An Act Concerning the Duties of Employers in the Case of Mass Employee Termination
Maine Legislature, Session 123, LD 1455
Committee: Labor
Sponsors: BRY ANT, BURNS, CARTER, CLARK, GIFFORD, JACKSON, PINEAU

Legislative Document 
No. 1455 
H.P.1025 
House of Representatives, March 16, 2007 
An Act Concerning the Duties of Employers in the Case of Mass 
Employee Termination 
Reference to the Committee on Labor suggested and ordered printed. 
Presented by Representati ve PATRICK of Rumford. 
Cosponsored by Senator BRY ANT of Oxford and 
17/~ 
/J? 7lltlC~ 
MILLICENT M. MacFARLAND 
Clerk 
Rcpresentati yes: BRYANT of Windham, BURNS of Berwick, CARTER of Bethel, CLARK of 
Millinocket. DRISCOLL of Westbrook, GIFFORD of Lincoln, JACKSON of Allagash, 
PINEAU of Jay. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 26 MRS A c. 37 is enacted to read: 
CHAPTER 37 
MASS TERMINATION NOTIFICATION AND ASSISTANCE 
§3201. Definitions 
As used in this chapter, unless the context indicates otherwise, the following terms 
have the following meanings. 
1. Affected establishment. "Affected establishment" means a single manufacturing, 
mechanical or mercantile establishment, factory, workshop or other place of employment 
that has been in existence for more than 2 years of an employer that intends on 
conducting a mass separation that subjects the employer to the provisions of this chapter. 
"Affected establishment" does not include a temporary construction site. 
2. Affected municipality. "Affected municipality" means a municipality in which 
an affected establishment is located or a municipality that faces substantial loss of tax 
receipts from a mass separation. 
3. Average weekly wage. "Average weekly wage" means the amount obtained by 
dividing an employee's total remuneration received for working at an establishment of an 
employer during the 52-week period preceding the employee's becoming an el igible 
employee by the number of weeks during that period that the employee was employed bv 
that employer. 
4. 
Eligible employee. 
"Eligible employee" means an employee who has been 
employed at an establishment of an employer for at least a year and whose employment is 
terminated as part of a mass separation or who, after receiving a notice under section 
3202, voluntarily leaves the establishment for other employment at less than 60% of the 
average weekly wage that the employee received at the establishment. 
5. 
Employee- organization. "Employee organization" means a labor union, 
association or other employee organization that represents an employee of an affected 
establishment for purposes of collective bargaining or other labor management relations. 
6. Employer. "Employer" means a person, corporation, business or other entity that 
has operated in the State for at least the 2 preceding years before giving notice under 
section 3202 either directly or through another corporation that either owns more than 
50% of the corporation, is more than 50% owned by the corporation or is more than 50% 
owned by another corporation that also owns more than 50% of the corporation and 
employs at least 100 persons at one time for 3 months or longer during the 2 preceding 
years before giving notice under section 3202. A person that has acquired the business of 
an employer is deemed to have operated the business for the time that the employer 
operated the business. "Employer" does not include the State, a political subdivision or 
Page I - 123LR2333(Ol)-1 
an organization exempt from taxation under the United States Internal Revenue Code, 
Section 501. 
7. Mass separation. "Mass separation" means: 
A. The termination of operations by an employer at an affected establishment that 
results or may reasonably be expected to result in a majority of the employees at the 
establishment becoming eligible employees, except at an establishment that closes 
because of seasonal factors by custom of the industry of the establishment; 
B. 
The transfer of a part of an employer's establishment's operation from one 
location to another location 25 or more miles from the first location as measured 
along ordinary commuter routes that results in at least a 20% reduction in the number 
I I 
of employees at the first location; or 
C. An action taken by an employer that reduces the number of employees at the 
emplover's establishment or the total number of employees at all establishments of 
the employer within the State by 15% or more for a period to exceed 3 months, 
except for a reduction at an establishment because of seasonal factors that is 
customary in the industry of the establishment. 
§3202. Notice 
1. 
Procedure. 
An employer shall notify in wntmg the director, all eligible 
employees, each affected municipality and each employee organization at least 12 months 
prior to the commencement of a mass separation of employees. 
The director may 
1 
approve a shorter period of notification upon request of the employer if it is shown by 
clear and convincing evidence that the mass separation of employees could not have been 
foreseen by the employer. Approval of a shorter period of time may not be granted until 
after a public hearing is held in each affected municipality. 
2. Minimum information required. Notification under subsection 1 must include: 
A. The reason for the mass separation; 
B. The number of eligible employees affected, including the amount of wages and 
other compensation paid to the employees during the preceding 2 months; 
C. The names and addresses of all employees who will or are likely to suffer an 
employment or wage loss; 
D. The amount of state and local taxes paid by the employer during the preceding 
year and the anticipated impact of the mass separation on those tax payments for the 
subsequent 2 tax years; 
E. The economic circumstances of the employer, including the level or profitability 
of operations and any plans for future investment, employment and production either 
in an affected municipality or at another location; and 
F. Other information as required by rule by the director. 
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3. Collective bargaining agreement; precedence. 
A provIsIon of a collective 
bargaining agreement that requires greater advance notice than required by this section 
takes precedence over the requirements of this section. 
§3203. Severance pay 
1. 
Payments to eligible employees. 
An employer shall pay to each eligible 
employee, at the time the employee becomes eligible, an amount equal to twice the 
employee's average weekly wage multiplied by the number of years and any fractional 
part of a year that the employee worked at the affected establishment, with a minimum 
amount of 5 times the employee's average weekly wage. 
2. 
Continuation of health coverage. 
An employer shall maintain previously 
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existing health benefit coverage for an eligible employee for the earlier of a one-year 
period from the date the employee becomes eligible and the period until the emplovee is 
employed in a position that provides substantially equivalent coverage. 
3. 
Collective bargaining agreement; precedence. A provision of a collective 
bargaining agreement that requires the payment of severance benefits to an eligible 
employee that are greater than the benefits required by this section takes precedence over 
the requirements of this section. 
4. Exceptions. A payment for vacation leave or accrued wages or for a reason other 
than as compensation for a discharge or a layoff is not a severance benefit for the 
purposes of this section. 
§3204. Plant closing assistance fund 
1. Fund established. The plant closing assistance fund, referred to in this chapter as 
"the fund," is established. The fund is administered bv the director for the purposes 
provided in this section. Balances in the fund may not lapse and must be carried forward 
and used for the purposes of this section. The Treasurer of State shall invest unexpended 
money in the fund, and all proceeds of these investments accrue to the fund. 
2. Employer payments. An employer who conducts a mass separation shall pay 
into the fund an amount equal to 15% of the total wages for the previous 12 months of all 
eligible employees. 
3. Waiver. The director may waive a payment required by subsection 2 in whole or 
in part upon request from the employer if the employer shows through clear and 
convincing evidence that the granting of the waiver will: 
A. Prevent the depletion of assets necessary for the employer to make severance 
payments to eligible employees as required by section 3203, subsection I; 
B. 
Prevent the depletion of assets necessary for the employer to continue health 
benefit coverage as required by section 3203, subsection 2; or 
C. Preserve employment within the State. 
I 
A waiver under this subsection may not be granted until after a public hearing has been 
~tgJn. ea~<!ffect~cLmunicipalilY.,._f,. waiv_rrlD_l!st b~ m£!de_ in __ ~J::LtiM,-~tatillfLlP,-e~ea.?.Q~ 
for granting the waiver and be made ilvailableJ.Q_an _~li£,iQ1L~D:!21QY~_.~.!!2lgll~ 
organization and affected municipalitv. 
4. Authorized payments. The director may authorize payments from the fund for 
the following purposes: 
A. 
To provide emergency tax relief for the purposes of continuing public 
employment where an affected municipality or other political subdivision faces 
substantial loss of tax receipts from a mass separation; 
B. To provide technical assistance in conjunction with the Depa11ment of Economic 
and Community Development or any other appropriate public or private agency, 
including assistance in securing grants and loans to organizations for planning, 
starting organizations and arranging long-term financing for the purchase and 
continued operation of an affected establishment; and 
C. The administration of the fund. 
§3205. Mitigation of liability 
An employer is not liable for payments under section 3203, subsection 
or section 
3204, subsection 2 for a mass separation at an employer's affected establishment that is 
necessitated by a physical calamity, such as a fire, flood or other natural disaster. 
§3206. Other obligations of affected establishments 
1. 
Offers for sale. In the event of an intended plant closure related to a mass 
separation, the o\vner of the affected establishment shall make a good faith offer of sale at 
fair market value for a plant equipment and inventory to an interested employee 
organization, private business concern or government-owned or jointly owned business. 
2. No discrimination. An emplover may not discriminate against an employee in 
the terms and conditions of employment as a result of the employee's having reported 
information concerning possible or actual violations of this chapter to the director. 
§3207. Powers of director 
In administering the responsibilities under this chapter, the director may adopt major 
substantive rules pursuant to Title 5, chapter 375, subchapter 2-A and compel the 
I 
attendance of witnesses and the production of any book, paper, file or document. 
§3208. Suits by employees; municipal residents; employee organizations 
1. 
Suits by an employee, municipal resident or employee organization. An 
emplovee, resident of an affected municipality or employee organization affected bv an 
employer's violation of this chapter or a rule or order of the director may bring a civil 
action in the court of competent jurisdiction of the county in which the affected 
municipality is located to enforce the provisions of this chapter. 
Administrative 
procedures need not be exhausted before a cause of action may be brought under this 
section. If a court finds that an employer has failed to provide proper notice pursuant to 
section 3202, the court may enjoin the employer from carrying out the mass separation 
until the employer complies with the provisions ofthis chapter. In addition to a judgment 
awarded to a plaintiff in an action brought under this section, a court may order that the 
plaintiffs reasonable costs and attorney's fees be paid by the defendant. 
2. Suits by the director. The director may supervise a payment and bring a civil 
action in artv court of competent jurisdiction to recover an amount owed under section 
3203, subsection 1 and section 3204, subsection 2. 
A civil action brought under 
subsection 1 terminates upon filing of a civil action under this subsection, unless the 
director dismisses with prejudice the action brought under this subsection. The director 
II 
shall hold a sum recovered on behalf of an employee pursuant to this subsection in a 
special deposit account until the sum is paid over directly to the employee upon order of 
the director. A sum recovered on behalf of an employee under this subsection that the 
director is unable to pay directly to the employee for 3 years after recoverv must be paid 
to the fund. 
§3209. Violation 
A person who knowingly makes a false statement of a material fact or knowingly 
fails to disclose a material fact in an attempt to influence any action or proceeding under 
this chapter commits a Class D crime. 
SUMMARY 
This bill: 
I. Requires employers of at least 100 employees to give a one-year notice of an 
intended mass reduction of employees to the Director of Labor Standards, the employees, 
the affected municipalities and the relevant employee organizations, to give severance 
pay to the employees and to continue the employees' health benefits for up to one year 
after the reduction; 
2. Creates a plant closing assistance fund for technical assistance to keep the plant 
open and reimburse communities for property tax loss, funded by payments from the 
employer; 
3. 
Requires employers to offer the plant that is closing and its equipment and 
inventory for sale at fair market prices to interested employee organizations, private 
business concerns or government-owned or jointly owned businesses; and 
4. Allows an employee, affected municipality, employee organization or the Director 
of Labor Standards to bring an action against an employer who violates the proposed law.