Eastern Fine avoids layoff payoff

BREWER – The 125 workers laid off Tuesday from Eastern Fine Paper Co. in Brewer will not receive Workers Adjustment & Retraining Notification Act funds, money companies usually are required to pay displaced employees under federal law.

“We are actually acting under the clause in the WARN Act for unforeseeable business circumstances,” said Doug Walsh, executive vice president of operations for Eastern Pulp & Paper Corp., parent company of the Brewer plant. “We felt we gave as much notice as we possibly could but less than the 60 days that is required under the WARN Act.”

Eastern Fine workers received no warning their jobs were being eliminated. Affected workers learned about the indefinite shutdown of the No. 2 paper machine the same day they were laid off.

Walsh said the dismal market for pulp and paper was the reason behind the actions. He said there was no way to predict the situation.

“Basically what happened is that pricing of our paper product and demand dropped dramatically in the last few weeks,” he said. “Otherwise, we would not have shut this machine down.”

The WARN Act became law in 1989. The program “offers protection to workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs,” according to the U.S. Department of Labor’s Employment and Training Administration Web site.

The federal government requires employers who lay off workers without the 60-day notice to pay the employees for the time period. However, Eastern Fine Paper’s unforeseeable business circumstances are an exception to the advance notice.

“This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required,” the Web site stated. “If an employer provides less than 60 days advance notice of a closing or layoff … the employer bears the burden of proof that the conditions for the exception have been met. The employer also must give as much notice as is practicable.”

The Maine Bureau of Labor Standards, which falls under the Maine Department of Labor, will investigate whether the layoffs were unforeseeable.

The Brewer paper company and Lincoln Pulp & Paper fall under the corporate umbrella of Eastern Pulp & Paper Corp. located in Amherst, Mass. The conglomerate filed for bankruptcy in September 2000 and has been operating under Chapter 11 since then.

The company’s restructuring this week eliminated approximately 125 jobs at Brewer, 100 hourly and 25 salaried, but will leave approximately 725 employees still working at the two mills.

Eastern Fine Paper officials already have met with all of the salaried employees who were laid off and now will do the same with the hourly employees. They expect the process to be completed by Friday.

The company’s severance packages have not been determined, but Walsh said the company would do all it could for the workers.

“We have proposed a severance package for them, even though we may not be required to,” Walsh said. “We wanted to do everything that we could. We’re extremely sorry that these people had to lose employment and for any impact this is having on their families.”

The layoffs are an effort to preserve the remaining Eastern Paper jobs in Maine, Walsh said.

“Our current business plan is predicated on running all of the remaining equipment at Brewer and Lincoln in full,” he said. “Obviously, if conditions change we would have to make changes accordingly.”

The possibility of the No. 2 machine being restarted in the future is bleak, said Walsh.

“The [federal] security paper was not being manufactured on this machine; it was made on the No. 1 machine,” he said. “Most of the products that were made on the No. 2 machine are commodity products that are in low demand and bring very low prices.

“Our ability to compete is based on making specialty products. Commodity products are nonspecialized printing papers for copying or envelopes or mail solicitations,” Walsh added.

Steve Bost, city manager for Brewer, said he spoke to Gov. John E. Baldacci earlier in the week. He said the governor is sending several members of his administration to Brewer to discuss the aftermath of the shutdown not only with company officials but also with city officials. Bost said he hopes the meeting would be held before the end of this week. Walsh said meetings among company officials, the union and workers will continue throughout the week.