Government Corruption File #1 : The WARN Act

Here we have a prime example of the federal government ignoring its own rules when politically convenient for a government incumbent running for re-election.

A few facts:

1. The Worker Adjustment and Retraining Notification (WARN) Act was passed in 1988 by a Democratic-controlled Congress. President Reagan did not sign the bill, but it became law because it was passed by a veto-proof majority of Congress (during an election year of course!).

2. The Congress passed, and President Obama signed a law stating that if debt commission recommendations did not receive a vote in Congress, there would be drastic cuts to government spending that would take effect January 1, 2013. In federal budget speak, this is known as sequestration.

3. The WARN Act covers employers having 100 or more employees.  Employers must give at least 60 days advance notice or they may face lawsuits from employees for back pay.

4. January 1, 2013 – 60 days = November 2, 2012.

5. November 2, 2012 is 4 days before Election Day (Nov 6).

6. Contractors providing goods or services to the government would potentially be required to mail out thousands of layoff warning notices to employees, particularly in the battleground state of Virginia, which has many federal contractors. Does anyone see a problem?

7. The Administration, via the Department of Labor, issued letters to federal contractors in July encouraging federal contractors not to comply with the law.  They wrote in typical government-speak: “it is neither necessary nor appropriate for Federal contractors to provide WARN Act notice to employees 60 days in advance of the potential sequestration because of uncertainty about whether sequestration will occur…”

Translation: Despite the fact that the Republican-controlled House and the Democratic-controlled Senate have no plan to reverse the pending budget cuts, you, Business Owner, should not comply with the law.

8. Fearing lawsuits, federal contractors announced that they would continue with plans to send out the WARN Act notices.

9. In September, the government again encouraged businesses not to comply with the law and not to send out the WARN Act notices.This time the notice came from higher up in the Administration’s food chain: The Executive Office of the President/Office of Management and Budget.

In a memo dated September 28, the Administration promises federal contractors that they may be reimbursed the cost of any potential lawsuits but only if they followed the Department of Labor guidance. So there you have it. The Administration–standing for re-election–is promising YOUR tax dollars to companies in exchange for not complying with federal law so that the President’s campaign can score political points (or avoid the consequences of its own decisions).

Of course government’s solution would be to pass a new law (after the election of course) with even stiffer penalties for greedy businesses who “don’t follow the rules.”  Never mind that the government takes no responsibility for its own actions.

This is the kind of corrupt government meddling with the private economy that leads to losses of freedom for everyone. The government instructs businesses to ignore a law so that the consequences of that law are avoided at a politically convenient moment. This is why crony capitalism has earned the name “crapitalism”. It stinks!