AN ACT Relating to employer obligations; adding a new chapter to Title 49 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that:

(1) Employment is vitally important to an individual's economic well-being and self-respect. The employees of a business invest their skills and efforts into a business and have a vital stake in its continued operation and their continued employment. When their employment with a business is terminated due to the closure, transfer of ownership, or relocation of the business, they suffer a heavy economic and personal loss.

(2) When an employer closes or relocates, particularly in cases in which the employer employs a large number of employees in a locality or within an industry, it is difficult, and sometimes impossible, for the former employees to find comparable employment with another employer.

(3) When an employer closes or relocates or when employees are terminated as the result of a transfer of ownership of the business, long-time employees lose the seniority, benefits, and unaccrued pension credits they have earned during their many years of service. Employment offering comparable wages and benefits is unavailable to many. Some older employees will be unable to find alternative employment.

(4) The potentially disastrous effects of the sudden elimination of an employee's employment, through no fault of the employee, should be shared by the employer, who has made the decision that closure, sale, or relocation of the business is an economic advantage. Moreover, continuity of employment is a desirable goal, which vitally affects the well-being of thousands of individuals and the public as a whole, and should be encouraged.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Employer" includes any individual, partnership, association, corporation, business trust, or other entity which employs eight or more persons.

(2) "Employee" includes any individual employed by an employer.

(3) "Relocation" of a business or part of a business means removal of all or substantially all operations of the business, a separate facility or branch, or a distinct division or department of a business to a location at least sixty miles away from their original location.

(4) "Termination" of a business or part of a business means cessation of all or substantially all operations of the business, a separate facility or branch, or a distinct division or department of a business and the business or part of the business is permanently closed.

(5) "Transfer of ownership" of a business or part of a business includes any transfer of ownership in a business, a separate facility or branch, or a distinct division or department of a business, including sale of stock, a sale of assets, a foreclosure or other form of repossession by creditors, a gift, a devise, or any other means of transfer of ownership.

(6) "One month's pay" means the average monthly compensation paid to an employee by an employer based on the amount of compensation received by the employee during the preceding twelve months.

(7) "Years of service" shall include all years during which the employee was employed by the employer, or any owner, subsidiary, division, or entity otherwise related to the employer, or during which the employee was employed in the same operation or facility while it was owned by a predecessor to the employer.

(8) "Successor employer" means an employer to whom the ownership of a business or a part of a business has been transferred.

(9) "Predecessor employer" means an employer who has transferred the ownership of a business or a part of a business to another.

(10) "Comparable position" means a position that requires comparable education, skills, experience, and effort and is performed under similar working conditions.

NEW SECTION. Sec. 3. Any employer that relocates, terminates, or transfers the ownership in a business or any part of a business shall be liable to the employees for severance pay at the rate of one month's pay for each year of service by the employee, not to exceed twelve months' pay. The employer is liable to employees who have been employed by the employer for at least one pay period but less than one year for severance pay in the amount of one month's pay. The severance pay owing shall be in addition to any final wage payment to the employee and shall be paid within one regular pay period after the employee's last day of work. An employer's liability for severance pay under this section shall be limited to the value of the business at the time of the relocation, termination, or transfer of the ownership of the business or any part of the business.

NEW SECTION. Sec. 4. An employer shall not be liable for severance pay under this chapter to an employee if:

(1) The employee is covered by an express contract providing for severance pay; or

(2) The employee accepts employment with the new owner of the business or with the predecessor employer at a different facility or location that provides the same wages and benefits as the employee received prior to the relocation, termination, or transfer of ownership of the business.

NEW SECTION. Sec. 5. A successor employer has an obligation to offer a position to each employee who was employed by the predecessor employer during the twelve months preceding the transfer of ownership. The employee shall be offered the position that employee held for the predecessor employer prior to the transfer of ownership if a substantial portion of the work performed by that employee continues to be performed by the business. If the work performed by an employee is no longer performed by the business, the employer must offer the employee a comparable position or, if no comparable position is available, any available position for which the employee is qualified. The wages, benefits, and other conditions of employment offered or provided to the former employees of the predecessor employer may not be inferior to the wages, benefits, and other conditions of employment provided to new employees filling the same or comparable positions with the successor employer.

A former employee of a predecessor employer who accepts a job with a successor employer may not be discharged, except for misconduct connected with the employee's work, for one year after the employee's date of hire by the successor employer.

NEW SECTION. Sec. 6. Section 5 of this act does not apply to a former employee of a predecessor employer if:

(1) There is no work available which the employee is qualified to perform: PROVIDED, That all employees of a predecessor employer shall be offered employment before new employees are hired; or

(2) The former employee held a managerial position with the predecessor employer in which the employee was responsible for setting fundamental company policy, and it is necessary for the successor employer to replace the employee in order to implement its management plan: PROVIDED, That the employee shall be offered an alternative position for which the employee is qualified.

NEW SECTION. Sec. 7. An employer may not avoid the obligation under section 3 of this act by discharging or laying off employees prior to the relocation, termination, or transfer of ownership of the business or any part of the business. A successor employer's obligation under section 5 of this act is not affected if the predecessor employer discharges or lays off employees prior to the relocation, termination, or transfer of ownership of the business or any part of the business. An employer or a successor employer is relieved of obligations to an employee employed during the twelve months prior to the relocation, termination, or transfer of ownership only if the employer or successor employer proves by clear and convincing evidence that the employee's discharge or layoff was not a result of the expected relocation, termination, or transfer of ownership of the business or any part of the business.

NEW SECTION. Sec. 8. Any employee may bring suit in superior court to enforce the employee's rights under this chapter. The courts are authorized to direct specific performance of the successor employer's obligation under section 5 of this act to offer employment to an employee of its predecessor.

NEW SECTION. Sec. 9. The director of labor and industries is authorized to take assignments of claims for severance pay under section 3 of this act and prosecute actions for the collection of severance pay under the same conditions provided for the assignment and prosecution of claims for unpaid wages under RCW 49.48.040.

NEW SECTION. Sec. 10. Any individual who successfully prosecutes a claim for severance pay or a claim to enforce the successor employer's duty to offer employment to the predecessor's employees shall be awarded costs and attorney's fees, including costs and attorney's fees necessary to collect a judgment.

NEW SECTION. Sec. 11. (1) A person with a claim for severance pay against an employer or a claim for an offer of employment from a successor employer shall have a lien for moneys owing under this chapter on: (a) All of the property used in the operation of the business or part of the business that has been relocated, terminated, or transferred creating an obligation under this chapter, and (b) all proceeds of the sale or transfer of ownership of the property.

(2) A notice of the claim shall be filed within sixty days of the employee's termination of employment with the auditor of the county in which the affected business or part of the business is or was located. The notice of claim shall contain a statement of the employee's demands, the name and address of the employer, the name and address of the successor employer (if applicable), and the date of the employee's last service. A copy of this notice shall be served or mailed to the employer and, if applicable, to the successor employer at the time it is filed.

(3) The lien may be enforced within the same time and in the same manner as mechanics' liens are enforced when the lien is upon real property, or in the same manner as chattel liens are enforced when the lien is upon personal property.

(4) This lien shall be preferred to any encumbrance that may attach after the relocation, termination, or transfer of ownership that created the obligation under this chapter and to any encumbrance that may have attached prior to that time but was not filed or recorded so as to create constructive notice of the encumbrance.

NEW SECTION. Sec. 12. This chapter does not apply to an employee who is terminated:

(1) Following a determination by the department of employment security that the employer has undergone a bona fide restructuring of the employer's business for the purposes of efficiency and improvements in the productivity of the business;

(2) Because the employer has gone into receivership or bankruptcy;

(3) Because of the employer's termination of a business due to death, serious illness, or an act of God;

(4) Because the employer's business is not profitable. To qualify for this exemption, an employer must provide the employee with written notice of the expected termination, relocation, or transfer of the ownership of the business due to loss of profits at least six months prior to termination of the employee, and shall make the books of the employer open for inspection by the employee for the purpose of verifying the loss of profits; or

(5) If the employer had provided the employee with twelve months' written notice of the intent to terminate the business.

NEW SECTION. Sec. 13. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 14. Sections 2 through 13 of this act shall constitute a new chapter in Title 49 RCW.