Obama: Lie To Your Employees About Layoffs, We’ll Cover The Ensuing Lawsuits

Of course I’m paraphrasing, but that’s the net effect of guidance the Obama administration to companies with federal contracts (especially defense contractors) that will be hit with automatic cuts due to sequestration.

NEW YORK (CNNMoney) — The White House on Friday told government contractors worried about fiscal cliff spending cuts to hold off on warning employees about possible layoffs.

The government said it would cover legal costs if contractors are forced to slash their payrolls because of the looming $109 billion in automatic cuts next year and are alleged to have violated the WARN Act.

The federal WARN Act requires businesses with more than 100 employees to notify workers at least 60 days in advance of a mass layoff or plant closing. Some states require more notice.

“Any resulting employee compensation costs for WARN Act liability as determined by a court, as well as attorneys’ fees and other litigation costs (irrespective of litigation outcome) would qualify as allowable costs and be covered by the contracting agency, if otherwise reasonable and allocable,” the Office of Management and Budget said in its guidance.

As we pointed out previously at Wizbang, with Virginia a key battleground state where the impacts of sequestration are certain to be devastating, it’s no surprise that President Obama doesn’t want big defense contracting companies notifying their employees of upcoming layoffs right before the election.

Note to cash-rich Super PAC’s looking for a great pre-election mail campaign. Create a massive layoff notice mailer targeting Northern Virginia at the end of October. Just because the White House is strong-arming companies not to spill the beans doesn’t mean that someone else can’t do a public service for households in Farifax, Loudoun, and Prince William counties were the state will be won or lost…

Update: As they note at RedState, companies are only covered if they lie to employees and break the law, per Obama’s guidance. As a commenter notes, “Anything/verbal assurance The Government can give, It can take away. Any company that falls for this will rue the day they fell for it.”

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