Former employees and truck drivers for FreightWorks LLC claim the Rutherfordton, North Carolina-based truckload carrier violated federal law by failing to offer a 60-day advance notice of a planned shutdown before firing nearly 200 staff on March 6.
The 2 named class representatives, Martin Oshea and Misty Chapman, together with 18 named plaintiffs, filed a 17-page amended class motion criticism against FreightWorks LLC and its nine entities on May 15, nearly two months after initially filing suit against the trucking company and its entities on March 23.
The plaintiffs claim to have been laid off without cause amid a “mass layoff and/or plant closing” as defined within the Employee Adjustment and Retraining Notification (WARN) Act.
The suit alleges that FreightWorks is roofed by the WARN Act since the trucking company employed 100 or more staff on the time of the mass layoffs. The previous employees state that FreightWorks didn’t pay their wages, salary, commissions, bonuses and holiday and vacation pay for 60 days following their terminations.
Attorney Julian H. Wright Jr. of Robinson Bradshaw is representing FreightWorks within the WARN Act litigation.
“I can let you know that FreightWorks disagrees with the allegations within the criticism,” Wright told FreightWaves on Monday. “They disagree with how the criticism attempts to spin WARN Act obligations and FreightWorks intends to defend itself vigorously within the litigation.”
“The plaintiffs filed this amended criticism and we’re in discussions with them to just accept service of the amended criticism after which we’ll presumably proceed with the litigation,” Wright said.
FreightWorks filed a WARN Act notice on March 31 with the North Carolina Department of Commerce, eight days after the initial lawsuit in search of class motion status against FreightWorks LLC and its entities was filed within the U.S. District Court for the Western District of North Carolina.
The Warn Act notice, which was issued 25 days after FreightWorks’ mass layoffs, states, “As previously discussed, FreightWorks didn’t understand that the WARN Act applied to the corporate’s situation earlier this month.”
While Joshua Farmer, president of FreightWorks, is listed as a contact within the WARN notice, the letter was signed by Lori Cornelius, human resources manager for FreightWorks.
“The layoffs took place in stages, depending upon the necessity for staff as the corporate accomplished its freight contract obligations, assessed the total impact of the final business downturn affecting the corporate, analyzed the impact of a big customer’s decision to curtain its business and started considering restructuring alternatives,” Cornelius wrote within the notice.
As of publication, Cornelius had not responded to FreightWaves’ request to make clear whether the trucking company had any prior discussions with the North Carolina Department of Commerce about FreightWorks’ failure to file a 60-day notice with the federal government agency prior to its announcement that it was ceasing operations.
Nonetheless, inside days of the initial class motion criticism being filed, former employees of FreightWorks were sent a release of claims form, offering them $1,500 in the event that they “hereby irrevocably and unconditionally release and fully discharge FreightWorks Holding LLC, FreightWorks Admin, FreightWorks LLC, FreightWorks Real Estate LLC, FreightWorks Staffing LLC and PropertyWorks II, their subsidiaries and affiliates and its and their predecessors, successors and assigns, in addition to its and their officers, directors, employees, attorneys and agents from any and all causes of motion under the lawsuit…”
While Wright was unable to supply a precise variety of what number of ex-employees signed the discharge of claims form, he said a “significant number took the $1,500 settlements.”
Wright confirmed he has reviewed materials including proposed releases that he “understands have gone out to former employees.”
Shutdown or restructure?
Former FreightWorks employees say they were blindsided on March 6 after receiving a video message from Joyce Siqueira, vp of operations for FreightWorks, who said the “most honorable path that we will take for the advantage of our employees, our customers and our other stakeholders is an orderly closing of the corporate.”
![](https://www.freightwaves.com/wp-content/uploads/2023/05/22/FreightWorks_VP-1-600x315-1.png)
A former FreightWorks worker also shared the memo sent to employees and drivers on May 6 — dated for “immediate release on March 10” — but it surely appears the truckload carrier was forced to stop operations sooner than expected.
“It’s with the heaviest of hearts that we announced to our team that FreightWorks is shutting down,” the unsigned memo states.
On the time of the mass layoffs, Siqueira said FreightWorks would now not be picking up loads.
Siqueira said the corporate was unable to see a path forward after a number of of its core contract customers abruptly demanded significant rate reductions, amounting to tens of millions of dollars. The death knell occurred when one in every of FreightWorks’ largest contract customers “pulled a big percentage of the corporate’s freight” on Feb. 28.
Nonetheless, eight days after FreightWorks announced it was shutting down, the carrier updated its MCS-150 form to state that it had 186 power units and 140 drivers. A month later, on April 12, FreightWorks updated its MCS-150 form to state that it has 186 power units and 25 drivers, leaving ex-employees confused concerning the operating status of the corporate.
And plenty of ex-FreightWorks employees and drivers say the corporate is continuous to operate, but on a smaller scale and has no plans to “stop operations.”
Farmer, who serves as president of FreightWorks LLC and its other entities, told FreightWaves in early April that it had sold its freight brokerage, FreightWorks Logistics, to an unnamed buyer prior to the corporate’s plan to wind down operations.
While he failed to supply the name of the brand new brokerage owner, the phone number and post office box number for FreightWorks Logistics, which was granted its broker authority by the Federal Motor Carrier Safety Administration in October 2014, is identical as its trucking company, FreightWorks Transportation & Logistics. The brokerage’s insurance policy can also be listed as belonging to FreightWorks Logistics.
Wright said he’s unable to comment on the claims of the freight brokerage and trucking company’s operations as he was hired to litigate the WARN Act lawsuit.
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