Why New Hampshire needs WARN

Shortly before Thanksgiving in 2005, workers at Car Component Technologies lived this nightmare. A total of 560 workers in Bedford and Merrimack were out of jobs without warning – no final paycheck, no severance, no health coverage and no ability to collect for medical claims incurred while they were still employed.

The company’s decision to close its doors without notice sent ripples through the local economy but hit hardest the people who had worked the most diligently to make the business profitable – their employees.

To make matters worse, the state was forced to go to Delaware’s bankruptcy court to fight for money the workers were owed. The attorney general’s office and the state Labor Department were largely but not completely successful. The effort was costly to taxpayers and took time to secure results for the laid-off workers.

In another case, an out-of-state venture equity firm took over the now-defunct Customized Structures Inc. in Claremont. The new owners managed the company until it ran out of money then fired all of its workers on Christmas Eve. While the state was able to squeeze some money from the investors and the primary lender, the federal government offered no meaningful remedy. Now more than a year later, the workers’ claims remain tied up in a potentially hopeless bankruptcy case and the owners are still in business elsewhere.

Situations like these have led us to sponsor a New Hampshire Worker Adjustment and Retraining Notification, or WARN, Act.

New Hampshire workers are the backbone of our state’s economy and deserve some basic protections. In these tenuous times, with so many businesses struggling, it becomes vitally important to ensure workers and the state get prior notice of a mass layoff or closing so that preparations can be made to smooth the way.

When a business does give notice of layoffs, the benefit to employees and to the local community can be substantial.

When Jac Pac laid off 550 workers in Manchester in 2004, it gave appropriate notice to workers, to the city and to the state. New Hampshire’s Rapid Response Team was able to provide re-employment services onsite and take advantage of a National Emergency Grant from the U.S. Department of Labor. Today, the vast majority of these workers have found new jobs and are able to provide for their families.

The federal WARN Act requires a 60-day notification of a mass layoff or closing, but this applies only to businesses with 100 employees or more. A WARN Act for New Hampshire should be tailored to our smaller size and give our state officials the power to enforce its provisions.

The biggest problem with the federal law is that no government agency enforces it. Laid-off workers must file suit in federal court with all the expense and delay that entails. A New Hampshire law would allow our officials to investigate and correct violations quickly, awarding back pay while those who violated the law can still be found and held accountable.

A quick and efficient response from state officials will be essential to help abruptly terminated workers who are trying to figure out how to pay the rent. Waiting for a court case to resolve in a distant state isn’t fair to our workers or their families.

Our bill would apply to New Hampshire companies with more than 75 employees – about 1,040 companies in all. Other states have adopted similar legislation, and some apply the law to businesses with as few as 50 workers.

This is not about being unfriendly to business. This is about making sure we attract and support smart, well-run businesses that do the right thing by their workers even in hard times. New Hampshire workers deserve as much.

Betsi DeVries, D-Manchester, and Bob Odell, R-Lempster, are members of the New Hampshire Senate.