an

11 employment loss due to such closing or mass lay12 off—

13 (A) for damages equal to—

14 (i) the amount of any wages, salary,

15 employment benefits, or other compensa16 tion denied or lost to such employee by

17 reason of the violation;

18 (ii) the interest on the amount de19 scribed in clause (i) calculated at the pre20 vailing rate; and

21 (iii) an additional amount as liq22 uidated damages equal to the sum of the

23 amount described in clause (i) and the in24 terest described in clause (ii), except that

25 if the employer proves to the satisfaction
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1 of the court that the act or omission that

2 violated section 4 was in good faith and

3 that the employer had reasonable grounds

4 for believing that the act or omission was

5 not a violation of such section, such court

6 may, in the discretion of the court, reduce

7 the amount of the liability to the amount

8 and interest determined under clauses (i)

9 and (ii), respectively;

10 (B) for damages equal to any actual mone11 tary loss sustained by the employee as a direct

12 result of the violation, such as the cost of pro13 viding health care; and

14 (C) for such equitable relief as may be ap15 propriate, including employment, reinstatement,

16 and promotion.

17 (2) STANDING.—An action to recover the dam18 ages or equitable relief described in paragraph (1)

19 may be maintained against an employer in any Fed20 eral or State court of competent jurisdiction by any

21 one or more employees who suffer an employment

22 loss due to the closing or mass layoff for and in be23 half of—

24 (A) such employees; or
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1 (B) such employees and other employees

2 similarly situated under the provisions of rule

3 23 of the Federal Rules of Civil Procedure.

4 (3) FEES AND COSTS.—The court in such an

5 action shall, in addition to any judgment awarded to

6 the plaintiff, allow a reasonable attorney’s fee, rea7 sonable expert witness fees, and other costs of the

8 action to be paid by the defendant.

9 (b) ACTION BY STATE AND UNIT OF LOCAL GOVERN10 MENT.—

11 (1) LIABILITY.—An employer who implements

12 a plant closing or mass layoff in violation of section

13 4 shall be liable to the State or unit of local govern14 ment in which the employer is located for damages

15 equal to the difference of—

16 (A) the location assistance provided to the

17 employer by the State or unit of local govern18 ment; and

19 (B) the amount of the benefit, if any,

20 which the State or unit of local government will

21 continue to receive as a result of the provision

22 of such assistance to the employer.

23 (2) STANDING.—An action to recover the dam24 ages described in paragraph (1) may be maintained

25 against any employer in any Federal or State court
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1 of competent jurisdiction by the State or unit of

2 local government described in paragraph (1).

3 (3) FEES AND COSTS.—The court in such an

4 action shall, in addition to any judgment awarded to

5 the plaintiff, allow a reasonable attorney’s fee, rea6 sonable expert witness fees, and other costs of the

7 action to be paid by the defendant.

8 (c) ACTION BY THE SECRETARY.—

9 (1) ADMINISTRATIVE ACTION.—The Secretary

10 shall receive, investigate, and attempt to resolve

11 complaints of violations of section 4 in the same

12 manner that the Secretary receives, investigates, and

13 attempts to resolve complaints of violations of sec14 tions 6 and 7 of the Fair Labor Standards Act of

15 1938 (29 U.S.C. 206 and 207).

16 (2) CIVIL ACTION.—The Secretary may bring

17 an action in any court of competent jurisdiction to

18 recover the damages described in subsection

19 (a)(1)(A) on behalf of each employee who suffers an

20 employment loss due to a plant closing or mass lay21 off in violation of section 4.

22 (3) SUMS RECOVERED.—

23 (A) IN GENERAL.—Any sums recovered by

24 the Secretary on behalf of an employee under

25 paragraph (2) shall be held in a special deposit
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1 account and shall be paid, on order of the Sec2 retary, directly to such employee.

3 (B) UNPAID SUMS.—Any such sums not

4 paid to an employee because of inability to do

5 so within a period of 3 years from the date of

6 recovery by the Secretary shall be credited as

7 an offsetting collection to the appropriations ac8 count of the Secretary of Labor for expenses

9 for the administration of this Act and shall re10 main available to the Secretary until expended.

11 (d) LIMITATION.—

12 (1) IN GENERAL.—An action may be brought

13 under subsection (a), (b), or (c) not later than 3

14 years after the date of the last event constituting the

15 alleged violation for which the action is brought.

16 (2) COMMENCEMENT WITH RESPECT TO ACTION

17 BY SECRETARY.—In determining when an action is

18 commenced by the Secretary under subsection (c)

19 for purposes of paragraph (1), such action shall be

20 considered to be commenced on the date when the

21 complaint is filed.

22 (e) ACTION FOR INJUNCTION BY SECRETARY.—The

23 district courts of the United States shall have jurisdiction,

24 for cause shown, over an action brought by the Secretary

25 to restrain violations of section 4, including actions to re-
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1 strain the withholding of payment of wages, salary, em2 ployment benefits, or other compensation, plus interest,

3 found by the court to be due to employees who suffer an

4 employment loss due to a plant closing or mass layoff in

5 violation of such section.

6 SEC. 10. PROCEDURES IN ADDITION TO OTHER RIGHTS OF

7 EMPLOYEES.

8 The rights and remedies provided to employees under

9 this Act are in addition to, and not in lieu of, any other

10 contractual or statutory rights and remedies of the em11 ployees, and are not intended to alter or affect such rights

12 and remedies, except that the period of notification re13 quired by section 4(a) shall run concurrently with any pe14 riod of notification required by contract or by any other

15 law.

16 SEC. 11. REQUIREMENT OF POSTING OF NOTICE BY EM17 PLOYER AT SITE OF EMPLOYMENT.

18 (a) IN GENERAL.—Each employer shall post and

19 keep posted, in conspicuous places at the site of employ20 ment of the employer where notices to employees and ap21 plicants for employment are customarily posted, a notice,

22 to be prepared or approved by the Secretary, setting forth

23 excerpts from, or summaries of, the pertinent provisions

24 of this Act and information pertaining to the filing of a

25 charge.
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1 (b) PENALTY.—Any employer that willfully violates

2 the requirements described in subsection (a) may be as3 sessed a civil money penalty not to exceed $100 for each

4 separate offense.

5 SEC. 12. EFFECTIVE DATE.

6 This Act shall take effect on the date that is 6

7 months after the date of the enactment of this Act.