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Lawsuit started against NEMF

Published February 21. 2019 12:39PM

A Philadelphia law firm is stepping in to help employees laid off last week as part of New England Motor Freight’s bankruptcy filing and shutdown.

On behalf of hundreds of NEMF employees, Klehr Harrison Harvey Branzburg LLP filed a class-action lawsuit Feb. 14 in U.S. Bankruptcy Court in New Jersey claiming the company violated the federal Worker Adjustment and Retraining Notification Act.

The WARN Act requires companies to give employees 60 days notice of mass layoffs.

“The employees were not provided 60 days advance notice of their terminations,” lawyer Christopher Leavell wrote in the complaint.

NEMF filed Feb. 11 for Chapter 11 bankruptcy protection and announced plans to wind down its operations. The move surprised many of the company’s employees, who were out of work by the end of that week.

The company had 36 trucking terminals throughout the Mid-Atlantic, Northeast and Midwest, including one in Lehighton.

Around 200 people were employed at the Lehighton terminal, located along Mahoning Drive East. NEMF employed a total of 3,450 people nationwide.

Mary Carlin and Dan Webster are listed as the main plaintiffs in the class action lawsuit.

“The plaintiffs bring this action on behalf of themselves, and other similarly situated employees who were employed by NEMF and are being terminated without cause,” Leavell wrote. “They seek to recover 60 days wages and benefits, pursuant to the WARN Act, from NEMF.”

Several employees at the Lehighton plant said last week they were informed their benefits would be extended until mid-April. The company’s severance offering included the greater dollar amount of whatever vacation the employee had left, or two weeks pay.

According to The Wall Street Journal, the company reported assets of $100 million to $500 million and debts between $50 million and $100 million and $59 million owed to four banks as the company’s largest unsecured creditors.

Last year NEMF ranked as the 17th-largest “less-than-truckload” carrier in the country with revenue over $400 million. According to the state Department of Labor and Industry, it was in the top 25 largest employers in Carbon County for 2018.

In a letter to the workers of NEMF, President and Chief Operating Officer Thomas W. Connery wrote, “The costs of running an asset-based trucking company have soared; with labor and benefits consuming an ever larger portion of revenue.

“After much discussion as well as consultation with outside financial advisers, it was concluded that it does not make sense to continue operations to support a business in which our margins continue to shrink, thereby resulting in significant financial losses,” Connery wrote.

Klehr Harrison Harvey Branzburg is no stranger to class-action lawsuits involving potential WARN Act violations. It has had significant recoveries for employees in numerous other WARN Act cases including $35 million for 2,200 former employees of Qimonda North America; $6.775 million for 1,900 former employees of USF Red Star; and $4 million for 550 former employees of Arrow Trucking.

NEMF representatives have not returned a request for comment on the lawsuit.

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