Industry

Sen. Graham: Obama move on defense layoff notices ‘patently illegal’

Sen. Lindsey Graham (R-S.C.) says that he will do anything
he can to block the Obama administration from reimbursing defense contractors
for severance costs if the firms don’t send layoff notices to employees.

The Obama administration issued guidance Friday that said
defense firms’ costs would be covered if they have to layoff workers due to canceled contracts under the across-the-board cuts set to take effect Jan. 2.

{mosads}The layoff notices have become a politically charged issue
because they could have come just four days ahead of the election because of a 60-day
notice required by federal law for mass layoffs.

Graham and other Republicans were livid after the Obama administration issued the guidance on Friday telling contractors that their legal costs would be covered due to canceled contracts under sequestration, but only if they did not issue layoff notices before sequestration occurs — and before the November election.

“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,” Graham told The Hill in a phone interview Monday. “That is so beyond the
pale — I think it’s patently illegal.”


More from The Hill:

♦ Ryan won’t call for Ambassador Rice’s resignation


♦ McCain: All Obama does is ‘announce withdrawals’


♦ After Obama guidance, Lockheed won’t issue layoff notices


♦ UN official: Climate skeptics are losing


♦ Medicare launches pay-for-performance efforts under health law


♦ High court asks DOJ to weigh in on reviving healthcare suit


♦ Aurora victims call for candidates to address gun crime in debate


The guidance prompted Lockheed Martin — which had previously
threatened to send out notices of potential layoffs to all of its 123,000
employees — to say Monday it would not send notices this year under the Worker
Adjustment and Retraining Notification (WARN) Act.

House Armed Services Chairman Buck McKeon (R-Calif.) called
the administration’s guidance “politically motivated memos with dubious
grounding in the law.”

“It appears companies will bow to the threat implicit in
last week’s OMB guidance; withhold notices today or the government might not
cover your court costs down the road. Let me be clear, neither the OMB guidance
nor the Lockheed decision will protect a single defense industry job if
sequestration occurs in January,” McKeon said in a statement.

Graham has been one of the biggest advocates of companies
issuing the layoff notices. He said in July that they should issue them
immediately to raise public concern and force Congress to find a solution to
avert the sequestration cuts.

Graham said Monday he was “very surprised” that Lockheed
decided not to issue the notices, which could have come as early as Wednesday
in states with a 90-day notice requirement.

“This is a complete turnaround,” Graham said. “This reeks of
politics, and quite frankly the legally reasoning being pushed by OMB makes no
sense for me.”

Democrats argue that the contractors’ threats to issue mass
layoff notices just ahead of the election was a political move.

When the Labor Department issued guidance in July saying it
was “inappropriate” to issue the WARN Act notices due to sequestration, House Armed
Services ranking member Adam Smith (D-Wash.) said: “There is no reason to
needlessly alarm hundreds of thousands of workers when there is no way to know
what will happen with sequestration.”

Tags Adam Smith Lindsey Graham
See all Hill.TV See all Video

Most Popular

Load more

Video

See all Video