Under New Law, Baxter Discloses Layoffs of 120 at Its Irvine Subsidiary

Baxter Healthcare, one of three companies that have notified the state of pending plant closings or layoffs in Orange County, said Monday that it laid off 120 employees last week at its Edwards Medical Devices & Systems subsidiary in Irvine.

A spokesman for the Michigan-based company said the notice--the second it has filed under a new federal early-warning law--was submitted to the state Employment Development Department (EDD) late last week.

The new law, the Worker Adjustment and Retraining Notification Act, requires 60 days’ advance notice of most layoffs and plant closings that result in the loss of 50 or more jobs.

But it is unclear whether companies that lay off workers in the 2 months from Feb. 4 to April 5 must file the full 60 days’ advance notice.

Besides warning individual employees or their labor unions, companies must file notices with the EDD, local governments and designated job training agencies.

A second county company that has filed a notice, Restaurant Enterprises Group in Irvine, said it is not actually planning layoffs or plant closures. A third, Western Digital Corp. in Irvine, said its notice was filed in early December to cover layoffs that were publicly announced Jan. 9.

Ongoing Layoffs in Irvine

Besides last week’s layoffs at Edwards Medical, Baxter Healthcare filed a notice Jan. 6 to cover ongoing layoffs at its separate Bentley Laboratories subsidiary in Irvine. Baxter spokesman Les Jacobson said that about 50 Bentley workers have received layoff notices and that an unknown number more will be laid off in coming months.

The layoffs at both Bentley and Edwards, he said, are part of a consolidation of research and production facilities.

About 100 Edwards Medical Device workers in Irvine were laid off in the final quarter last year; the layoffs last week have cut employment at the facility from about 400 to 150, Jacobson said.

At Restaurant Enterprises Group, the notice was filed to avoid potential conflicts with the new law, even though the company is merely selling its distribution unit to Kraft Inc. and expects most if not all of the more than 100 workers to transfer to Kraft, an official said.

“We just filed to be absolutely safe,” said Mike Casey, president of the company’s El Torito Restaurants division. He said the transfer of assets and employees would take place “slowly, over the next 2 or 3 months.”

Unit’s Sale Disclosed

Restaurant Enterprises publicly disclosed the sale of its distribution unit in mid-January.

The third company, Western Digital, filed the required notices soon after Dec. 6, when the U.S. Labor Department published interim regulations for complying with the law, said Irwin L. Kwatek, general counsel for the Irvine computer maker.

Kwatek said company officials “read the interim regulations and conferred with outside labor law experts and came up with what our policy should be.”

He said that while it is not clear just when the 60-day reporting period is to begin, Western Digital decided to file as early as possible to avoid problems.

The company is involved in a series of layoffs, publicly announced Jan. 9, that will trim 200 permanent workers and 90 contract employees from its payroll by the end of March.

More Expensive to Lay Off

Kwatek said one impact of the law has been to make it “more expensive to do a layoff.” Instead of simply handing a worker a pink slip and a week or two of severance pay, Western Digital has been paying workers the difference between the actual advance notice they have received and the 60 days required by the law.

It differs from employee to employee, Kwatek said, but in some cases has involved cutting a check for 60 days’ pay.

As of Friday, 17 California companies had filed notices with the state Employment Development Department in Sacramento.

Main story, Page 1, this section.

KEY PROVISIONS OF PLANT-CLOSURE LAW Title Worker Adjustment and Retraining Notification Act (WARN). Effective Date Feb. 4, 1989. Purpose To provide 60 days’ notice to workers, local governments and job-training programsof business closures and large layoffs. Who is covered? All employers with 100 or more full-time employees. When is 60-day notice required? 500 or more workers are laid off a single site. 50 to 499 workers are laid off, and those workers constitute one-third of the total work force at a single site. A plant or operating unit that employed 50 or more people is closed. Who is notified? The workers. The ranking elected official of the local jurisdiction to which the company pays the most taxes. The local unit of the federal Job Training Partnership Act. The employment and training administrator of the state Employment Development Department in Sacramento. Exceptions Less than 60 days’ notice can be given if the closing or mass layoff is caused by business circumstances that “were not reasonably foreseeable” or, in the case of a “falteringbusiness,” if 60 days’ notice would jeopardize a deal that would enable the company to stay in business. Penalties Fines of up to $500 for each day notification was not given and payment of all covered employees’ back pay and fringe benefits. Enforcement Via civil suits filed in U.S. District Court by employees, their labor unions or local governments. No federal or state agency has been given enforcement power. Source: U.S. Department of Labor