Debate Goes On Over Advance Layoff Notice

Recently I toured a manufacturing plant near Los Angeles with a visiting executive of the major employer association in the Netherlands. It was a Friday afternoon, and the executive seemed genuinely astonished when he read a fairly small notice posted on the company bulletin board announcing that most of the 500 workers in the plant would be laid off the following Monday.

The conservative Dutch executive asked in seeming disbelief: “Is this the first time these workers have heard of the economic calamity that is about to befall them?”

A company officer accompanying us said that, unfortunately, it was true. But then, assuming sympathetic understanding from the foreign corporate executive, the American explained with what to him was irrefutable logic:

“We kept the plan secret from all but a few key officers because we wanted to keep the plant in operation until today. That might not have been possible if the workers heard the bad news even a few days ahead of time and started looking for other work or just goofed off while they gossiped about the problem. It could have cost the company a considerable amount of last-minute production.”

The polite foreigner simply nodded his understanding of the plant manager’s words. But as we drove away, he shook his head in amazement, saying: “I just don’t understand how such a wonderful country as this can treat human beings with such contempt of their own needs while putting a much higher priority on squeezing a few more dollars out of the dying plant.”

While the idea of giving workers a chance to brace themselves for a probable job loss, and perhaps even join with community and government leaders to prevent the plant closure, is commonplace in most major industrialized nations around the world, it is not the case in the United States.

In fact, after a 12-year struggle by labor to get Congress to consider some kind of federal plant-closure measure, the House last week narrowly defeated (208 to 203) a bill to give workers at least some advance notice when they are about to lose their jobs.

Corporations around the country, led by the U.S. Chamber of Commerce, used a nationwide system of phone banks and letter writing campaigns to persuade the Democratic-controlled House that business could be “devastated” by the proposed requirement that employers with more than 50 workers would have to give their workers at least 90 days’ advance notice of plans to shut down a plant or lay off a substantial number of employees.

Mark A. de Bernardo, labor law manager of the chamber, argued that, if companies had to give 90 days’ advance notice, it would wreck their ability to attract capital, new contracts, or to find merger partners.

“They would have no leverage, for example, in bidding on a major federal contract or construction project if it was known the company was scaling back or closing,” he argued.

And he also contended that the measure would have “jeopardized the relationships of struggling businesses with customers, creditors and investors.”

However, if a company tries to deceive its creditors or the government in order to snag a last-minute contract and squeeze a few dollars more out of the final moments of production by pretending to be in good economic health, there would be serious moral--if not legal--questions about the officers of such firms.

Organized labor fought to win passage of the bill even though union members often have contracts with their employers requiring advance notice of major layoffs or plant closings. But fewer than 19% of America’s workers belong to unions, and that means that the vast majority of workers will still have to wait until layoff notices are posted before they know that they are about to join the ranks of the unemployed.

The bill will be reintroduced again next year. Supporters will then try to add a requirement, also common in the laws of most other industrialized nations, that corporate executives at least talk with labor representatives and disclose financial data to justify massive layoffs or plant-closure plans.

The idea behind sharing major corporate decisions, such as plant closings, is not to leave critical decisions to a relatively few top corporate executives even though they may be right in deciding to shut down a plant and lay off hundreds or even thousands of workers regardless of the impact on the workers or the communities in which they live.

But the executives might be wrong, and the plant and its jobs might be saved with the cooperation and advice of workers, union leaders, executives of other businesses, government officials and officers of financial institutions.

Plant closures affect not only unprofitable firms, of course. There are times when a company is earning a fairly good profit from a plant in one community but decides that it might make even greater profits in another. So the corporate officers close the moderately successful plant, ignoring the impact of that action, and try to do even better in another location.

It is true that officers of a company planning a plant closure may have to take “a few risks, such as the possibility that some fortunate workers will find other jobs before the 90-day notification period is over and thus hamper last-minute production schedules,” concedes Fred Feinstein, staff director and legal counsel for the labor-management relations subcommittee of the House Education and Labor Committee.

But he insists that such risks are relatively small compared to the advantage of a plant-closure law.

Maine and Wisconsin, and some cities in other states, already have versions of plant-closure laws. Some communities and even employer associations have voluntary programs designed to encourage advance notice of massive layoffs and plant closures.

Perhaps, when Congress looks at the issue again, it will consider the emotional and economic impact of plant closures on American workers, which would, indeed, be a fairly modest proposal.

And it should also think again of the possible positive effect of cooperation among labor, management and the government to save the plant instead of leaving that critical decision entirely to the handful of executives who would still have to make the final determination.

Transit Union Dissent

Intra-union fights are not new, but there’s an increasingly bitter battle being waged among the local, regional and national officers of the Amalgamated Transit Union over the best way to handle Greyhound Corp.’s demands for more contract concessions.

Greyhound and its chairman, John Teets, have become national symbols of the hard-line management tactic of trying to boost profits by drastically cutting workers’ wages and benefits.

And union officers, like many union members, don’t know how best to respond to such harsh treatment.

Greyhound’s last offensive against its workers was so successful in 1983 that, if the company wins again, it most certainly will encourage other firms to adopt similar policies.

Some union leaders figure the best thing to do is to sit quietly, not fight back and wait out what seems to be part of a nationwide anti-union storm. That seems to be the view of Amalgamated’s top officers.

But that isn’t a universal view, and it is certainly not the feeling of officers of Amalgamated’s Los Angeles Local 1222, who are battling Greyhound and its tough chairman.

The local officers are not only denouncing the Greyhound demands for more contract concessions, but they have now accused the union’s regional officials of using “arm-twisting fear tactics” to intimidate employees of Greyhound Lines, a Greyhound Corp. subsidiary, to go along with Teets’ plans.

The local leaders charge that the regional officers are being used by Teets to pressure members to accept a four-year wage freeze and other contract reductions in addition to the $60 million in annual wage cuts and other contract concessions that they took in 1983 after losing a sometimes violent seven-week strike nearly two years ago.

The company said declining cross-country bus ridership caused by competition from low-fare airlines is behind its demands for more concessions. Teets is offering to guarantee jobs to high-seniority drivers, but, with a two-tier wage system already in effect, the company’s proposal would mean drastic reductions in labor costs and the size of the work force.

When company and union negotiators failed to agree on terms of a new contract, a majority of the union leaders accepted a management demand that the company’s own contract proposal be submitted to a mail ballot vote.

A majority of the union leaders said they would not recommend either acceptance or rejection of the pact that members are now voting on by mail. The results will be announced Dec. 7.

But, when the management proposal was sent to the members “without recommendation,” it was accompanied by a letter from the union’s regional office saying in part that “management has told the union that it was going to take certain actions that . . . Greyhound Lines Inc. would cease to exist in the future (if the pact is rejected), and (this) could be the beginning of the end of our (union).”

The union’s letter urged members to decide whether to accept management’s latest demands “in view of the possible ramifications” as outlined in the letter.

Officers of Local 1222, headed by its president, James Cushing-murray, charged that the letter from the union pretended to be neutral but that it was, in truth, an urgent recommendation that members had better accept the company’s demands or face extinction of both their jobs and their union.

Cushing-murray and other local union officers want a new vote after what he says is a “fair and full discussion of the real meaning of what Teets is trying to do to us and what we should do to help ourselves and the company, not just Teets.”

Teets won’t comment on the raging dispute because, he says, he wants the vote to be “conducted in an atmosphere of calm,” and top union officials have also declined to discuss management’s demands.

That doesn’t leave any room for free discussions of the problems faced by Greyhound or its workers. And it is certainly not part of what should be the wave of the future in labor-management affairs: Reducing their adversarial nature and increasing joint labor-management participation in the decision-making processes.