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Senate Minority Leader Chuck Schumer is planning new legislation to plug a loophole in a federal law which a long-ailing restaurant chain took advantage of recently when it gave nearly no warning for layoffs across the Northwest.
Schumer’s home state of New York was particularly hard-hit when the Friendly Restaurant chain, headquartered in Wilbraham, Mass., shuttered a number of it’s locations, including 15 in Upstate New York “without so much as a day’s notice,” according to a statement from the Democratic senator’s office.
“The way by which Friendly’s left their workers across Upstate high-and-dry isn’t just something we should lament, it’s something we should address – by closing the Friendly’s loophole that allowed this company to fire scores of valuable employees without a moment’s notice. If these women and men worked in a factory, they would have received a WARN notice, but—even though they had the very same employer—because they happened to work at different locations the company was not required to give any notice, and that’s just wrong,” said Senator Schumer. “So, in the spirit of fairness, and so this doesn’t happen again, I am announcing plans to introduce new legislation to close this gaping loophole, because we shouldn’t have hundreds of hardworking employees show up for work in the morning only to be told to close up shop—for good. The truth is: this issue is not just about Friendly’s. It’s about fairness and amounts to an acknowledgment corporations need to adhere to and embrace much friendlier worker protections.”
Schumer explained that the hardworking service employees from the Friendly’s Corporation deserved better, and argued that more must be done at the federal level to prevent similar mass layoffs from being sprung on workers overnight in the future. Therefore, Schumer announced his plans to introduce new legislation in the Senate that will strengthen the WARN Act by closing the “single employment site” loophole and consequently increase the circumstances under which employers must give two months’ notice to their employees of imminent and large-scale layoffs. Schumer said that this sort of mass layoff shouldn’t happen to workers without fair notice and urged his colleagues to pass his WARN Act-strengthening legislation immediately upon its introduction.
According to reports, over the weekend of April 6-7 the Friendly’s Corp. abruptly and permanently shuttered 23 Friendly’s restaurants across the Northeastern United States.
Established by two brothers in 1935 in Springfield, Mass., with one shop Friendly’s took off as a regional chain serving ice cream and diner-style fare. Eventually bought by the Hershey Corp., it grew to a chain stretching the length of the East Coast. The company has increasingly struggled over the last 20 years since going public.
In 1988 Congress passed the Worker Adjustment and Retraining Notification (WARN) Act to protect the rights of workers and employees in the United States. The WARN Act mandates that employers give their employees 60 days advance notice of large-scale layoffs under certain circumstances. First, only organizations with 100 employees or more are required to comply with the WARN Act. Second, WARN Act notification is only necessary when 50 or more employees at a single employment site are set to be terminated, or if 50 or more employees are impacted by a factory closing.
Schumer said that since each of the Friendly’s locations didn’t cross the 50 employee threshold at any one employment site, the corporation was not mandated to give employees the two months’ advance notice. Schumer noted that by spreading out layoffs across multiple sites throughout the state, Friendly’s was able to skirt its WARN Act obligations and avoid notifying employees ahead of time. Schumer stated that while Friendly’s might not have violated the current WARN Act requirements, the company didn’t adhere to the spirit of the WARN Act. Schumer pointed to Friendly’s maneuvering as having exposed a major loophole in the WARN Act that must be closed immediately.
Therefore, Schumer announced that in short order, he would be introducing legislation in the Senate to close this loophole. Specifically, Schumer explained, his legislation would close the WARN act loophole by adjusting the applicability of the single site requirements that allowed Friendly’s to abruptly lay off hundreds of workers.