GOP says Obama sending mixed signals to companies on sequester-related layoff warnings

In July, the Department of Labor said it does not believe companies need to adhere to the WARN Act given the "lack of certainty" about the sequester. But in late September, the Office of Management and Budget issued guidance indicating that if government contractors follow Labor's guidance, and then are sued under the WARN Act, the contracting agency will "cover" those contractors.

Kline's Oct. 5 letter says OMB's guidance implies that Labor's guidance could end up getting struck down by courts, because OMB seems to be expecting successful lawsuits against companies that do not give advance warning about layoffs. It also complains that the federal government seems to be ready to pay for the cost of these lawsuits.

"[T]he OMB guidance attempts to incentivize contractors — with taxpayer dollars — to follow the DOL guidance and not issue WARN Act notices in advance of sequestration," they wrote. "This suggests OMB expects a federal court could find a contractor who does not issue sequestration-related WARN Act notices in violation of the law."

The letter said further that the OMB guidance could be interpreted by courts to mean that layoff notices are required, "which could foreclose the DOL guidance from receiving any deference from the courts and fuel WARN Act-related liability and costs for contractors who complied with the DOL guidance — to the detriment of hard-working taxpayers."

On Tuesday, Kline issued a separate statement that again accused the Obama administration off looking to hide the number of job losses that could occur under the sequester in government contractor companies.

"The president is engaged in a desperate campaign to hide the consequences of sequestration from the American people," Kline said. "The most recent evidence is the administration's promise to reimburse the costs employers may face if they follow the Labor Department's misleading WARN Act guidance.

"The Obama administration is telling employers to ignore the law and putting taxpayers on the hook for any resulting legal expenses."

Kline's latest letter, also signed by Rep. Tim Walberg (R-Mich.) and Phil Roe (R-Tenn.), was sent to OMB Acting Director Jeffrey Zients, and asks for all documents related to the development of the OMB guidance on the WARN Act, including all communications between OMB and DOL. It also asks that all of this information be provided by Oct. 19.

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