Labor Dept. says defense layoffs 'speculative,' no need for warning

Monday - 7/30/2012, 9:11pm EDT

Defense industry executives have spent the last few weeks warning that across-the-board budgets cuts set to take effect in January could lead them to issue notices in the fall warning of impending mass layoffs.

However, in a new memo issued Monday, the Labor Department said the lack of clarity about how the budget cuts would be applied means it would be "inappropriate" to issue Worker Adjustment and Retraining Notification (WARN) Act notifications.

The impact of the cuts — $1.2 trillion over 10 years — on individual contracts and programs is "speculative and unforeseeable," Assistant Labor Secretary Jane Oates wrote in a memo.

The purpose of the notification law, Oates wrote, is to provide notice to those workers, who are likely to be affected by layoffs, not to workers "who have only a speculative chance of suffering" adverse consequences.

Layoffs resulting from sequestration are exempted from the law because they would be considered unforeseen business circumstances, the memo stated.

"Although it is currently known that sequestration may occur, it is also known that efforts are being made to avoid sequestration," the memo stated. "Thus, even the occurrence of sequestration is not necessarily foreseeable."

Because agencies, including DoD, have not spelled out which contracts would be affected by sequestration, "the actual contract terminations or cutbacks that will occur in the event of sequestration are unknown," the memo stated.

The GOP chairman of House Armed Services Committee called the new guidance "politically motivated." Rep. Buck McKeon (R-Calif.) said the administration is preventing workers from being told their jobs are at risk.

"As it stands, the only certainty we are dealing with is that dramatic cuts will force huge job losses," he said in a statement.

Lawmakers are still working to avert the cuts.

(The Associated Press contributed to this report)

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