I

103D CONGRESS

1ST SESSION H. R. 2345

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.

IN THE HOUSE OF REPRESENTATIVES

JUNE 8, 1993

Mr. FORD of Michigan introduced the following bill; which was referred to the

Committee on Education and Labor

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.

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. TABLE OF CONTENTS.

7 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Findings and purposes.
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Sec. 4. Definitions.

Sec. 5. Limitation on work transfer to low wage foreign countries.

Sec. 6. Notice requirements.

Sec. 7. Employee benefits.

Sec. 8. Restriction on employer to enter into contract with the United States

for failure to provide notice or benefits.

Sec. 9. Investigative authority.

Sec. 10. Enforcement.

Sec. 11. Procedures in addition to other rights of employees.

Sec. 12. Requirement of posting of notice by employer at site of employment.

Sec. 13. Effective date.

1 SEC. 3. FINDINGS AND PURPOSES.

2 (a) FINDINGS.—The Congress finds the following:

3 (1) During the last 2 decades millions of jobs

4 in the United States have been transferred by busi5 nesses to foreign countries to take advantage of the

6 low wages and lack of labor standards in those coun7 tries.

8 (2) Millions of additional jobs in the United

9 States are at risk of such a transfer during the

10 1990’s, particularly if the North American Free

11 Trade Agreement is approved by the Congress.

12 (3) The threat of the transfer of work to low

13 wage foreign countries suppresses wages and bene14 fits to workers in the United States and thereby

15 lessens the purchasing power of middle class families

16 in the United States.

17 (4) The transfer of jobs to low wage foreign

18 countries imposes a severe burden upon the individ19 ual workers who are dislocated by such transfers
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1 and the communities which are affected by such

2 transfers.

3 (5) The provision of income, continued health

4 and pension benefits, and job training assistance to

5 such dislocated workers would significantly ease the

6 burdens caused by the transfer of jobs to low wage

7 foreign countries.

8 (6) The transfer of jobs to take advantage of

9 the low wages and lack of labor standards in foreign

10 countries is detrimental to the interests of the Unit11 ed States because such transfers are based on the

12 incorrect premise that the employees of businesses

13 constitute a cost to be lowered and not an asset

14 which should be developed and utilized.

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

16 meet international competition in the future is to

17 focus on a competitive strategy that emphasizes

18 high-wage, high-skill employment as opposed to em19 ployment that competes internationally on the basis

20 of low wages.

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

22 (1) to discourage the transfer of work to low

23 wage foreign countries; and

24 (2) to require businesses that transfer work to

25 low wage foreign countries to mitigate the costs of
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1 the dislocation to workers and communities subject

2 to that dislocation.

3 SEC. 4. DEFINITIONS.

4 For purposes of this Act, the following definitions

5 apply:

6 (1) AFFECTED EMPLOYEES.—The term ‘‘af7 fected employees’’ means employees who may rea8 sonably be expected to experience an employment

9 loss as a consequence of a proposed plant closing or

10 mass layoff.

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

12 any business enterprise that employs—

13 (A) 25 or more employees, excluding part14 time employment; or

15 (B) 25 or more employees who in the ag16 gregate work at least 1,000 hours per week.

17 Such term includes all business entities which have

18 substantial ownership interest, substantial manage19 ment authority or substantial control over the terms

20 and conditions of employment of employees at a site

21 of employment subject to an employment loss.

22 (3) EMPLOYMENT LOSS.—The term ‘‘employ23 ment loss’’ means—
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1 (A) an employment termination, other than

2 a discharge for cause, voluntary departure, or

3 retirement;

4 (B) a layoff exceeding 6 months;

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

6 than 50 percent during each month of any 6-

7 month period; or

8 (D) a reduction in salary of more than 33

9 percent during each month of any 6-month pe10 riod.

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

12 health plan’’ means an employee welfare benefit plan

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

14 of the Internal Revenue Code of 1986) to partici15 pants or beneficiaries or dependents, directly or

16 through insurance, reimbursement, or otherwise.

17 (5) LOCATION ASSISTANCE.—The term ‘‘loca18 tion assistance’’ includes any subsidy, infrastructure

19 development or improvement, tax relief, site prepara20 tion assistance, hiring and training assistance, or

21 other economic benefit offered by a State or unit of

22 local government to induce an employer to locate at,

23 remain at, or expand its operations at a site of em24 ployment within the jurisdiction of such State or po25 litical subdivision.
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1 (6) MASS LAYOFF.—The term ‘‘mass layoff’’

2 means a reduction in force which—

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

4 (B) results in an employment loss at the

5 single site of employment, or 1 or more facili6 ties or operating units within a single site of

7 employment, during any 30-day period for at

8 least 12 employees (excluding any part-time

9 employees).

10 (7) PART-TIME EMPLOYEE.—The term ‘‘part11 time employee’’ means an employee who is employed

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

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

14 months preceding the date on which notice is

15 required.

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

17 means the permanent or temporary shutdown of a

18 single site of employment, or 1 or more facilities or

19 operating units within a single site of employment,

20 if the shutdown results in an employment loss at the

21 single site of employment during any 30-day period

22 for 12 or more employees, excluding part-time

23 employees.

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

25 the Secretary of Labor.
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1 (10) SITE OF EMPLOYMENT.—The term ‘‘site

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

3 office, facility, or other operating unit, or the func4 tional equivalent thereof.

5 SEC. 5. LIMITATION ON WORK TRANSFER TO LOW WAGE

6 FOREIGN COUNTRIES.

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

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

9 to a transfer of work to a low wage foreign country which

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

11 (as described in subsection (b)) unless the employer pro12 vides notice at least 180 days before such closing or mass

13 layoff in accordance with section 6 and provides benefits

14 to employees in accordance with section 7.

15 (b) TRANSFER OF WORK DESCRIBED.—

16 (1) IN GENERAL.—Except as provided in para17 graph (2), work shall be considered to be transferred

18 to a low wage foreign country for purposes of sub19 section (a) if the employer—

20 (A) increases the amount of work per21 formed at 1 or more sites of employment in 1

22 or more low wage foreign countries and such

23 work is substantially similar to the work per24 formed at the site of employment referred to in

25 subsection (a); or
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1 (B) increases the amount of products or

2 services which are imported from 1 or more low

3 wage foreign countries and such products or

4 services are substantially similar to the prod5 ucts or services produced or provided at the site

6 of employment referred to in subsection (a).

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

8 plant closing or mass layoff at a site of employment

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

10 in—

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

12 which is performed in a low wage foreign coun13 try; or

14 (B) products or services described in para15 graph (1)(B) which are imported to the United

16 States from a low wage foreign country,

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

18 such site of employment, the employer shall not be

19 required to provide notice in accordance with section

20 6 or benefits to the employees in accordance with

21 section 7.

22 (3) CONSTRUCTION.—For purposes of para23 graph (1), if an increase described in such para24 graph is carried out by any person which owns at

25 least 10 percent of an employer described in sub-
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1 section (a) or by any person, 10 percent of which is

2 owned by such employer, such employer shall be con3 sidered to have carried out such increase.

4 (c) PUBLICATION IN THE FEDERAL REGISTER.—The

5 Secretary shall publish annually in the Federal Register

6 the name of each low wage foreign country as defined in

7 subsection (d), as determined under regulations developed

8 by the Secretary.

9 (d) LOW WAGE FOREIGN COUNTRY DEFINED.—For

10 purposes of this section, the term ‘‘low wage foreign coun11 try’’ means—

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

13 than 50 percent of the average wage in the United

14 States, as determined by the Secretary; or

15 (2) a country in which the employment stand16 ards relating to the payment of overtime compensa17 tion, child labor, or employee safety and health

18 which are in effect and enforced in such country are

19 substantially less effective than the standards under

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

21 201 et seq.) and the Occupational Safety and Health

22 Act of 1970 (29 U.S.C. 651 et seq.), as determined

23 by the Secretary.
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1 SEC. 6. NOTICE REQUIREMENTS.

2 (a) IN GENERAL.—(1) An employer who implements

3 a plant closing or mass layoff subject to section 5 shall

4 provide written notice of such closing or mass layoff—

5 (A) to each representative of the affected em6 ployees as of the time of the notice or, if there is

7 no such representative at that time, to each affected

8 employee; and

9 (B) to the State dislocated worker unit (des10 ignated or created under title III of the Job Train11 ing Partnership Act (29 U.S.C. 1651 et seq.)) and

12 the chief elected official of the unit of local govern13 ment within which such closing or layoff is to occur.

14 (2) If there is more than 1 such unit of local govern15 ment, the unit of local government which the employer

16 shall notify is the unit of local government to which the

17 employer pays the highest taxes for the year preceding the

18 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 which will result from such

9 plant 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. 7. 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 5:

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 which the employee received in the final 26

14 weeks 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 which 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 which are the actuarial equivalent of benefit accruals

20 which would occur under the plan if the employee

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

22 5 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 5 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. 8. RESTRICTION ON EMPLOYER TO ENTER INTO CON22 TRACT WITH THE UNITED STATES FOR FAIL23 URE TO PROVIDE NOTICE OR BENEFITS.

24 An employer who implements a plant closing or mass

25 layoff subject to section 5 and does not provide the notice
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1 or benefits in accordance with sections 6 or 7, respectively,

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

3 the provision of products or services which were involved

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

5 substantially similar to such products or services.

6 SEC. 9. INVESTIGATIVE AUTHORITY.

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

8 title, or any regulation issued under this title, the Sec9 retary, subject to subsection (c), shall have the investiga10 tive authority provided under section 11(a) of the Fair

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

12 (b) OBLIGATION TO KEEP AND PRESERVE

13 RECORDS.—An employer shall keep and preserve records

14 in accordance with section 11(c) of the Fair Labor Stand15 ards Act of 1938 (29 U.S.C. 211(c)) and in accordance

16 with regulations issued by the Secretary.

17 (c) SUBPOENA POWER.—For the purposes of any in18 vestigation provided for in this section, the Secretary shall

19 have the subpoena authority provided for under section

20 9 of the Fair Labor Standards Act of 1938 (29 U.S.C.

21 209).

22 SEC. 10. ENFORCEMENT.

23 (a) CIVIL ACTION BY EMPLOYEES.—

24 (1) LIABILITY.—An employer who implements

25 a plant closing or mass layoff in violation of section
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1 5 shall be liable to each employee who suffers an

2 employment loss due to such closing or mass lay3 off—

4 (A) for damages equal to—

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

6 employment benefits, or other compensa7 tion denied or lost to such employee by

8 reason of the violation;

9 (ii) the interest on the amount de10 scribed in clause (i) calculated at the pre11 vailing rate; and

12 (iii) an additional amount as liq13 uidated damages equal to the sum of the

14 amount described in clause (i) and the in15 terest described in clause (ii), except that

16 if the employer proves to the satisfaction

17 of the court that the act or omission which

18 violated section 5 was in good faith and

19 that the employer had reasonable grounds

20 for believing that the act or omission was

21 not a violation of such section, such court

22 may, in the discretion of the court, reduce

23 the amount of the liability to the amount

24 and interest determined under clauses (i)

25 and (ii), respectively;
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1 (B) for damages equal to any actual mone2 tary loss sustained by the employee as a direct

3 result of the violation, such as the cost of pro4 viding health care; and

5 (C) for such equitable relief as may be ap6 propriate, including, employment, reinstate7 ment, and promotion.

8 (2) STANDING.—An action to recover the dam9 ages or equitable relief described in paragraph (1)

10 may be maintained against an employer in any Fed11 eral or State court of competent jurisdiction by any

12 1 or more employees who suffer an employment loss

13 due to the closing or mass layoff for and in behalf

14 of—

15 (A) such employees; or

16 (B) such employees and other employees

17 similarly situated under the provisions of Fed18 eral Rule of Civil Procedure 23.

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

20 action shall, in addition to any judgment awarded to

21 the plaintiff, allow a reasonable attorney’s fee, rea22 sonable expert witness fees, and other costs of the

23 action to be paid by the defendant.

24 (b) ACTION BY STATE AND UNIT OF LOCAL GOVERN25 MENT.—
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1 (1) LIABILITY.—An employer who implements

2 a plant closing or mass layoff in violation of section

3 5 shall be liable to the State or unit of local govern4 ment in which the employer is located for damages

5 equal to the difference of—

6 (A) the location assistance provided to the

7 employer by the State or unit of local govern8 ment; and

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

10 which the State or unit of local government will

11 continue to receive as a result of the provision

12 of such assistance to the employer.

13 (2) STANDING.—An action to recover the dam14 ages described in paragraph (1) may be maintained

15 against any employer in any Federal or State court

16 of competent jurisdiction by the State or unit of

17 local government described in paragraph (1).

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

19 action shall, in addition to any judgment awarded to

20 the plaintiff, allow a reasonable attorney’s fee, rea21 sonable expert witness fees, and other costs of the

22 action to be paid by the defendant.

23 (c) ACTION BY THE SECRETARY.—

24 (1) ADMINISTRATIVE ACTION.—The Secretary

25 shall receive, investigate, and attempt to resolve
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1 complaints of violations of section 5 in the same

2 manner that the Secretary receives, investigates, and

3 attempts to resolve complaints of violations of sec4 tions 6 and 7 of the Fair Labor Standards Act of

5 1938 (29 U.S.C. 206 and 207).

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

7 an action in any court of competent jurisdiction to

8 recover the damages described in subsection

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

10 employment loss due to a plant closing or mass lay11 off in violation of section 5.

12 (3) SUMS RECOVERED.—(A) Any sums recov13 ered by the Secretary on behalf of an employee

14 under paragraph (2) shall be held in a special de15 posit account and shall be paid, on order of the Sec16 retary, directly to such employee.

17 (B) Any such sums not paid to an employee be18 cause of inability to do so within a period of 3 years

19 from the date of recovery by the Secretary shall be

20 credited as an offsetting collection to the appropria21 tions account of the Secretary of Labor for expenses

22 for the administration of this title and shall remain

23 available to the Secretary until expended.

24 (d) LIMITATION.—
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1 (1) IN GENERAL.—An action may be brought

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

3 years after the date of the last event constituting the

4 alleged violation for which the action is brought.

5 (2) COMMENCEMENT WITH RESPECT TO ACTION

6 BY SECRETARY.—In determining when an action is

7 commenced by the Secretary under subsection (c)

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

9 considered to be commenced on the date when the

10 complaint is filed.

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

12 district courts of the United States shall have jurisdiction,

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

14 to restrain violations of section 5, including actions to re15 strain the withholding of payment of wages, salary, em16 ployment benefits, or other compensation, plus interest,

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

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

19 violation of such section.

20 SEC. 11. PROCEDURES IN ADDITION TO OTHER RIGHTS OF

21 EMPLOYEES.

22 The rights and remedies provided to employees under

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

24 contractual or statutory rights and remedies of the em25 ployees, and are not intended to alter or affect such rights
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1 and remedies, except that the period of notification re2 quired by section 5(a) shall run concurrently with any pe3 riod of notification required by contract or by any other

4 law.

5 SEC. 12. REQUIREMENT OF POSTING OF NOTICE BY EM6 PLOYER AT SITE OF EMPLOYMENT.

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

8 keep posted, in conspicuous places at the site of employ9 ment of the employer where notices to employees and ap10 plicants for employment are customarily posted, a notice,

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

12 excerpts from, or summaries of, the pertinent provisions

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

14 charge.

15 (b) PENALTY.—Any employer that willfully violates

16 the requirements described in subsection (a) may be as17 sessed a civil money penalty not to exceed $100 for each

18 separate offense.

19 SEC. 13. EFFECTIVE DATE.

20 This Act shall take effect on the date which is 6

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

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