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Mass layoff or furlough? Union, NASSCO differ

Courts rule shipbuilder should have warned employees of job cuts

U.S. Navy ship at NASSCO
U.S. Navy ship at NASSCO

According to the website of the California Employment Development Department, employers should give a 60-day notice to employees and their representatives in advance of a "plant closing or mass layoff." The notices are in the form of a Worker Adjustment and Retraining Notification (WARN) published statement.

In March of 2014, 90 employees of National Steel and Shipbuilding Company (NASSCO) found out when they showed up for work that they would be laid off without pay for four to five weeks. There had been no WARN notice. Employees, represented by the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers, Local 1998, filed suit in Superior Court, demanding back-pay and significant statutory penalties.

The workers said the company's move should have been reported under the WARN provision as a layoff. NASSCO said WARN rules did not apply because this was a "temporary furlough" and not a "mass layoff."

Superior Court awarded the workers $211,405 in back-pay and pension benefits but refused to award them penalties. The trial court said that under NASSCO's staffing requirements, a short-term work stoppage is considered a "layoff." NASSCO appealed, and several companies filed briefs backing NASSCO. But on November 30 of this year, the Court of Appeal, Fourth Appellate District, upheld the trial court's decision, stating NASSCO had to pay the workers for back-pay and pensions, but they were not awarded statutory penalties.

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U.S. Navy ship at NASSCO
U.S. Navy ship at NASSCO

According to the website of the California Employment Development Department, employers should give a 60-day notice to employees and their representatives in advance of a "plant closing or mass layoff." The notices are in the form of a Worker Adjustment and Retraining Notification (WARN) published statement.

In March of 2014, 90 employees of National Steel and Shipbuilding Company (NASSCO) found out when they showed up for work that they would be laid off without pay for four to five weeks. There had been no WARN notice. Employees, represented by the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers, Local 1998, filed suit in Superior Court, demanding back-pay and significant statutory penalties.

The workers said the company's move should have been reported under the WARN provision as a layoff. NASSCO said WARN rules did not apply because this was a "temporary furlough" and not a "mass layoff."

Superior Court awarded the workers $211,405 in back-pay and pension benefits but refused to award them penalties. The trial court said that under NASSCO's staffing requirements, a short-term work stoppage is considered a "layoff." NASSCO appealed, and several companies filed briefs backing NASSCO. But on November 30 of this year, the Court of Appeal, Fourth Appellate District, upheld the trial court's decision, stating NASSCO had to pay the workers for back-pay and pensions, but they were not awarded statutory penalties.

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Comments
4

I worked for Southwest Marine for a while. It was common to be laid off a few days before reaching 90 days (instant escort to the gate without notice) and then re-hired in a week or two, so they would not have to pay benefits. I moved on.

Dec. 4, 2017

CaptainObvious: I can see why you moved on. But supposing you can't find a job to move on to? Best, Don Bauder

Dec. 4, 2017

NASSCO has been treating its employees like dirt for about as long as I've lived here, and that's a looong time. Oh, the U-T used to print upbeat stories about it when it was booming and then would fall silent when business was down. The Reader had pieces about what it was like to actually work there, and it wasn't usually a petty picture. While some of that was just due to the nature of the work of shipbuilding and all the welding involved in that, much seemed avoidable if only the company wanted to spend a few bucks to improve working conditions.

Dec. 4, 2017

Visduh: Shipbuilding is definitely a highly cyclical business -- ergo, ups and downs are common. There is foreign competition that partly explains some of the penuriousness toward employees. Best, Don Bauder

Dec. 4, 2017

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