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(Chris Ratcliffe - BLOOMBERG)
Bethesda-based contracting giant Lockheed Martin has backed off plans to issue layoff notices to employees starting this month, a move the company had said it could be required to make given the impending threat of mandatory budget cuts called for under the sequestration process slated for January.
The company said in a statement today that it “will not issue sequestration-related WARN notices this year.” Under the Worker Adjustment and Retraining Notification Act, states require advance notice of an event that might cause significant job losses or facility closures.
The White House issued a memo late last week that directs contractors to follow the guidance of the Labor Department. In a July letter, the Labor Department had said the Worker Adjustment and Retraining Notification Act — better known as the WARN Act — does not require contractors facing sequestration to send notices to their workers that they could be let go.
In its new guidance, the White House said that if sequestration occurs and an agency terminates or changes a contract that results in a plant closing or mass layoff that the contractors’ liability and litigation costs under the WARN Act would be “allowable costs” covered by the contracting agency.
“The additional guidance offered important new information about the potential timing of DOD actions under sequestration, indicating that DOD anticipates no contract actions on or about 2 January, 2013, and that any action to adjust funding levels on contracts as a result of sequestration would likely not occur for several months after 2 Jan,” Lockheed said in its statement.
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