We are seriously concerned about the OMB’s memorandum and the DOL’s letter. In particular, we are concerned about the authority of the Executive Branch to instruct private employers not to comply with federal law and to promise to pay the monetary judgments and litigation costs that arise out of the lawsuits that may follow. Although the precise amounts of the judgments and costs are unknown, they could potentially reach tens or hundreds of millions of dollars, if not billions of dollars, all of which would be paid for with taxpayers’ dollars.
Accordingly, respond to the following questions and requests for information:
1. Identify the legal authority for the DOL to instruct federal contractors that they are not required to provide WARN Act notices to their employees in light of the pending sequestration.
2. Identify the legal authority for the OMB to instruct federal contractors that they are not required to provide WARN Act notices to their employees in light of the pending sequestration.
3. Identify the legal authority for the OMB to promise to pay the monetary judgments and litigation costs that arise out of the lawsuits that could follow from employers’ failure to comply with the WARN Act.
4. Set forth the analysis and supporting legal authority for the representation in the OMB’s memorandum that “any resulting employee compensation costs for WARN Act liability as determined by a court, as well as attorneys’ fees and other litigation costs (irrespective of litigation outcome), would qualify as allowable costs and be covered by the contracting agency, if otherwise reasonable and allocable.”
5. Explain in detail why you maintain that the Obama Administration did not have to first obtain approval from Congress before committing to pay tens or hundreds of millions of dollars (if not billions of dollars) in judgments, settlements and/or attorneys’ fees that may be incurred by private employers.
6. Identify in detail the costs that the OMB’s memorandum represents the Administration will “cover” for contractors who are sued based on their failure to provide notices under the WARN Act. For example, do the “costs” include reimbursing the contractors for the attorneys’ fees they incur from defending themselves in WARN Act lawsuits? What other “costs” will be “covered”?
7. How many millions or billions of dollars has the OMB’s memorandum obligated the federal government to pay, if WARN Act notices are not provided and layoffs and lawsuits do occur?
8. What will be the source of the funds used to pay the monetary judgments and litigation costs that arise out of the lawsuits that follow from employers’ failure to comply with the WARN Act? Does the Administration maintain that these funds have already been appropriated by Congress?
9. Before the release of OMB’s memorandum, was any analysis done to determine how much the federal government would have to pay to “cover” the costs of these lawsuits, including potential attorneys’ fees? If so, provide that analysis and provide copies of all documents related to that analysis.
10. Provide copies of any and all written analyses that were done in connection with the OMB’s memorandum.
11. According to the DOL’s July 30, 2012 letter, if contractors provide WARN Act notices, it “would be inconsistent with the purpose of the WARN Act.” By contrast, 29 U.S.C. § 2106 (the WARN Act) provides that “[i]t is the sense of Congress that an employer who is not required to comply with the notice requirements of section 2102 of this title should, to the extent possible, provide notice to its employees about a proposal to close a plant or permanently reduce its workforce.” How does OMB justify DOL’s statement in light of the plain language of section 2106 of the WARN Act?
12. According to the OMB’s memorandum, “some [contractors] have inquired about’ whether Federal contracting agencies would cover WARN Act-related costs in connection with the potential sequestration.” Identify each of those contractors and produce all documents related to communications between the White House, DOL or any other federal agency and the contractors regarding this issue.
13. Does the Administration maintain that the OMB’s memorandum constitutes a binding legal promise to contractors that the federal government will fully indemnify them for any and all liability and legal defense fees that they incur as a result of their not providing WARN Act notices? If not, explain in detail whether the OMB’s memorandum makes any binding commitments and if it does, describe those commitments in detail.
14. Were any other federal agencies consulted prior to the issuance of the OMB memorandum? If so, identify each agency consulted and indicate whether any agency disagreed about whether the legal authority exists for the Administration to promise to pay the costs and legal fees associated with the failure to issue WARN Act notices.