"Beyond the pale." "Patently illegal."
That's how Sen. Lindsey Graham (R-SC) is describing a move by the Obama administration that not surprisingly came late Friday afternoon. What move? The one where the White House has told defense contractors not to issue layoff notices in November (four days before the election) in preparation for possible budget cuts on Jan 2, which even ABC News calls a move with "political overtones."
According to the WARN (Worker Adjustment and Retraining Notification) Act, contractors are required to give workers a 60 day notice if they are about to be laid off. The across-the-board budget cuts that could happen in January apparently fall under the requirement. But the White House disagrees, and is begging contractors not to do it. In fact, the administration is even promising to pay legal costs if the cuts happen and the companies are sued for not following the law.
In short, Republicans feel the White House is buying off companies to avoid bad press in the 11th hour before the election.
In the spirit of that interpretation and that promise, Lockheed Martin has followed suit. From ABC (emphasis added):
Defense contractor Lockheed Martin heeded a request from the White House today - one with political overtones - and announced it will not issue layoff notices to thousands of employees just days before the November presidential election.
Lockheed, one of the biggest employers in the key battleground state of Virginia, previously warned it would have to issue notices to employees, required by law, due to looming defense cuts set to begin to take effect after Jan. 2 because of the failure of the Joint Select Committee on Deficit Reduction - the so-called Super-committee, which was created to find a way to cut $1.5 trillion from the federal deficit over the next decade.
Such massive layoffs could have threatened Obama's standing in the state he won in 2008 and is hoping to carry again this November.
On Friday, the Obama administration reiterated that federal contractors should not issue notices to workers based on "uncertainty" over the pending $500 billion reduction in Pentagon spending that will occur unless lawmakers can agree on a solution to the budget impasse, negotiations over which will almost definitely not begin until after the election.
Contractors had been planning to send out notices because of the WARN Act - Worker Adjustment and Retraining Notification Act - which according to the Department of Labor requires "most employers with 100 or more employees to provide notification 60 calendar days in advance of plant closings and mass layoffs."
But there's more:
In July the Labor Department issued legal guidance making clear that federal contractors are not required to provide layoff notices 60 days in advance of the potential Jan. 2 sequestration order, and that doing so would be inconsistent with the purpose of the WARN Act.
In Friday's memo, the Office of Management and Budget reiterated that notice, urging agencies' contracting officials and CFOs to "minimize the potential for waste and disruption associated with the issuance of unwarranted layoff notices."
The guidance issued Friday told contractors that if the automatic cuts happen and contractors lay off employees the government will cover certain liability and litigation costs in the event the contractor is later sued because it hadn't provided adequate legal warning to its employees, but only if the contractor abides by the administration's notice and refrains from warning employees now.
That's what led Graham to sound off.
“I will do everything in my power to make sure not one taxpayer dollar is spent reimbursing companies for failure to comply with WARN Act,” he told The Hill on Monday. “That is so beyond the pale — I think it’s patently illegal.”