EDWARDS, Chief Judge.
This appeal represents a cry for help from steelworkers and townspeople in the City of Youngstown, Ohio who are distressed by the prospective impact upon their lives and their city of the closing of two large steel mills. These two mills were built and have been operated by the United States Steel Corporation since the turn of the century. The Ohio Works began producing in 1901; the McDonald Works in 1918. The District Court which heard this cause of action found that as of the notice of closing, the two plants employed 3,500 employees.
The leading plaintiffs
In the background of this litigation is the obsolescence of the two plants concerned, occasioned both by the age of the facilities and machinery involved and by the changes in technology and marketing in steelmaking in the years intervening since the early nineteen hundreds.
For all of the years United States Steel has been operating in Youngstown, it has been a dominant factor in the lives of its thousands of employees and their families, and in the life of the city itself. The contemplated abrupt departure of United States Steel from Youngstown will, of course, have direct impact on 3,500 workers and their families. It will doubtless mean a devastating blow to them, to the business community and to the City of Youngstown itself. While we cannot read the future of Youngstown from this record, what the record does indicate clearly is that we deal with an economic tragedy of major proportion to Youngstown and Ohio's Mahoning Valley. As the District Judge who heard this case put the matter:
In the face of this tragedy, the steel worker local unions, the Congressman from this district, and the Attorney General of Ohio have sued United States Steel Corporation, asking the federal courts to order the United States Steel Corporation to keep the two plants at issue in operation. Alternatively, if they could not legally prevail on that issue, they have sought intervention of the courts by injunction to require the United States Steel Corporation to sell the two plants to the plaintiffs under an as yet
Defendant United States Steel Corporation answered plaintiffs' complaints, claiming that the plants were unprofitable and could not be made otherwise due to obsolescence and change in technology, markets, and transportation. The company also asserts an absolute right to make a business decision to discharge its former employees and abandon Youngstown. It states that there is no law in either the State of Ohio or the United States of America which provides either legal or equitable remedy for plaintiffs.
The District Judge, after originally restraining the corporation from ceasing operations as it had announced it would, and after advancing the case for prompt hearing, entered a formal opinion holding that the plants had become unprofitable and denying all relief. We believe the dispositive paragraphs of a lengthy opinion entered by the District Judge are the following:
Plaintiffs-appellants claim that certain of the District Judge's findings of fact are clearly erroneous, that he has misconstrued federal and state contract law, and that he failed to grant a hearing on their antitrust claims.
With this introduction, we turn to the legal issues presented by this appeal.
I. THE CAUSE OF ACTION
Plaintiffs assert jurisdiction in the federal courts, pursuant to Section 301 of the National Labor Relations Act, as amended, 29 U.S.C. § 185 (1976).
The primary issue in this case is a claim on the part of the steel worker plaintiffs that United States Steel made proposals to the plaintiffs and/or the membership of the plaintiffs to the general effect that if the workers at the two steel plants concerned put forth their best efforts in terms of productivity and thereby rendered the two plants "profitable," the plants would then not be closed. It is clear that this claimed contract does not rest upon any formal written document, either authorized or signed by the parties to this lawsuit.
Plaintiffs themselves recognize that they cannot rely upon any formal contract law. Nonetheless, in this section we shall discuss relationships between the parties which plaintiffs have not raised in order to place their issues in proper context.
As noted above, the steelworkers have a formal collective bargaining contract with the U.S. Steel Corporation. In this record there is no indication that there ever was any formal negotiation or amendment of that contract in relation to the issues of this case. Further, there is no indication in this record that the contract alleged in this complaint could be the subject for arbitration under Section 8(A)(2) of the Steelworkers Agreement of August 1, 1977:
Nor is there any indication in this appellate record that the claimed contract ever was made a subject for arbitration under Section 7(A)(8), which provides:
The collective bargaining agreement applicable in this period also contains three sections which management asserts bear directly upon its claim of unilateral right to close any plant. These provisions are two rather general paragraphs on page 15 of the contract entitled "Management" which recite as follows:
SECTION 16 — SEVERANCE ALLOWANCE
Weeks of Severance
Continuous Company Service Allowance3 years but less than 5 years 4 5 years but less than 7 years 6 7 years but less than 10 years 7 10 years or more 8
The contract from which we have been quoting is dated August 1, 1977, and provides for termination 60 days after written notice by either party, "but in any event shall not terminate earlier than August 1, 1980." This agreement was formally executed by authorized officers of the U.S. Steel Corporation and the United Steelworkers of America and its various negotiating committees, including the presidents of the two local unions representing the production workers at the two plants concerned, namely Local Union 1307 and 1330.
We are unable to construe any claims set forth in the instant litigation as being based upon any language contained in this collective bargaining agreement. Indeed, plaintiffs make no claim in this case that the United States Steel Corporation has violated the provisions of this section (or any section) of the collective bargaining agreement.
The defendant company also claims that plaintiffs reliance upon any oral contract is defeated by Section 2-B of the contract entitled "Local Working Conditions." Paragraph 5 thereof provides:
It is clear that the approvals called for in the just quoted paragraph never occurred. It is somewhat less clear that the extraordinary developments relied on by plaintiffs are properly termed "local working conditions."
The District Judge's rejection of any formal legal contract claims was clearly mandated by both state and federal contract law. The lack of such features as a written document, authorization by the corporate Board of Directors and the Executive Boards of the steelworkers national and local bodies, a stated contract period, specified mutual consideration, all serve to demonstrate that the minimum features of a formal legal contract are missing.
Appellants' principal argument in this appeal is, however, that the District Court should have found a contract based upon the equitable doctrine of promissory estoppel, which contract is enforceable in the federal courts under § 301 of the National Labor Relations Act.
II. PROMISSORY ESTOPPEL
The doctrine of promissory estoppel recognizes the possibility of the formation of a contract by action or forbearance on
Thus, appellants' contract claim depends essentially upon oral statements and newspaper releases concerning the efforts of the company to secure increased productivity by enlisting the help of the workers of the plant and upon the employee responses thereto. The representations as set forth in the steelworkers' complaint include many oral statements made over the "hotline" employed by management in the plants
Many similar statements were made by the company and were responded to by the employees. As 1977 and 1978 went by, there began to be statements over similar facilities and sometimes by company press releases indicating improvement in productivity at the two Youngstown facilities. Some of these included reference to "a complete turnaround" and reference to the Youngstown plants as "profitable" and once again viable.
The opposite side of the contract bargain alleged by plaintiffs consists of performance claimed by plaintiffs to have been induced by the sort of promises recited above and actions taken by them "in detrimental reliance" upon said promises.
Our examination of this issue requires much fuller recital of the promises and the actions they are alleged to have induced than we have quoted thus far. Plaintiffs' second amended complaint states the promises as follows:
"a. After a visit to the Ohio and McDonald Works by David Roderick, then President of Defendant United States Steel, in August 1977, William Ashton, then Superintendent of the Youngstown District for Defendant, on September 1, 1977, made the following statement over the intra-company or `hot line' telephone to Defendant's Youngstown employees:
"Mr. Ashton also released this statement to the press. At 3 P.M. on September 1, 1977, Mr. Ashton convened the grievance committees of Locals 1330 and 1307 in the conference room of the Youngstown District headquarters on Salt Springs Road and read them the press release.
"b. On or about September 14, 1977, Randall Walthius, an agent of Defendant, stated to the press that studies were under way
"c. On or about January 3, 1978, Edgar Speer, then Chairman of the Board of United States Steel, was asked by a NEW YORK TIMES reporter whether at some point the Ohio and McDonald Works would have to be closed, and answered, `Yup.'
"d. On or about January 4, 1978, Andrew Starsky, an agent of Defendant, clarified Mr. Speer's comment by stating to the press: `There has been no decision made in regard to closings in the Youngstown area.' Mr. Starsky added: `I don't think the situation is any different today than in September, when our people in Youngstown began a reorganization and consolidation of operations.'
"e. Also on January 4, 1978, William Kirwan, Superintendent of the Youngstown District for Defendant, made the following statements on the `hot line':
"f. On January 11, 1978, Mr. Kirwan also stated on the `hot line':
"g. At an undetermined date during the winter of 1977-78, J. Hepplewhite, an agent of Defendant, stated on the `hot line':
"h. On or about April 7, 1978, Mr. Kirwan stated on the `hot line':
"(Emphasis in original.)
"i. On or about April 17, 1978, Mr. Kirwan stated to the press about the Youngstown District facilities, `We'll be doing business here for some time to come.'
"j. On or about April 17, 1978, Mr. Walthius stated to the press about the Youngstown District facilities:
"k. On November 8, 1978, Mr. Kirwan stated on the `hot line':
"l. On December 21, 1978, Mr. Kirwan stated on the `hot line':
"m. On April 26, 1979, William Kirwan, C. I. Richards, Jr., an agent of Defendant, and R. M. Greer, an agent of Defendant, wrote a letter to the WALL STREET JOURNAL which was printed shortly thereafter. The letter stated:
"(Emphasis in original.) The sending of this letter was discussed with representatives of Locals 1330 and 1307, and the published letter was widely read by Defendant's Youngstown employees, as it was intended to be.
"n. On or about May 2, 1979, Mr. Kirwan stated to the press about the Youngstown District facilities:
"o. On or about June 5, 1979, the press attributed to Mr. Kirwan the statement that the Youngstown District finished 1978 in the black and even managed to win a profitability contest against U.S. Steel's much-newer plant in Baytown, Texas, which produces many of the same kinds of products.
"p. On or about June 18, 1979, David Roderick, Chairman of the Board of United States Steel, stated to the press and on ABC television:
"q. On or about November 1 and 2. 1979, Frederick Foote, an agent of Defendant, stated to a public meeting in Cleveland, Ohio convened by Clergy and Laity Concerned, and to the press:
"The responses and actions which steelworkers alleged were induced by these promises, and which represented detrimental reliance thereon, were as follows:
"b. Because of Defendant's promise and in detrimental reliance thereon, Defendant Youngstown employees immediately began to work harder and to increase their productivity. The results were evident as early as October 1977, when, for the first time in 1977 according to the method of accounting employed by Defendant, the Youngstown District made a monthly profit. Defendant's Manager of Accounting for the Youngstown District reported:
"(Emphasis in original.)
"c. In further illustration of the action and forbearance induced by Defendant's promise, in detrimental reliance thereon, on March 8, 1978 Mr. Kirwan stated on the `hot line':
"d. In further illustration of the action and forbearance induced by Defendant's promise, in detrimental reliance thereon, on May 12, 1978 Mr. Kirwan stated on the `hot line':
"f. In further illustration of the action and forbearance induced by Defendant's promise, in detrimental reliance thereon, on September 18, 1978, Al Tkatch, an agent of Defendant, stated on the `hot line':
"g. Because of Defendant's promise and in detrimental reliance thereon, Plaintiff Locals agreed to combine into one seniority list the machinists at the Ohio and McDonald Works. This negotiated understanding was embodied in a "Special Seniority Agreement Covering Craftsman Of McDonald Mills Machine Shop," signed by Charles L. Richards, Superintendent-Employee Relations for Defendant, and Marvin Weinstock, Staff Representative, United Steelworkers of America, and dated December 14, 1978. A similar understanding was negotiated for Boiler Shop employees in the two mills.
"h. As previously alleged in Paragraph 10 k of this Complaint on November 8, 1978 Mr. Kirwan stated on the `hot line': `Improved productivity is almost entirely up to you. I am asking each of you to consider how you may help in keeping Youngstown the going plant it is today.' Because of Defendant's promise and in detrimental reliance thereon, Defendant's Youngstown employees worked in such a manner that at an undetermined date subsequent to March 31, 1979 and before June 30, 1979, Mr. Kirwan stated on the `hot line':
"i. In further illustration of the action and forbearance induced by Defendant's promise, in detrimental reliance thereon, on or about June 5, 1979 Mr. Kirwan stated to the press that anxiety about the future of the Youngstown District had generated what he termed `a nonadversarial relationship' between management and the work force.
"j. Because of Defendant's promise and in detrimental reliance thereon, in August 1979 President Reno DePietro of Plaintiff Local 1307 and grievance committeeman Michael Mignogna met with David Houck, an agent of Defendant, to consider how to improve the profitability of the 12 mill at the McDonald Works. Defendant shut down the 12 mill so that DiPietro and Mignogna could meet the crews in the company conference room. DePietro and Mignogna relayed the message from management that if the mills could be kept profitable, they would stay open, and urged the men to work more efficiently. The men told their union representatives about problems in the 12 mill which impeded their work. In September 1979, DePietro and Mignogna met with Will McCorckle and George Benkey, agents of Defendant to discuss the status of the 12 mill. Benkey reported that attitudes were better and production was up.
"k. In October 1979, Robert Griffin, an agent of Defendant, convened the grievance committeeman of Plaintiff Local 1307 and told them that the 18 mill was going
"l. In further illustration of the action and reliance induced by Defendant's promise, in detrimental reliance thereon, representatives of Plaintiff Locals agreed to a `power schedule' in the scheduling of turns for the Ohio Works, the 7-17 mill at the McDonald Works, and the 18 mill at the McDonald Works. The purpose of the `power schedule' was to decrease Defendant's energy cost by shifting personnel from day turn to afternoon turn (3-11 P.M.) so as to equalize the energy consumption of the mills throughout the two turns. This proposal was unpopular with employees because it required them to give up time with their families. Plaintiff Locals could have protested this proposal through the grievance procedure as a departure from normal schedule pattern.
"m. Plaintiff Locals permitted Defendant to combine jobs so as to reduce Defendant's costs, although the previously existing jobs were well established by past practice and Plaintiff Locals could have grieved the changes had management imposed them unilaterally. Such job combinations included: The job of Pump Tender Helper at the Bessemer in the Ohio Works was combined with a job in the blast furnace pumphouse; coal handlers in the 9 Boiler House at the Ohio Works were put into the millwright gang as helpers and thereafter handled coal on an `as needed' basis; the second man on the Topper Turbine at the Ohio Works was combined with a job at the Boiler House; and the job of inspector of narrow-gauge locomotives in the Diesel Shop was abolished and performed thereafter on an `as needed' basis by other workers.
"n. Action and forbearance as described, supra, was continuously induced by Defendant through social occasions sponsored by Youngstown District management. In May 1979, newly elected officers of Plaintiff Locals and Youngstown District supervisors were convened at the Mahoning County Country Club, 700 E. Liberty Street, Girard, Ohio, for an affair known as `A Beer With The Boss.' Mr. Kirwan addressed the group. He described planned improvements in the Sinter Plant and the installation of a new coiler in the 18 mill. He predicted a steel shortage in the mid-1980's and an opportunity at that time for the Youngstown District to make the capital investment needed for longterm viability. In answer to a question from President Vasquez of Plaintiff Local 1330, Mr. Kirwan stated that the investment he had in mind was $250 million for electric furnaces and a continuous caster at the McDonald Works. He also stated that the mills were presently profitable and that the men should keep up their good work. In September 1979, Burning Yard employees were invited to dinner at Sokol Center Restaurant, 850 E. Midlothian Avenue, Youngstown, Ohio, where Mr. Kirwan and Mr. Tkatch congratulated them and told them they had saved their jobs.
"12. Also in detrimental reliance on Defendant's promise, individual Plaintiffs, or some of them, gave up opportunities to take other employment and committed themselves to major, long-term expenditures such as the purchase of homes. By way of illustration:
Based on these allegations, appellant steelworkers make this fundamental assertion which is the heart of the contract claim:
They also assert that "The Ohio and McDonald works would become profitable."
As we read this lengthy record, and as the District Judge read it, it does not contain any factual dispute over the allegations as to company statements or the responsive actions of steelworkers in relation thereto. It is beyond argument that the local management of U.S. Steel's Youngstown plants engaged in a major campaign to enlist employee participation in an all-out effort to make these two plants profitable in order to prevent their being closed. It is equally obvious that the employees responded wholeheartedly.
The District Judge, however, rejected the promissory estoppel contract theory on three grounds. The first ground was that none of the statements made by officers and employees of the company constituted a definite promise to continue operation of the plants if they did become profitable. The second ground was that the statements relied upon by plaintiffs were made by employees and public relations officers of the company and not by company officers. The third ground was a finding of fact that "The condition precedent of the alleged contract and promise — profitability of the Youngstown facilities — was never fulfilled, and the actions in contract and for detrimental reliance cannot be found for plaintiffs."
The District Judge's fundamental disposition of plaintiffs-appellants' contract claims is stated in this finding of fact:
Our examination of this record offers no ground for our holding that this finding of fact is "clearly erroneous." See Fed.R. Civ.P. 52(a).
The District Judge's findings on profitability bear quotation in full:
As noted above, our standard of review of findings of fact of the District Court is set forth in Rule 52(a) of the Federal Rules of Civil Procedure, which provides, "findings of fact shall not be set aside unless clearly erroneous and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses."
We believe that this record demonstrates without significant dispute that the profitability issue in the case depends in large part upon definition. The plaintiffs wish to employ the direct costs of operating the two plants, compared to the total selling price of their products. The difference, they contend, is "profit." This formula would eliminate such charges as corporate purchasing and sales expense allocable to the Youngstown plants, and allocable corporate management expenses including, but not limited to marketing, engineering, auditing, accounting, advertising. Obviously, any multiplant corporation could quickly go bankrupt if such a definition of profit was employed generally and over any period of time.
Plaintiffs-appellants point out, however, that this version of Youngstown profitability was employed by the Youngstown management in setting a goal for its employees and in statements which described achieving that goal. The standard of Restatement (Second) of Contracts § 90, upon which plaintiffs-appellants rely, however, is one of reasonable expectability of the "promise" detrimentally relied upon. The District Judge did not find, nor can we, that reliance upon a promise to keep these plants open on the basis of coverage of plant fixed costs was within reasonable expectability. We cannot hold that the District Judge erred legally or was "clearly erroneous" in his fact finding when he held that the "promise" to keep the plants open had to be read in the context of normal corporate profit accounting and that profitability had not been achieved.
Complete analysis of plaintiffs-appellants' promissory estoppel claims against the background of the collective bargaining agreement and Section 301 of the National Labor Relations Act would be a formidable task. We decline to undertake it, however, since even if we decided those issues favorably to plaintiffs, we would nonetheless be forced to decide the contract claim adversely to them because of failure to prove profitability.
III. THE COMMUNITY PROPERTY CLAIM
At a pretrial hearing of this case on February 28, 1980, the District Judge made a statement at some length about the relationship between the parties to this case and the public interest involved therein. He said:
Subsequently thereto, steelworkers' complaint was amended, realleging the first cause of action, paragraphs 1-49, claiming pendent jurisdiction over claims arising out of the laws of the State of Ohio and asserting as follows:
This court has examined these allegations with care and with great sympathy for the community interest reflected therein. Our problem in dealing with plaintiffs' fourth cause of action is one of authority. Neither in brief nor oral argument have plaintiffs pointed to any constitutional provision contained in either the Constitution of the United States or the Constitution of the State of Ohio, nor any law enacted by the United States Congress or the Legislature of Ohio, nor any case decided by the courts of either of these jurisdictions which would convey authority to this court to require the United States Steel Corporation to continue operations in Youngstown which its officers and Board of Directors had decided to discontinue on the basis of unprofitability.
This court has in fact dealt with this specific issue in Charland v. Norge Division, Borg-Warner Corp., 407 F.2d 1062 (6th Cir.), cert. denied, 395 U.S. 927, 89 S.Ct. 1786, 23 L.Ed.2d 245, rehearing denied, 396 U.S. 871, 90 S.Ct. 44, 24 L.Ed.2d 128 (1969). The case was, as appellants point out, substantially different from the present complaint in that there was a single individual plaintiff involved. He was, however, one of many Norge employees who had been thrown out of work by the removal of the Norge Muskegon Heights plant to Fort Smith, Arkansas. As is true in this case, there was a union contractual agreement for very limited severance pay. The union at the Norge plant in Muskegon Heights had succeeded in negotiating some severance pay and "very limited removal rights to Fort Smith." Appellant Charland refused to accept the union-negotiated removal agreement. We recite his position as follows:
Charland v. Norge Division, Borg-Warner Corp., supra at 1064.
This court's response to Charland's claims bears repetition here:
Id. at 1065.
Appellants, however, cite and rely upon a decision of the Supreme Court of the United States, Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77 (1877), claiming "that a corporation affected by the public interest, which seeks to take action injurious to that interest, may be restrained from doing so by the equitable powers of a court of law." This case does represent a fundamental statement of the power of the legislative branch of government over private business and private property. It pertained to the question as to whether or not the General Assembly of Illinois could, within the federal commerce clause and the due process clause of the Federal Constitution, "Fix by law the maximum of charges for the storage of grain in warehouses at Chicago and other places in the State having not less than one hundred thousand inhabitants." Justice Waite held that no federal constitutional principle was violated by the state legislative enactment.
The case is undoubtedly important precedent establishing power on the part of state legislatures to regulate private property (particularly public utilities) in the public interest. It cannot, however, properly be cited for holding that federal courts have such legislative power in their own hands.
We recognize that plaintiffs rely upon one sentence: "So, too, in matters which do
The problem of plant closing and plant removal from one section of the country to another is by no means new in American history. The former mill towns of New England, with their empty textile factory buildings, are monuments to the migration of textile manufacturers to the South, without hindrance from the Congress of the United States, from the legislatures of the states concerned, or, for that matter, from the courts of the land.
In the view of this court, formulation of public policy on the great issues involved in plant closings and removals is clearly the responsibility of the legislatures of the states or of the Congress of the United States.
We find no legal basis for judicial relief as to appellants' fourth cause of action.
IV. THE ANTITRUST CLAIM
Finally, appellants contend that the United States Steel Corporation has violated federal antitrust laws, 15 U.S.C. § 1 et seq. (1976). The essence of the antitrust complaint is that defendant United States Steel Corporation has refused to sell to the plaintiffs the Ohio and McDonald works which it seeks to abandon. Plaintiffs claim defendant has thus "exercised monopoly power" for the purpose of preventing a potential competitor from entering the steel market.
Steelworkers' reply brief contends that:
Steelworkers also contend on this issue that they have been denied their day in court on their antitrust claim.
Out of perhaps an excess of caution, we vacate the District Court judgment dismissing appellants' antitrust claim. We agree with the District Judge that as of the date of his order dismissing this aspect of the complaint, he did not have before him any binding offer to purchase the Youngstown plants of United States Steel. Appellants contend, however, that they were caught by surprise by the District Judge's sudden demand for their antitrust proofs or in lieu thereof a complete offer to prove the existence or early prospect of such an offer. They also argue, in effect, that the District Judge did not take into account their contention that the antitrust violation they charge against United States Steel — the public announcement by its President of a flat refusal to sell to any "subsidized" purchasers — helped make impossible the formulation of such an offer.
United States Steel's implied claim that it can, consistent with federal antitrust laws, refuse to do business with a corporation which has been aided, directly or indirectly
Summary judgment in antitrust matters is not favored absent a clarity of fact and law not apparent here. Poller v. Columbia Broadcasting, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962).
The judgment previously entered by the District Court is affirmed in all respects except as to plaintiffs-appellants' antitrust claim. The judgment of the District Court on that issue is vacated and remanded for further proceedings. The stay previously entered in the interest of appellate review is vacated as of five business days after the date of this opinion, unless the Supreme Court of the United States, or a Justice thereof, continues same in the meantime.
PROCEEDINGS AND DEBATES OF THE 96TH CONGRESS, FIRST SESSION
Vol. 125 Washington, Tuesday, July 31, 1979 No. 107 Senate
By Mr. RIEGLE:
S. 1608. A bill to require business concerns which undertake changes of operations to give notice to the Secretary of Labor, and to affected labor organizations, employees, and local governments; to require business concerns to provide assistance to employees who suffer an employment loss caused by changes of operations; to authorize the Secretary of Labor to provide assistance to such business concerns, and to such affected employees and local governments, and for other purposes; to the Committee on Labor and Human Resources.
NATIONAL EMPLOYMENT PRIORITIES ACT OF 1979
Mr. RIEGLE. Mr. President, today I am introducing the National Employment Priorities Act of 1979, which addresses the growing problem of large-scale plant closings and relocations across the country. This bill, which is also being introduced today in the House of Representatives by Representative William Ford from my home State of Michigan, is designed to assure that large corporations take into account the interests of long-time workers and of communities when they consider closing or relocating large plants.
In today's complex society, major economic decisions by large employers have far-reaching effects on the workers who have put years into their jobs, and on the communities whose economic base is so dependent on private industry. These corporate decisions should take into account their external social and economic effects on workers and on their local communities.
Mr. President, earlier proposals for dealing with plant closings and relocations have commonly focused on establishing a procedure for the Federal Government to determine which closings or relocations are economically justified and which are not. I do not believe that the Government should
The heart of the National Employment Priorities Act is a requirement that workers, local communities, and the Government receive prenotification of impending plant closings or relocations. In addition, workers who lose their jobs as a result of these major employment disruptions would receive partial payments and continued benefits from their employer for a year, reduced by any unemployment compensation, trade adjustment assistance, or outside earnings they may receive.
This bill would also help forestall employment disruptions. Federal assistance for employee buyouts of plants targeted for shutdown, economic assistance to companies which might otherwise be forced to close, and help for local governments adversely affected by plant closings would help to alleviate these problems. Targeted Federal training programs would also help displaced workers find new jobs.
As a member of the Labor and Human Resources Committee, I am vitally interested in the success of this legislation, but I am even more interested as the senior Senator from Michigan. Our State is facing the awful picture of some 10,000 Chrysler workers possibly losing their jobs at the "Dodge Main" plant in Detroit next year.
What kind of feelings can these families have when the rug is suddenly pulled out from under them, and they have no new job to go to? The recession is already at work in Michigan, and there are not any jobs left there. Last week, General Motors laid off 1,200 workers temporarily, so how can workers who lose their jobs permanently have any hope when this is going on?
The "Dodge Main" and other autoworkers are protected to a point, but the plant shutdown problem is extremely serious to smaller plants and communities. Take the Chrysler Lyons trim plant — hundreds of workers and their families affected there when the town's largest industry suddenly quit. Another example is the Lazy Boy Chair Co. in Monroe, where 1,900 workers were suddenly put on the street. Another similar example can be found in Livonia, where workers — again in hundreds — have lost their pensions because their employer decided to shut down a plant and move elsewhere. My office is involved in their case, but we need this legislation so that all agencies can get involved automatically, ahead of time, to forestall the problems the workers will face when they become unemployed.
Plant closing announcements in Michigan and elsewhere have become too common and predictable these days. Without fail, a company leaving town cites adverse economic conditions as their reason for leaving jobless workers and empty, gutted buildings behind. What could be more adverse than the grim economic conditions they leave behind for workers and their families. They still have a home, food, education to pay for. They have a family life suddenly disrupted. Hardworking men and women have to swallow their pride and ask for help. But before they have to ask — before a plant has to leave town and disrupt their lives and possibly entire communities — let us give them that help.
I am pleased to note that the Chairman of the Labor and Human Resources Committee (Mr. Williams) is extremely interested in the desperate need to assure that economic decisions concerning plant closings and relocations take into account the interests of workers and communities. In the coming months, the committee will be holding an extensive series of hearings on this subject, and on effective ways of alleviating this severe national problem.
I ask unanimous consent that the text of the National Employment Priorities Act and a section-by-section analysis be printed in the Record at this point.
There being no objection, the bill and summary were ordered to be printed in the Record, as follows:
Sec. 1. Short Title; Table of Contents.
Sec. 3. Definitions.
Sec. 4. Notice of Intent to Change Operations. —
Requires business concerns intending to undertake changes of operations causing employment losses for 100 employees or 15 percent of the workforce at an establishment, whichever is less, to notify the employees, any affected labor organizations, the Secretary of Labor, and local governments —
(1) at least 2 years in advance, if 500 employees or more will be affected;
(2) at least 18 months in advance, if from 100 to 500 employees will be affected;
(3) at least 6 months in advance, if fewer than 100 employees (but more than 15 percent of an establishment) will be affected.
Sec. 5. Investigation of Intended Change of Operations. —
Authorizes the Secretary of Labor to hold investigations into the economic reasons for the change of operations, the estimated extent of economic or social loss to employees and local governments, the feasibility of preventing or minimizing employment losses by modification of product lines and production techniques, and recommendations of local governments, labor organizations, and others to prevent or alleviate such losses.
Sec. 6. Report of Investigation. —
Instructs the Secretary of Labor to issue a report summarizing the findings and recommendations resulting from such investigations, including a description of the nature and extent of assistance which would be required to prevent or minimize losses.
Sec. 7. Ineligibility of certain employees for assistance. —
Disqualifies employees who entered employment after notice of the intended change of operations, if they were informed of the intended change.
Sec. 8. Notice of Employment Status. —
Requires business concerns suspending or terminating employment or reducing below 85 percent the wages of an employee as a result of a covered change of operations to notify such employee whether reemployment will be offered within 26 weeks. If reemployment is not pledged, the employee becomes eligible for assistance. If reemployment is pledged but not provided within 26 weeks, the employee receives lump-sum back benefits for the 26 week period and becomes eligible for assistance at the end of the 26 weeks.
Sec. 9. Transitional Assistance by Business Concerns. —
Requires business concerns to pay eligible employees 52 weeks of income maintenance payments equal to 85 percent of their previous weekly wage (or 100 percent if such employees are participating in approved training programs to prepare them for other employment) and to continue their benefits. Payments are reduced for outside earnings, unemployment compensation, and trade adjustment assistance, and are capped at $25,000 for 52-week period. No payments are required to employees who refuse comparable employment or who fail to participate satisfactorily in training or placement programs. Relocation assistance is required for transferred employees. Workers near retirement age receive payments for longer periods (depending on their age), with the federal government reimbursing companies for such extended payments.
Sec. 10. Secondary Liability. —
Provides that a company cannot escape liability for such payments by selling off plants scheduled for shutdown.
Sec. 11. Transfer of Employees. —
Requires companies to offer transfers within 3-year period to affected employees if comparable employment is available at other establishments of such company, to the extent such transfers do not violate collective bargaining agreements.
Sec. 12. Employee Benefit Plans. —
Continues coverage under employee benefit plans for period of income maintenance payments, and vests pension rights for workers with 5 years coverage who suffer eligible employment losses. Authorizes early retirement at reduced pensions for workers 55 and over.
Instructs Secretary of Labor to conduct training programs, job placement services, relocation assistance, and job search assistance for eligible employees, through existing as well as new programs, after consultation with management and labor.
Sec. 14. Related Retraining Assistance to Employees. —
Authorizes programs of retraining to enable employees to perform new employment tasks to avert plant closings.
Sec. 15. Eligibility of Business Concerns for Assistance. —
Provides that companies intending to change operations may submit a request for assistance if their resources would be inadequate to prevent the employment losses and such assistance would enable the companies to operate the establishments on an improved economic basis within a reasonable period of time.
Sec. 16. Assistance to Business Concerns. —
Authorizes the Secretary of Labor to provide loans, loan guarantees, and interest subsidies to eligible businesses, plus technical assistance including research and development in connection with new production or marketing techniques to create new employment opportunities.
Sec. 17. Targeted Federal Procurement. —
Authorizes the Secretary of Labor to issue a certificate of procurement credit to companies able to avert employment losses through federal procurement contracts, which will discount such companies bids by 5 percent.
Sec. 18. Eligibility of Local Governments for Assistance. —
Provides that local governments suffering a substantial decrease in tax revenue, a substantial increase in the demand for social services, or a substantial increase in unemployment are eligible for assistance.
Sec. 19. Assistance to Local Governments. —
Authorizes the Secretary of Labor to provide grants, loans, and loan guarantees to eligible local governments for providing social services and implementing public works projects, giving priority to public works projects in geographical areas of high unemployment which will make such areas more attractive for commercial investment, cause long-term increase in employment opportunities, provide an efficient means of increasing employment, and further other national goals such as improving environmental quality and increases [sic] energy development and conservation.
Sec. 20. Eligibility of Other Employers and of Cooperative Associations of Employees for Assistance. —
Provides that employers or cooperative employee associations are eligible for assistance if they will create or expand employment opportunities over a substantial period of time and substantial equivalent assistance is not otherwise available.
Sec. 21. Assistance to Other Employers and to Cooperative Associations of Employees. —
Authorizes the Secretary of Labor to provide loans, loan guarantees, and technical assistance for expanding operations at or acquiring ownership of plants undergoing a covered change of operations, for constructing new establishments, or for undertaking research and development projects to identify new markets and new production and marketing techniques.
Sec. 22. Priority for Providing Assistance. —
Gives priority to operations with a reasonable likelihood of providing continuous employment over a substantial period of time.
Sec. 23. Liability for Loss of Revenue. —
Requires companies to pay local governments 85 percent of the tax revenue lost over the first complete taxable year after a covered change of operations. In the case of a transfer of operations outside of the United States where the Secretary of Labor finds an economically viable alternative to such transfer existed, the company will be
Sec. 24. Criminal Violations and Penalties. —
Provides penalties of up to $1,000 or 1 year in jail or both for knowingly making false statements or failing to disclose material facts for the purpose of obtaining assistance under this Act. Provides penalties of up to $10,000 or 5 years in jail or both for failing to give notice of [sic] knowingly making false statements of material fact or failing to disclose material facts required to be disclosed under this Act.
Sec. 25. Civil Violations and Penalties. —
Provides civil penalties for other violations of the Act equal to investment tax credits, deductions or depreciation, business expense deductions, half the value of economic benefits from foreign countries, and reduced wages and unemployment taxes related to establishments undergoing covered changes of operations.
Sec. 26. Violations of Employees' Rights. —
Prohibits discrimination against employees because of their exercise of rights or participation in activities under this Act.
Sec. 27. Recovery of Overpayments. —
Authorizes the Secretary of Labor to recovery (through reduced or withheld assistance or otherwise) overpayments resulting from false statements or concealed material facts.
Sec. 28. Reserves; Recording Requirements Relating to Loans. —
Instructs the Secretary of Labor to maintain operating reserves and to record mortgages in accordance with state law.
Sec. 29. Congressional Disapproval of Rules. —
Provides for invalidation of proposed rules through adoption of a concurrent resolution within 30 days following their proposal.
Sec. 30. Reports; Legislative Proposals. —
Instructs the Secretary of Labor to evaluate and report upon the effectiveness of programs after 3 years of operations and to prepare proposals for legislation to provide assistance to local governments and to require business concerns to report employment opportunities for inclusion in a nationwide computerized job bank and matching program under CETA.
Sec. 31. General Powers of Secretary. —
Sec. 32. Implementation of Employment Policies Through National Employment Priorities Administration. —
Authorizes the Secretary of Labor to delegate functions to the National Employment Priorities Administration.
Sec. 33. National Employment Priorities Administration. —
Establishes a National Employment Priorities Administration within the Department of Labor.
Sec. 34. National Employment Priorities Advisory Council. —
Establishes a National Employment Priorities Advisory Council of 15 government, labor, business, and public members.
Sec. 35. Amendments to Other Laws.
Sec. 36. Authorization of Appropriations. —
Authorizes such sums as may be necessary.
29 U.S.C. § 185 (1976).