IBM layoffs leaked, labor commissioner calls for better notification
Just as IBM is reportedly planning another round of layoffs at its plant in Essex Junction, Labor Commissioner Annie Noonan is calling for better notice and more authority over such “workplace actions.”
The federal Worker Adjustment and Retraining Notification Act, known as the WARN Act, is not “right-sized” for Vermont, Noonan told the House Committee on Commerce and Economic Development on Wednesday afternoon.
She said it only applies to businesses that are relatively large by Vermont’s standards, and even then it doesn’t afford enough time for an effective response.
Little is known at this time about pending layoffs from IBM. Rumors had been swirling for about a week in the Burlington area. The Burlington Free Press reported Wednesday that the employees to be let go have already been selected and will be notified Feb. 26. The report cites information from the Alliance@IBM, an unofficial union for the global tech giant’s at-will employees, which in turn cited unnamed sources inside the company.
Labor Commissioner Annie Noonan (left) and Tracy Phillips, Unemployment Division director, propose stricter requirements for layoff notices in Vermont. Photo by Hilary Niles/VTDigger
Noonan told the committee that recent layoffs, including one at IBM in 2013, have illustrated that state regulations do not give her department, local communities or laid-off workers sufficient response time or enforcement authority.
“Not to pick on IBM,” Noonan said, “(but) we were getting calls from the town manager, the superintendent of schools, people who have to plan around the community.”
The company had announced a reorganization in June 2013, but initially refused to disclose the number of employees it would lay off, saying the information constituted a trade secret.
“I was getting calls from legislators, saying, ‘What do you mean we don’t know?” Noonan recalled.
After five weeks and a public challenge by Gov. Peter Shumlin to be more forthcoming, the company finally announced it had let go of 419 workers. But the state’s Department of Labor still struggled to obtain other information that it needed to provide services and apply for federal assistance on the workers’ behalf.
The state WARN Act, as proposed in H.758, would require businesses with 20 or more employees to give at least 90 days notice before a layoff, and to provide information about the reduction to the state and the affected workers.
Some exceptions to the 90-day notice would apply in the case of natural disasters, strikes or lockouts that precipitate a closure. The notice could be reduced to 60 days if an employer is “in good faith” trying to secure needed capital to save the jobs.
Companies would be required to provide information to the state that identifies the individuals being laid off, their job titles and workplaces, compensation information and other details. The Labor Commissioner would be granted subpoena power in the event that a business was not forthcoming.
“We’re not trying to hurt anybody. We’re not trying to share trade secrets,” Noonan said. But for regional economic planning, she said, it’s essential to know the locations at which layoffs are occurring — for example in the case of a business with more than one plant.
The wage information will also help the state anticipate pressure on the state’s Unemployment Trust Fund, from which jobless benefits are paid.
The bill also lays out penalties for noncompliance: back pay for aggrieved employees and civil penalties capped at $5,000 per employee.
Noonan added that her office’s goal is not only to respond to layoffs, but also to help prevent them. She said the earlier she’s notified that a business is in trouble, the sooner she can help direct management to other state resources, including business programs at the Agency of Commerce and Community Development.