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Eastman doesn't have to report layoffs to state

Sharon Hayes • Apr 2, 2009 at 12:00 AM

KINGSPORT — What looks like a loophole in federal law will allow Eastman Chemical Co. to bypass notifying the state of Tennessee of its upcoming layoff.

Eastman is expected to layoff between 200 and 300 people — most of them in Kingsport — this month. This Monday marks exactly four weeks since Eastman announced it would lay off those employees in four to six weeks.

As of Thursday, Eastman had not notified the Tennessee Department of Labor and Workforce Development of any employee reduction.

But it appears that Eastman will not have to comply with the notification law.

Enacted in 1988, the federal Worker Adjustment and Retraining Notification Act (WARN) is designed to protect workers, their families and communities by requiring employers to provide notice 60 days in advance of plant closings and mass layoffs. Employers are covered by WARN if they have 100 or more employees.

But for large employers, the law includes what appears to be a loophole in its definition of “mass layoff.”

According to the law, a mass layoff is defined as a reduction in force which “results in an employment loss at the single site of employment during any 30-day period for at least 33 percent of the employees (excluding any part-time employees).”

Eastman is expected to lay off 200 to 300 employees, and even if all of those affected were from the Kingsport plant, the reduction would still not equal at least 33 percent of Eastman’s work force of nearly 7,000 in Kingsport.

The company employs 10,500 people worldwide.

Eastman spokeswoman Betty Payne said the company is aware of the WARN Act.

“We know the definition of the WARN Act and will comply with what applies to us. But when you look at the definition of the act and you look at what we’ve said we plan to do, they don’t match up,” Payne said.

“Nothing has changed from our March 9 news release as far as timing and plans. We’re still working under what was announced at that time,” she said.

On March 9, Eastman issued a news release saying it would reduce costs by more than $100 million in response to the recession. Planned cuts included reducing base pay for U.S. employees by 5 percent effective March 30 and reducing its global work force by 200 to 300 employees within four to six weeks.

At the time, a company spokesman said most of the labor cuts would come from the Kingsport site because it has the largest number of employees.

Layoffs will be in targeted areas and will come mainly from non-operations.

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