Plant-Closure Law May Affect Gibraltar Sale : S&Ls;: The government and labor advocates differ on whether workers must get 60-day layoff notices.

The expected sale this month of Gibraltar Savings, one of the largest S&Ls; operating under government supervision, could run into a snag over whether thrifts must comply with a federal plant-closing law.

The issue of whether failed savings and loans are subject to the law--which requires large employers to notify workers in writing 60 days before major layoffs--could prove an important one for the federal Resolution Trust Corp.

Prospective buyers of failed thrifts being sold by the RTC want the flexibility to consolidate operations and lay off workers. They may be reluctant to bid until the issue is cleared up.

The Worker Adjustment and Retraining Notification Act, which took effect last year, requires employers of 100 or more workers to provide notice before mass layoffs or plant closings.

In memos to workers, Gibraltar management contends that the thrift is exempt from the law. It cites a position taken by RTC lawyers that the “actual closing” of Gibraltar will be carried out by the Office of Thrift Supervision, the federal agency that takes over thrifts before handing them to the RTC to be sold.

Some legal experts dispute that position.

“It’s my belief, based on my knowledge of the law, that an S&L; in this situation would be covered by the law,” said Greg LeRoy, research director of the Midwest Center for Labor Research in Chicago. The labor group had pushed for the law.

LeRoy said federal authorities may try to contend that Gibraltar employees are working for the U.S. government, which seized control of the institution 15 months ago. The plant-closing law applies only to “business enterprises,” not government agencies.

LeRoy said that claim could prove hard to justify, however, because employees of seized thrifts are not made civil service workers and given the rights that federal workers enjoy.

RTC spokeswoman Nancy Schertzing said another reason that RTC lawyers believe failed thrifts are not subject to plant-closing laws is that failed-thrift layoffs would stem from a regulatory action rather than a business decision. The lawyers also contend that, when the government takes over a failed thrift, it is an unmistakable sign that the institution may be closed.

LeRoy disputes those positions. For one thing, he says, the law stipulates that workers must receive actual notice of closure, not just signs that a closure is coming.

Other regulatory actions that force companies to lay off workers, such as suspension of a license, require that workers receive notice, he added.

Between 400 and 500 full-time employees work at Gibraltar’s headquarters. Neither workers nor state officials--whom the law also says must be notified--have received notice of closure.

Bids for Gibraltar must be submitted by today. An announcement of a winner is expected by June 29. According to various sources, the most interested parties appear to be Wells Fargo & Co., BankAmerica Corp., Security Pacific Corp., Citibank FSB, Great Western Financial and Royal Trustco, a financial conglomerate based in Toronto. Golden West, parent of World Savings, also has looked at the thrift.

Gibraltar, with $7.1 billion in assets as of Dec. 31, was the 14th-largest thrift in California.