“It appears companies will bow to the threat implicit in last week’s OMB guidance; withhold notices today or the government might not cover your court costs down the road,” says Rep. Buck McKeon (R-Calif.). “Let me be clear, neither the OMB guidance nor the Lockheed decision will protect a single defense industry job if sequestration occurs in January.”
On Sept. 28, Republican Sens. John McCain (Ariz.), Lindsey Graham (S.C.) and Kelly Ayotte (N.H.) were quick to characterize the OMB notice as a costly political ploy.
“President Obama put his own re-election ahead of the interests of working Americans and our national security by promising government contractors that their salary and liability costs will be covered at taxpayer expense if they do not follow the law that requires advance warning to employees of jobs that may be lost due to sequestration,” the senators write. “As a result of the OMB guidance, the Department of Defense will have to allow companies to claim repayment for the salaries of workers who are laid off but did not receive the required WARN notices — a cost to the taxpayer that could be as much as $4 billion. In addition, DOD will have to reimburse companies for any legal damages paid to workers who are laid off but did not receive the required WARN notices — a cost that is inestimable.”