I
104TH CONGRESS
2D SESSION
H. R. 3369
To provide notice to employees when there are reductions in business
operations, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 30, 1996
Ms. WATERS introduced the following bill; which was referred to the
Committee on Economic and Educational Opportunities
A BILL
To provide notice to employees when there are reductions
in business operations, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. EMPLOYER REDUCTIONS.
(a) IN GENERAL.—An employer planning a reduction
in operations at a workplace shall provide written notice
to all of the following:
(1) All employees of the employer who are em-
ployed at the affected workplace.
(2) The labor organization which represents
those employees for collective bargaining, if such an
organization exists.
(3) The elected officials of the community in
which the affected workplace is located.
(4) The Secretary of Labor.
(b) GIVING OF NOTICE.—The notice required by sub-
section (a) shall be given not less than 3 months before
the actual reduction in operations is effected, unless the
provisions of any bona fide collective bargaining agree-
ment covering the affected workplace requires a longer ad-
vance notification period, in which case the provisions of
the collective bargaining agreement shall take precedence.
(c) NOTICE CONTENT.—The notice required by sub-
section (a) shall contain the following:
(1) The name, location, and nature of the work-
place affected by the planned reduction in oper-
ations.
(2) The reasons for the reduction in operations.
(3) An estimate of the duration of the reduction
in operations.
(4) The number of employees to be affected by
the planned reduction in operations.
(5) A description of rights and benefits relating
to due process, seniority, and severance pay that are
guaranteed to employees under collective bargaining
agreements or the personnel policies of the employer
in the event of a reduction in operations.
(d) APPLICATION.—The notice required by subsection
(a) shall not apply—
(1) if any unforeseen event causes a reduction
in operations;
(2) to reductions in operations resulting solely
from labor disputes;
(3) to reductions in operations that occur in
any of the commercial, industrial, or agricultural en-
terprises operated by a State or any of its political
subdivisions;
(4) to reductions in operations that occur at
construction sites or other workplaces that were
never intended as other than a temporary or sea-
sonal workplace;
(5) to reductions in operations resulting from
seasonal factors that are determined by the Sec-
retary of Labor to be customary in the industry of
which the employer is a part; and
(6) to reductions in operations resulting from
any employer who has filed for bankruptcy in ac-
cordance with Federal bankruptcy laws.
SEC. 2. ACTION BY THE SECRETARY OF LABOR.
When a reduction in operations will result from a
complete workplace closure or relocation, not later than
130 days after receipt of the notice of a reduction in oper-
ations under section 1, the Secretary of Labor, with the
assistance of State agencies as necessary or appropriate,
shall do the following:
(1) Coordinate all State government services for
the alleviation of the economic distress suffered by
displaced workers.
(2) When the reduction in operations will result
from a workplace closure or relocation, complete an
initial study of the feasibility of establishing a com-
munity-owned, employee-owned, or jointly owned
business to continue operations at the workplace.
SEC. 3. ACTION BY EMPLOYER.
An employer planning to effect a reduction in oper-
ations at a workplace, after giving notice of the reduction
in operations as required by section 1, shall do the follow-
ing:
(1) When the reduction in operations is a com-
plete closure or relocation of the workplace, make a
good faith offer of sale at fair market value of the
workplace, equipment, and inventory to the commu-
nity in which the workplace is located, or to an orga-
nization of the employees of the workplace which
singly or in combination attempts to form a commu-
nity-owned, employee-owned, or jointly owned busi-
ness at the workplace to be closed or relocated. Any
offer made under this paragraph shall not be with-
drawn earlier than the 50th day after the commu-
nity and employee organization officials have been
notified in writing by the employer of the assistance
available under section 5.
(2) Sales under paragraph (1) shall be predi-
cated on the continued compliance with the provi-
sions of any bona fide collective bargaining agree-
ment covering the workplace to be closed or relo-
cated. If the collective bargaining agreement at the
workplace to be closed has expired, or will expire
during the 1-year period after notification of the
complete closure or relocation, the prospective buyer
shall agree, as a condition for sale, to bargain in
good faith with employee representatives at the
workplace to be closed.
SEC. 4. REDUCTION IN OPERATIONS IN EFFECT.
When a reduction in operations takes effect, the em-
ployer shall provide a choice of the following benefits to
each affected employee:
(1)(A) Permanent preference rights in hiring
and employment at other workplaces of the employer
and, when the employee accepts employment at an-
other workplace, vacation benefits, and health, wel-
fare, and pension benefits earned while previously
employed by the employer.
(B) Severance pay benefits equal to one week’s
wages for each completed year of service up to the
date of termination, computed on the basis of 40
straight time hours at the employee’s regular wage
rate. A bonus of 1 week of pay shall be paid for each
5 years of service up to the termination date in addi-
tion to 1 week’s pay per year of service up to the
termination date. In no case shall any affected em-
ployee receive severance pay benefits for less than 3
weeks of wages computed on the basis of 40 straight
time hours at the employee’s regular wage rate.
(2) When the employee accepts a transfer to a
workplace of the employer which is 40 miles or more
from the employee’s residence, payment for the
movement of normal household goods, reimburse-
ment for the reasonable one-way transportation
costs for the employee and the employee’s depend-
ents to the new residence, and reimbursement for
reasonable legal fees and other fees and closing costs
associated with purchase or rental of a new resi-
dence up to a maximum of $500.
(3) Employers shall give the affected employees
30 days to choose between the severance pay bene-
fits and preference rights benefits. If, at the end of
30 days, an affected employee has failed to choose
1 of the 2 options, the employer may assign one of
the options to that affected employee.
(4) In all cases of a reduction in operation, the
employer shall maintain a continuation of the em-
ployer’s share of premiums and contributions for
any employee health and insurance benefit plans in
effect at the start of the reduction in operations for
one year, or until the employee becomes eligible for
health and insurance benefits as a result of reem-
ployment, whichever is sooner.
(5) The terms of a lawful collective bargaining
agreement shall prevail over any provision of this
Act with which they conflict.
SEC. 5. TECHNICAL ASSISTANCE.
The Secretary of Labor shall provide the following
technical assistance upon request of employees or commu-
nities adversely affected by reductions in operations:
(1) Conducting informational meetings for em-
ployees, employee organizations, and community or-
ganizations about the advantages and disadvantages
of community-owned businesses and about the serv-
ices and technical assistance available through the
Secretary of Labor.
(2) Evaluation of the feasibility and economic
viability of a proposed community-owned business,
based on the results of the study described in section
2.
(3) Technical assistance as needed to commu-
nity groups.
SEC. 6. ENFORCEMENT.
The Secretary of Labor shall enforce this Act. The
Secretary may issue subpoenas, subpoenas duces tecum,
administer oaths, obtain evidence, and take testimony in
all matters relating to the requirements of this Act.
SEC. 7. PENALTIES.
(a) CIVIL PENALTY.—An employer that fails to pro-
vide notice of a planned reduction in operations as re-
quired under section 1 shall be liable to the United States
for a civil penalty of not more than $1,000 for each af-
fected employee.
(b) CIVIL PENALTY ORDER.—When an order assess-
ing a civil penalty becomes final by operation of law or
on appeal, unless the amount of the penalty is paid within
10 days after the order becomes final, it constitutes a
judgment and may be filed with the county clerk in any
State. The clerk shall thereupon record the name of the
person incurring the penalty and the amount of the pen-
alty in the judgment docket. The penalty provided in the
order so docketed shall become a lien upon the title to
any interest in property owned by the person against
whom the order is entered, and execution may be issued
upon the order in the same manner as execution upon the
judgment of a court of record.
(c) CIVIL ACTIONS AGAINST EMPLOYERS.—(1) Any
employer that fails to provide notice of a planned reduc-
tion in operations as required under section 1 shall be lia-
ble to each aggrieved employee who suffers an employment
loss as a result of such failure for—
(A) back pay for each day of violation at a rate
of compensation not less than the higher of—
(i) the average regular rate received by
such employee during the last 3 years of the
employee’s employment; or
(ii) the final regular rate received by such
employee; and
(B) benefits under an employee benefit plan de-
scribed in section 3(3) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(3)),
including the cost of medical expenses incurred dur-
ing the employment loss which would have been cov-
ered under an employee benefit plan if the employ-
ment loss had not occurred.
Such liability shall be calculated for the period of the viola-
tion, up to a maximum of 60 days, but in no event for
more than one-half the number of days the employee was
employed by the employer.
(2) The amount for which an employer is liable under
paragraph (1) shall be reduced by—
(A) any wages paid by the employer to the em-
ployee for the period of the violation;
(B) any voluntary and unconditional payment
by the employer to the employee that is not required
by any legal obligation; and
(C) any payment by the employer to a third
party or trustee (such as premiums for health bene-
fits or payments to a defined contribution pension
plan) on behalf of and attributable to the employee
for the period of the violation.
In addition, any liability incurred under paragraph (1)
with respect to a defined benefit pension plan may be re-
duced by crediting the employee with service for all pur-
poses under such a plan for the period of the violation.
SEC. 8. DEFINITIONS.
As used in this Act:
(1) The term ‘‘affected employee’’ means any
employee who has been an employee for at least 13
weeks during the preceding 52 weeks at a workplace
and whose employment is terminated by a reduction
in operations at that workplace.
(2) The term ‘‘employer’’ means any business
enterprise that employs 100 or more employees, ex-
cluding part-time employees, or 100 or more employ-
ees who in the aggregate work at least 4000 hours
per week (exclusive of hours of overtime).
(3) The term ‘‘community’’ means, for any par-
ticular employer, the city in which the employer is
located or, if not located in a city, the county in
which the employer is located.
(4) The term ‘‘community-owned business’’
means a business which is either of the following:
(A) At least 51 percent owned by a not-
for-profit corporation established primarily for
the purpose of advancing the economic develop-
ment of the community, as defined in para-
graph (3), provided that the majority of the
members of the controlling board of directors of
the not-for-profit corporation shall be comprised
of elected representatives of the community.
(B) At least 51 percent owned by the city
or county in which the workplace of the em-
ployer is located and which is controlled by the
electorate of the city or county through elected
officials or an elected or appointed board of di-
rectors.
(5) The term ‘‘reductions in operations’’ means
either the transfer of any part of an employer’s op-
eration from one workplace to another existing or
proposed site, or the shutting down of a workplace
or any part of a workplace so as to reduce the num-
ber of employees at the workplace being shut down
or relocated by at least 25 percent or 15 employees,
whichever is greater, over any 3-month period.
(6) The term ‘‘taxing districts’’ means any city,
county, or special district permitted by law to tax
employers with workplaces located within its bound-
aries.
(7) The term ‘‘workplace’’ means any factory,
plant, office, or other facility where an employer has
hired employees to produce goods or provide serv-
ices.
(8) The term ‘‘employee-owned business’’
means a employer owned entirely by the employees
of the employer and controlled by those employees or
by a board of directors selected by those employees.
(9) The term ‘‘jointly-owned business’’ means a
employer owned jointly by a city or county and the
employees of the employer and controlled by a board
of directors selected by the city, county, or employ-
ees.
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