Will Taxpayers Foot the Bill for Sequester Lawsuit?

Thursday, 20 Jun 2013 10:00 AM

By Melanie Batley

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A defense contractor that laid off workers at the Hunter Army Airfield in Georgia as a result of the sequester is facing a class-action lawsuit, and the government ultimately may pay.

According to Politico, three former aviation-maintenance employees are suing New York-based defense contractor L-3 Communications for laying them off without the 60 days notice required under the WARN Act.

Republicans are pointing the finger at the Obama administration for encouraging companies to delay notifying employees of potential layoffs. It was a power play, they say, designed to pressure Republicans into reversing the sequester.

The White House also encouraged companies to overlook legally required notice periods, Republicans charge, telling companies that in the event of sequester-related lawsuits, the federal government would pay.

"During the presidential campaign, the Obama White House foresaw sequestration triggering massive layoffs across the country," House Armed Services Committee Chairman Buck McKeon said in a statement to Politico.

"Affected industries were bound by law to notify their workers ahead of sequestration layoffs. Instead, in the most cynical of moves, the White House offered taxpayer money to companies to stop them from issuing layoff notices, warnings due days before the election," the California Republican said.

McKeon said the Worker Adjustment and Retraining Notification Act, known as the WARN Act, which went into effect in 1989, was "intended to help workers and skilled laborers," but offering companies "taxpayer money to ignore that law is disappointing and wasteful.”

The offer actually wasn't an offer, according to Politico, but a memo from the White House Office of Management and Budget that was sent to contractors advising them on the rules of the law. It suggested, however, that the legal costs of defending against alleged violations of the law could be passed on to the government if layoffs were the result of sequester, as long as other rules of the law were followed.

Despite the memo, it's still unclear whether the government will ultimately cover the costs of the lawsuit against L-3.

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