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2001 Maine Attorney General Reports and Opinions 1 (2001)

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0-1 HARLOWV Sr.. -.,41 FLOO.R
PORTL., ND. MAINE 0)4 LO 1-30 14
TEL: C207) 3,22-0260)
FAX: 1207) 822-0259
Teleohone: (207) 62E-9800                       STATE OF NIAINE
TOO: (2071 625-8E5                DEPARTMENT OF THE ATTORNEY GENERAL                       123 SWEDEN S1.. STE. 2
6 STATE HOUSE STATION                              1         476
AUGUSTA, MIAINE 043 33-0006                          : e207) 496-3291
August 1, 2001
Michael V. Frett, Director
Bureau of Labor Standards
45 State House Station
Augusta,     E 04333M-0045
Dear Director Frett:
You have asked our opinion as to the severance pay liability of an employer who has
owned a covered establishment for more than three years to employees who were employed at
that establishment for a period that is longer than the period of that employer's ownership of the
establishment.t1 This appears to be the first time that this Office has been asked to render a
formal opinion on this issue. For the reasons set forth below, it is the opinion of this Office that
the severance pay liability of the employer that has owned a covered establishment for more than
three years is one week's pay for each year the employee has worked in that establishment,
regardless of any change(s) in ownership of the establishment during an employee's period of
The Maine severance pay statute, 26 M.R.S.A. § 625-B (1988 & Supp. 2000),- was
enacted to address the 'economic recession that invariably results in a community where a large
number of people simultaneously lose their jobs' and to 'alleviate the adverse economic impact
upon the employees and the community in which they live.' State v. L-... Group, 1997 MiE
25.  1 12, n. 5, 690 A.2d 960, 965 (quoting L. D. 42-4, Statement of Fact (I 05,h Legis. 1971)). It is
[d~esiganed to protect MLvaine citizens from. the economic dislocation that accompanied closing of
largze establishments. Director of Bureau of Labor Standards v. Fort Halifax Packing Co.,
'Your question assumes that the prerequisites to liability under Mfaine's severance pay law have been satisfied. i.e.,
that an employer has relocated or terminated a covered establishment within the meaning of those terms as defined
by the statute. This opinion is limited to the issue of the amount of severance pay that is owed to employees who
have worked in a covered establishment for period of time that is longer than the time that it has been owned by the
owner of the facility at the time of the relocation or termination.
2 Formerly 26 M.R.S.A. § 625-A. The severance pay statute has its roots in an [387 enactment of the Legislature.
later codified as R.S. ch. 40 t(1903). which provided that employers and employees could contract Cor the employer
to pay a Corfeiture of the week's wages to an employee if the employer discharged the employee without providing
one week's notice; or for an employee to forfeit a week's wages if the employee quit without affording one week's
notice. Section 6254-B is laraely the result of substantial amendments in 197 1 and 19'73. which established severance
pay liability for certain employers who ceased or relocated operations. the calculation of which was generally based
on lena-Th of service.

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