Federal law requires that companies provide 60 days notice to employees if they intend to close a plant or lay off more than one-third of their work force.
But, according to a report in the Register-Guard, Coburg, Ore.-based Monaco Coach Corp. provided no such notice when it told about 2,000 employees on Monday (March 2) that their jobs were being terminated, most of them immediately.
A state official said it appeared that Monaco acted legally under the Workforce Adjustment and Retraining and Notification Act, or WARN Act, because it cited exceptions to the 60-day notification rule. In any event, she said, the state has little authority or resources to enforce the federal law.
The terminations were effective immediately for about 1,400 workers at the Coburg RV factory, where employees have been on furlough since mid-December.
The U.S. Department of Labor says provisions of the WARN Act allow companies to skip the 60-day notification requirement under certain circumstances.
A “faltering company” is not required to give notice if it is seeking new capital or business in order to stay open and if giving notice would ruin that opportunity. In addition, business circumstances that were not “reasonably foreseeable” permit a company to avoid the 60-day notice.
The Register-Guard reported that Monaco officials invoked both exceptions in the letter they sent to their employees, and to the state Department of Community Colleges & Workforce Development, which handles WARN Act notifications in Oregon.
“While Monaco would have preferred to provide earlier notice, to do so would have undermined its efforts to sell or otherwise attract financing to preserve the business,” wrote Rick Kangail, vice president of human resources.
The company has been actively seeking new financing, which would have allowed it to avoid or postpone the layoffs, he wrote.
“In addition, unforeseen business circumstances precluded our ability to give 60 days notice of the forgoing circumstances,” Kangail wrote.
Specifically, he cited the “far-reaching economic crisis” that has been particularly hard on the RV industry. In addition, several Monaco dealerships have closed, which forced Monaco to repurchase motorhomes while decreasing demand for the coaches, he wrote.
Karen Humelbaugh, education and workforce programs director for the Department of Community Colleges & Workforce Development, said Wednesday that it appears that Monaco followed “the letter of the law.” In any event, her agency doesn’t have the authority or inclination to enforce the federal law.
“We’re less concerned with whether a company has filed a proper WARN notice than we are in accessing employees to help them get trained to get their next job,” she said.