Business groups are warily eyeing bipartisan Senate talks on reauthorizing the Trade Adjustment Assistance program for signs that lawmakers might include a labor-backed proposal to expand employee notification requirements in the event of pending layoffs.
Sen. Sherrod Brown, D-Ohio, last year introduced a bill with the support of his party's two presidential candidates -- Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York -- that would broaden the Worker Adjustment and Retraining Notification Act, or "WARN Act," which became law in 1988 despite President Reagan's veto.
Backers argue the law needs to be expanded to keep up with changing economic circumstances, increasing job losses and loopholes in the existing law.
But business community sources say the measure is so punitive it could significantly dampen their enthusiasm for TAA reauthorization -- even though TAA is considered a pre-requisite for any movement on the Colombia Free Trade Agreement.
"We're picking up increased chatter that the WARN Act could get 60 votes, with Obama and Clinton on board and the possibility that enough moderate Republicans would support it," said one pro-FTA business lobbyist. "The business community supports TAA, no question. But it's going to be awfully hard for the business community to support TAA if that WARN Act stuff gets in there."
Added another business source: "That would be a real big problem for us, and we want to be supportive of TAA."
The WARN Act changes, dubbed the "FOREWARN Act," would increase the notification period for mass layoffs or plant closings from 60 to 90 days.
It would cover plant closings affecting as few as 25 workers, down from 50, and change the definition of a "mass layoff" to 100 workers, down from 500.
Employers are required to provide one day of back pay and benefits for each day under the 60-day window that they failed to notify employees they would be laid off; the Brown bill would double the back pay requirement, while expanding the threshold to 90 days. It would also authorize the Labor Secretary or state attorneys general to bring suit against an employer for violations.
Michael Eastman, Executive Director of Labor Policy at the U.S. Chamber of Commerce, said while the 1988 law has some critics, "most employers have learned to live with it." On the other hand, Brown's bill would "dramatically change" current law to trigger it as a result of "routine personnel actions," he said. "When you get down to 25 employees, that can be a very small percentage of the workforce," Eastman said, noting that the original law's intent was to shield whole communities from the impact of plant closings.
He said the 90 day-notice requirement would be almost impossible to comply with. "Trying to have a business that's competitive and responsive to customer demands, it would be hard to know what's going to happen 60 days out, let alone 90," Eastman said.
Increasing the bill's chances, however, is the fact that the House-passed version of TAA reauthorization contains an amendment by House Education and Labor Chairman George Miller similar to Brown's measure. The White House threatened to veto the underlying measure, and the potential WARN Act amendment was cited in the veto letter.
But the White House did not specifically say it would veto the entire bill over the WARN Act provisions, and some sources speculated that if it was the price of admission for the Colombia trade pact, the administration might be willing to swallow the WARN Act amendments.
Brown in the past has linked TAA and changes to the WARN Act together, saying he has made the case to Senate Finance Chairman Max Baucus that it should be included in TAA reauthorization. An aide to Brown said it was still his goal that the "FOREWARN Act" be part of TAA, but that its attachment to the House version already provides a vehicle in conference.
That could smooth passage of TAA reauthorization on the Senate floor, where Baucus will need 60 votes.
Lobbyists following the issue said Baucus has made clear he wants a "clean" bill without the WARN Act amendments attached. A Baucus aide said getting TAA signed into law was the chairman's "No. 1 trade priority" and that "he is intent on working together with all of his colleagues to make this happen."
On the other hand, inclusion of the "FOREWARN Act," although a top labor priority, would not be enough to get unions on board the Colombia deal.
"Neither WARN nor TAA or any of these small issues is going to do it. They are absolutely needed and welcome, but not as a trade-off for a bad trade policy," said AFL-CIO policy director Thea Lee.
This article appeared in the Saturday, June 7, 2008 edition of National Journal Daily.
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