Illinois Department of Labor launches WARN Act probe into Alton Steel closure

SEATTLE (Scrap Monster): The Illinois Department of Labor has opened a WARN Act investigation into the sudden closing of Alton Steel Inc.

Paul Cicchini, a public information officer with the Illinois Department of Labor, confirmed the investigation in an email on Tuesday.

When contacted by The Telegraph, an Alton Steel spokeswoman said, "Alton Steel does not discuss pending or potential legal or governmental matters." 

In his email, Cicchini included a statement from the Department of Labor.

“The Illinois Department of Labor has opened an investigation into Alton Steel after learning on January 27 that workers at the Alton plant would begin losing their jobs on January 31,” it stated. “Under the state Worker Adjustment and Retraining Notification Act (WARN), employers with 75 or more full-time employees are required to give workers and state and local government officials 60 days advance notice of a plant closing or mass layoff. The Department sent the company a subpoena as part of a broader effort to determine whether Alton Steel violated the WARN Act.”

The steel company publicly announced Jan. 26 that it was ceasing operations at the end of the week, and a formal notice was sent Jan. 27 to the Illinois Department of Commerce and Economic Opportunity.

More than 250 employees were affected.

Although the Worker Adjustment and Retraining Act requires 60 days' notice when large employers lay off workers, it does allow exceptions.

In a letter to DCEO Southern Regional Manager John Ray from Ann Lesemann, Alton Steel’s director of human resources, announcing the closure, the company cited “unforeseeable business circumstances” and “faltering company” exceptions under the Act.

Specifically, the letter stated that “Alton Steel's material supplier took possession of substantial property, including raw materials, that the supplier claimed as collateral leaving Alton Steel without the necessary material to continue operations and without the ability to secure another source due to its financial condition.”

It also stated that the company had been “actively seeking capital” to sustain operations, and that, although ultimately unsuccessful, a WARN notice would have made that impossible.

Cicchini noted that this would be taken into consideration.

Specifically, the letter stated that “Alton Steel's material supplier took possession of substantial property, including raw materials, that the supplier claimed as collateral leaving Alton Steel without the necessary material to continue operations and without the ability to secure another source due to its financial condition.”

It also stated that the company had been “actively seeking capital” to sustain operations, and that, although ultimately unsuccessful, a WARN notice would have made that impossible.

Cicchini noted that this would be taken into consideration.

Courtesy: www.thetelegraph.com