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Questions remain over Daniel Defense layoffs

POSTED: October 12, 2017 10:49 a.m.

Bryan County weapons manufacturer Daniel Defense has confirmed that it laid off a number of employees recently, but questions remain regarding how many were affected and what the future of the company looks like.

The layoffs, which began Sept. 29 and concluded Oct. 2, were not related to the mass shooting in Las Vegas that occurred Oct. 1. (See related item below.)

When asked by the Bryan County News how many employees were impacted and what the current workforce is, the company would only say that “The layoff affected a significant number of employees.”

Daniel Defense in a response to several questions emailed by the News did say that the layoffs did not trigger the provisions of the WARN Act under federal labor law. That 1988 law says an exception to the act is made if between 50 and 499 employees lose their jobs and that number is less than 33 percent of the total workforce.

At least one employee who was laid off told the Bryan County News that he believes about 100 employees out of 330 were let go.

Information about the layoffs was first reported by Recoil, an online and print publication devoted to firearms. That story can be found at: http://www.recoilweb.com/daniel-defense-lays-off-large-percentage-of-its-workforce-130055.html.

According to Recoil’s reporting and former employees who spoke with the Bryan County News on the condition of anonymity, employees who were laid off were not given severance packages and their health insurance was canceled as of midnight Oct. 2. Some employees who were let go had signed non-compete agreements when they began working at Daniel Defense.

It is unclear whether those agreements are enforceable because the employees did not leave on their own accord and were not let go for cause.

The company said that if offered to aid with the continuation of health benefits for affected workers through COBRA and is providing outplacement services.

Daniel Defense also said non-compete agreements signed by employees as a condition of employment “are in force and enforceable related to employees affected by the layoff,” but that no laid-off employees were “asked or required to sign anything on their departure date.”

There had been speculation that employees without non-compete agreements had been asked to sign them on their separation date.

In a February interview with founder and CEO Marty Daniel, Forbes magazine said the company had $73 million in sales in 2016 with a 35 percent gross profit.

Daniel Defense moved from Garden City to Black Creek in 2008. At the time, the company said it employed about 55 people and would expand to 100 in 2009 when construction was completed at the Interstate Commerce Centre off I-16 in North Bryan County. Vice President Cindy Daniel at the time said the jobs paid between $50,000 and $100,000 annually.

Last year the company announced a $29.5 million expansion in Black Creek that it said would create 75 new jobs. The company also announced at the time it would move its South Carolina operations to Black Creek.

Anna Chafin, CEO of the Development Authority of Bryan County, was unavailable to answer questions posed to her in an email from the Bryan County News about the specifics of the 2016 agreement between the county agency and the company. The News will seek to obtain a copy of the agreement.

“Daniel Defense told us the company’s current headcount after the layoffs is on track to be what they committed to for the consolidation/expansion,” Chafin said in a prepared statement.

One former employee told the Bryan County News he felt the decision was “due to a series of bad financial decisions.” The employee asked that he not be named for fear of retribution. The News was able to confirm he was laid off.

Daniel Defense’s response to the Bryan County News said “the company has been and is currently in compliance with all provisions of the agreement” with the DABC. The agreement requires the company to make public the total investment and number of “qualifying employees” by 2023.

The South Carolina expansion was announced in 2011 with a $5.3 million investment that the company said would create 100 jobs there.

Although the company did not release a dollar figure, Daniel Defense was either the primary or associate sponsor of a NASCAR vehicle in 17 races in 2017. Their comment to the News was that the sponsorship “is a portion of our 2017 marketing strategy.”

The company announced in January 2014 that a $20 million expansion in Black Creek was expected to add 120 jobs over five years, but two months later Daniel Defense announced a 14 percent net reduction in its workforce due to “market conditions,” a release from the company said at the time.

This time around, the company’s statement said “The layoff was necessary due to market conditions” and that “the investment in the new facility is an enterprise long-term strategy that allows for product diversification and growth as well as operational and management efficiencies.”

The company gained national media attention in December 2013 after a commercial it wanted to run during the 2014 Super Bowl was rejected because it violated the NFL’s policy on advertising firearms and ammunition. Stores that sell those products, however, can advertise. Marty Daniel appeared on the Fox News Channel’s Fox & Friends at the time, which showed a clip of the commercial.

While the ad did not mention weapons — the company also sells shirts, pocket knives, hats and other outdoor gear — it closed with a graphic showing the company’s DDM4 automatic rifle.

“We actually went to the rule book and pulled out their set of rules and said, ‘Hey, we want to create an ad that we (think would resonate with NFL fans),” Daniel said during his Fox News appearance. “Inside their rule set we scripted this ad, we wrote it, produced it and sent it in for approval and got a big no.”

A Google search of “Daniel Defense Super Bowl ad” at the time brought up more than 11.2 million results, linking to stories or blogs on sites ranging from Guns.com to National Review to the Huffington Post.

Company confirms Las Vegas connection

Daniel Defense confirmed Monday that at least one of its products was spotted in images released by Las Vegas law enforcement in the wake of the Oct. 1 mass shooting there.

Layne Newman, public relations specialist with the Black Creek-based firearms company, said photos of Stephen Paddock’s Mandalay Bay hotel room after the shooting show at least one Daniel Defense weapon. Paddock used multiple weapons to fire on concert-goers from the room, killing 59 and injuring more than 520.

National media have reported that four Daniel Defense products were found in Paddock’s room. One of the company’s AR-15s, named by the NRA as the “2017 Gun of the Year,” was found in the room.

It is unclear whether the Daniel Defense weapons was fired during the attack.

Newman said the company is still trying to determine how Paddock came to own the weapons. She said Daniel Defense does little direct sales to customers, working instead through distributors. Officials said Paddock purchased a large number of weapons before the attack in Utah, Nevada and Texas.

When asked about possible lawsuits stemming from the incident, the company declined to comment.

“Due to the recent tragedy in Las Vegas and out of our deepest respects for the victims, families and all of those affected by the tragedy, Daniel Defense will withhold from making a comment regarding this matter at this time,” read a prepared statement.

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