HOUSE BILL REPORT

EHB 1855

BYRepresentatives Jones, Vekich, Wang, Leonard, Jacobsen, R. King, Anderson, Ebersole, Cole, Nelson, Belcher, Basich, Brekke, Rector, Dellwo, Sayan, Wineberry, Crane, Prentice and Phillips

Establishing a state plant closure law.

House Committe on Commerce & Labor

Majority Report:  Do pass.  (7)

      Signed by Representatives Vekich, Chair; Cole, Vice Chair; Jones, R. King, Leonard, O'Brien and Prentice.

Minority Report:  Do not pass.  (4)

      Signed by Representatives Patrick, Ranking Republican Member; Smith, Walker and Wolfe.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE MARCH 6, 1989

BACKGROUND:

The federal plant closure law (P.L. 100-379) was enacted August 4, 1988, effective February 4, 1989.  Under the federal law, employers with 100 or more employees, excluding part-time employees, or 100 or more employees who aggregately work at least 4,000 hours per week, excluding overtime, are required to give 60 days notice of any plant closing or mass layoff.

SUMMARY:

Employers who average 25 or more employees per week during any three consecutive months in the 12 months prior to a reduction in business operations must give at least 100 days notice of the reduction.  "Reduction in business operations" means the total or partial closure of a workplace, the relocation of a workplace, or the layoff of employees, during any 30 day period that affects, for 30 days or more (1) at least 25 percent of the employees and at least 15 employees; or (2) at least 200 employees.  Individual reductions over any 90 day period will be aggregated, unless the employer shows that the reductions resulted from separate causes.

The notice period may be reduced if the employer gives as much notice as possible and (1) an unforeseeable contingency occurs with contractual or financial arrangements making fulfillment impracticable; or (2) the reduction in business operations results from the anticipated loss of a supply of logs that reduces the employer's business by 50 percent, if the employer operates a small mill.  Sixty days notice is required, if the employer is receiving assistance from the state business and job retention program.

The act does not apply to reductions in business operations that occur at construction sites or other temporary workplaces, result from customary seasonal factors in the industry, or result from natural disasters.

If the employer sells the business, the seller is responsible for providing notice of any business reduction up to and including the day of the sale.  After the sale, the buyer is responsible for providing notice.  Reductions in business operations occurring within 90 days of the sale are aggregated to determine applicability of the notice requirements.  The seller's employees as of the day of the sale are deemed to be the buyer's employees immediately after the sale.

Notice must be given to all affected employees, the employees' collective bargaining representative, if any, the dislocated worker unit, the state business and job retention program, and the chief elected official of the affected community.  The Department of Trade and Economic Development is responsible for notifying the Governor's office, the Department of Social and Health Services, the Department of Labor and Industries, and the clerks of affected taxing districts.

In response to a reduction in operations, the Department of Trade and Economic Development must coordinate the state assistance.  The dislocated worker unit's rapid response team must respond in 48 hours.

Within 30 days of receiving notice and as appropriated funds allow, the business and job retention program must complete an assessment of alternatives to reduction of business operations.

If a total closure is planned, employers must offer the plant for sale to any community-owned or employee-owned business.

If an employer fails to give the required notice, the employer must pay each affected employee a day's pay for each day that notice should have been given; continue existing group health insurance; pay an amount equal to the amount paid to affected employees to the state business and job retention program; and provide a relocation and/or training plan for affected employees.

An employer violating the notice provisions is not eligible for entering into contracts for state work or for state economic development assistance for 10 years.  The employer must also reimburse an awarding agency for any economic assistance loan provided during the preceding 10 years, with interest.

Any person aggrieved by a violation of the act, including affected employees' collective bargaining representatives, the affected local government, or the Department of Trade and Economic Development, may bring suit to enforce the act.

If a collective bargaining agreement provides for a longer notification period or greater employee protections than required by the act, the collective bargaining agreement prevails.

If any provision of the act is held invalid, the remainder of the act is not affected.

Fiscal Note:      Requested February 13, 1989.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    Representative Evan Jones, prime sponsor; Jeff Johnson and Jim Tussler, Washington State Labor Council; Roger Rydell; Al Napiontek; Ollie Ross; Katherine Briar, Department of Social and Health Services; Bob Markholt; Gail Rogers Buxton, International Association of Machinists and Aerospace Workers; Pat Stell, Coalition of Labor Union Women; Pete Peterson; Jim Daas; Lloyd Hohman; Bob Dilger, Washington State Building and Construction Trades Council; Frank Chesnut, Woodworkers; and Clint Hash.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The federal plant closure law does not provide adequate notice for Washington since the federal thresholds would exempt all but the very largest companies.  A longer notice period than is provided under federal law is needed to allow time for planning and implementing assistance to the business, the community, and the workers.  Better planning and preventive measures will save the state in the long run in both economic and human costs.

House Committee - Testimony Against:      None Presented.