A warning on state WARN bill

Over the past several months, the New Hampshire Department of Labor has led an effort in the state Legislature to enact a state version of a federal bill known as The WARN Act (Worker Adjustment and Retraining Notification Act).

In essence, this federal legislation requires companies with at least 100 employees to give those employees a 60-day advance notice of impending layoffs.

The intent behind the federal WARN Act is good, but it is often difficult to enforce on a state level. This was evidenced recently in New Hampshire through two high-profile cases in which separate companies – one in Bedford and one in Claremont – egregiously violated the federal WARN Act and thus far have paid little in retribution to their workers, who were literally left in the cold as a result of those companies closing their doors with no notice.

The state Labor Department wants to strengthen its ability to protect workers in such cases by passing Senate Bill 40 – a state version of the federal WARN Act.

As the bill is currently crafted, the balance between protecting New Hampshire’s workers with the need to give businesses and not-for-profit agencies an opportunity to recruit and secure frontline supervisors, managers, investors and board directors is in serious danger.

Why is this? The state Labor Department has decided to insert additional language not included in the federal legislation, which says anyone who holds any sort of management authority over the employees of an entity could be held personally liable if SB 40 were violated.

In other words, this bill could hold frontline supervisors, managers, executives and even board directors liable for any violations, which means that their personal assets could be targeted by the state.

The message this sends to our businesses, and to those considering a move to New Hampshire, is chilling at best. New Hampshire businesses and not-for-profit agencies would suddenly find it difficult to recruit the best supervisors and managers for their companies. They would see board directors resign their positions and find it difficult to replace them.

The ability of New Hampshire companies to acquire venture capital funding would disappear, since venture capitalists typically require some form of management authority or board oversight in return for their investment.

Why would all of this happen? Because any intelligent supervisor, manager or investor, knowing that his or her own personal assets could be held liable in a state court, will not take the risk of legally attaching their name to any company, regardless of its reputation or successful history.

If the bill were to pass in its current form, these retributions would apply to any company or not-for-profit agency with 75 or more employees.

This means more than 1,100 organizations across New Hampshire would immediately be impacted by such legislation, and hundreds more on the cusp of that employee number would find themselves impacted once the economy improves and employment starts increasing again.

We understand and appreciate the intentions of state senators who have signed their name in support of this bill and of our Labor Department. But we respectfully ask them to consider the disastrous implications of passing a bill that lowers the threshold to 75 employees and allows the state to pursue the personal assets of board directors, investors and supervisors. By doing so, we can strike an appropriate balance that serves both our workers and the employers upon which our state economy is built.

J. Christopher Williams is president and chief executive of the Greater Nashua Chamber of Commerce.

Categories: Opinion