The Worker Adjustment and Retraining Notification Act .
or WARN Act, requires companies to give at least 60 days notice prior to any anticipated layoffs. Unless the government is able to work out some agreement, severe across the board budget cuts will impact defense companies on January 1, 2013.
Companies such as Lockheed Martin feel that to ensure compliance with the WARN Act they will need to send out advance notices of possible layoffs just a few days before the presidential election in November. The Obama administration wants to ensure that this does not happen. It could hurt Obama's chances of being re-elected.
Back in late July, the Obama administration told defense contractors to ignore the requirements of the WARN Act. Since sending out the notices could have significant political consequences the Labor Department
argued that the law could simply be ignored in this instance.
A number of defense contractors were worried that if they did ignore the law they could face fines and lawsuits with steep legal costs. In response, the government has issued a "guidance" to the effect that the government would repay any fines or legal costs that companies might incur as a result of ignoring the WARN Act.
This move did not sit well with Sen. Lindsey Graham
. Graham said that this advance promise by the Obama administration to reimburse companies for costs associated with politically expedient crimes was "patently illegal".
“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. That is so beyond the pale — I think it’s patently illegal.”
Perhaps Graham is correct but nevertheless Lockheed Martin has announced that they will accept the government offer. No doubt others may follow suit. Apparently the rule of law in the U.S. is being replaced by the rule of political expediency. Of course, the law that taxpayers pay for all of this still rules.