Scott & Fetzer said its buy-out is threatened.

The proposed leveraged buy-out of Westlake, Ohio-based Scott & Fetzer may be reworked because the Labor Department says the employee stock ownership plan that is part of the $422-million proposal is being shortchanged, the company said. The employee plan would buy 41% of S&F;’s common shares at $62 each using a $182-million non-recourse loan from the company. According to Scott & Fetzer, the Labor Department holds that the ESOP should own 66.7% of the stock.