The recently bankrupt New Century Transportation has just been hit with a lawsuit by one of its former drivers. The company had about 1,500 employees, 1,000 or so of which were drivers, none of whom received advanced notice that the company would be declaring bankruptcy and that they would be losing their jobs.
The Worker Adjustment and Retraining Notification (WARN) Act states that companies must give employees at least 60 days notice prior to their dismissal in these circumstances. The act is meant to prevent mass layoffs and to protect employees in the event of a business shutdown by giving them time to find themselves another job.
The class action suit brought by former employee Robert Kearney on behalf of himself and his fellow drivers alleges that New Century Transportation violated the WARN act by failing to notify them of the company’s imminent bankruptcy. He is seeking 60 days of wages, benefits, and severance pay equal to one week of wages for each full year of employment with the company.
The company was a nationwide carrier with $273 million in revenue in 2012, but court documents show that it had between $10 and $50 million in liabilities and between $10 and $50 million in assets. A statement by CEO Terry Gilbert claimed that “the best way to maximize value for the benefit of all creditors is to wind down the companies in a bankruptcy proceeding.”
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Source: overdrive, ttnews, burlingtoncounty
The reason giving notice is avoided is prevent other creditors from knowing until the last second. Employees are far enough down the list, there’s usually nothing left anyway, if anything was even owed to workers in the first place. Unless employment law is violated, at will jobs can be terminated without notice.
This article isn’t about trucking, it’s about labor practice and in these times, tough conditions in all businesses and industries.
Won’t be nothing left for employee’s. Another company who had the wrong leadership. Drove it into the ground by under cutting rates to get business and I think you have to also include increased costs in equipment, labor, training, EPA and DOT regulations. Frankly, as a owner operator, I don’t see how many of these companies make much money. Drivers want new trucks, lots of miles and be home every weekend. Not in today’s trucking will that be a business model for success. But the new way to run a business in trucking, is run it into the ground but look good for as long as you can.
Then simply fade away into bankruptcy. Dry van freight is not going to make you wealthy. Not unless you find yourself with a lot of good customers willing to pay you for good service. Much of dry van is get it moved cheap as possible.
“Much of dry van is get it moved cheap as possible.”
Was it ever NOT that way?
That’s true. It’s called competition and it’s true for any commodity business, not only trucking.
There are exceptions to the WARN act and this closing falls right in there.
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(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings;
(2) unforeseeable business circumstances. 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
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I think Willie Wonka put it best: “You lose, sir! You get NOTHING!”
If the company owes it’s employees wages, the employees are paid first before anyone else. I believe there is a cap of about $11,000 per employee, so i’m not sure the driver will get all the money he’s asking for.
I would also challenge the fact that the company may not of had 60 days in which to inform the employees. The company might of been hoping they could of won a new contract or drummed up more business, but if they gave a 60 day notice, it might of speed up the closing due to customers no longer wanting to use the company knowing they were headed to BK. Customers might have started paying later and later or stopped paying the company at all thinking if the company goes into BK, they wouldn’t have to pay………..thereby speeding up the BK filing.
This is happening more and more where they file for bankruptcy shut the doors and everyone gets screwed. I can understand that unfortunate things happen in business but hey trim your upper mgmt. Run a trimmer machine and ya might get to save your business. In other words no Italian vacation sell the wife’s Mercedes sell the big house and maybe cut your bonus out to. Its become easier to just file bankruptcy then to cut overhead. I as m not saying thats what happened here but it certainly happens in more than half the case. Just blatant miss management by upper echelon.
Get over it n find a job. Plenty of trucking companies hiring
Didn’t this company form from another bankrupt company?
I hope this guy wins. I’m surprised how many drivers here support the company.
New Century was designed as a high pay, high performance trucking company. Pay the drivers well, treat the freight very well, get it there on time and charge through the nose for it. They ran illegal and had excellent drivers & equipment. Everything was fine until they had to run legal. They have no clue to run within the hours of service with clean logs. With out their top quality drivers driving their butts off, New Century became just another NE carrier.
They used to pick up freight in New England and have it is Chicago, Miami or Dallas within 24 to 30 hours with no damage. They were special. When they had to compete on even ground, the specialness evaporated. One thing I will give them, as long as Harry was running things, at Jevic or New Century, they did well.
Harry takes care of Harru