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The Logistics Company is not closing, CEO says

By Jenna Shackelford, posted Feb 4, 2022 on BizFayetteville.com

After a recent posting of a 2022 NC WARN Release went live online, The Logistics Company [TLC] wants the business community to know that they are not only operating – they are thriving. 

According to the North Carolina Department of Commerce, “A federal law, the WARN Act, governs the process for filing a notice. The act seeks to protect workers, their families, and their communities by requiring employers to provide 60 days’ advance notice of certain plant closings and mass layoffs.” 

While the reports are available online, the information publicly available does not always give a comprehensive overview of the reason for the filing of the notice. Teresa Fletcher, CEO of The Logistics Company, explained to Greater Fayetteville Business Journal how the NC WARN release’s verbiage of “Closure Permanent” could be misunderstood. 

“Under the department of labor requirements for government contractors, government contractors who are over a certain size or have operations on a particular project that are over a certain size are required to give notice to those employees if there’s a chance that the contract operations will not continue,” she said. “And, that chance doesn’t necessarily mean that the contract operations won’t continue, but that particular contractor won’t.”

Operations won’t cease if an extension is given, but either way, she says, the operations wouldn’t cease; they would just go to another contractor. 

This will happen again in six months, and probably again after that, she said, but The Logistics Company is nowhere near shuttering its doors. In fact, the company is providing services to the United States Army across the country, working in 32 states. 

According to the WARN Act, employers must provide notice when a covered employer “Closes a facility or discontinues an operating unit (see glossary) permanently or temporarily, affecting at least 50 employees, not counting part-time workers, at a single site of employment. A plant closing also occurs when an employer closes an operating unit that has fewer than 50 workers but that closing also involves the layoff of enough other workers to make the total number of layoffs 50 or more.” 

Recently, a WARN release said that 44 employees could be laid off from TLC, but Fletcher explained that black-and-white verbiage is not always clear when dealing with contract work. 

“The vast majority of government contracts are issued for five-year periods. As the five-year contract ends the government will release a new Request for Proposal and offerors will bid on the follow-on work,” Fletcher explained. “Contractors are required to send notice to employees … if they have not received modifications to extend the Period of Performance and there is a possibility (however remote) that the work will end.  If TLC has not received notice of the Government’s Intent to Exercise the Option by the 60-day requirement in FAR 52.217-8 TLC is required to provide notice to the employees in accordance with the Warn Act.”

So, what does a notice contain? According to 20 CFR § 639.7, “Notice may be given conditional upon the occurrence or nonoccurrence of an event, such as the renewal of a major contract, only when the event is definite and the consequences of its occurrence or nonoccurrence will necessarily, in the normal course of business, lead to a covered plant closing or mass layoff less than 60 days after the event. For example, if the non-renewal of a major contract will lead to the closing of the plant that produces the articles supplied under the contract 30 days after the contract expires, the employer may give notice at least 60 days in advance of the projected closing date which states that if the contract is not renewed, the plant closing will occur on the projected date.”

Moreover, The Logistics Company’s contract contains FAR clause 52.217-8 Option to Extend Services (Nov 1999) to further eliminate any confusion. 

It read, “The Government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the Contractor within 60 days of completion of the contract.”

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