A class action lawsuit has been filed against Arrow Trucking because of the abrupt way it ceased operations last week, while further details emerge about the company's financial woes and its chairwoman says she's uncertain about the future.
Arrow Trucking suddenly ceased operations on Dec. 21, laying off all 1400 employees without notice, turning off the phones, shutting down the web site, and shutting down headquarters. Many drivers first found out when their fuel cards no longer worked. Although Daimler Truck Financial, which financed most of the company's trucks, offered drivers $200 or a Greyhound bus ticket home (and Navistar came out with a similar offer for drivers of its make), many who had too many personal belongings, pets or other complications were stranded far from home just days before Christmas. (See "Tulsa's Arrow Trucking Suspends Operations," 12/23/2009)
According to the Tulsa World, Arrow Trucking's business crashed to a halt when Transportation Alliance Bank of Ogden, Utah, froze the company's fuel credit cards and operating capital. (Transportation Alliance Bank is a subsidiary of Flying J, a company which has been struggling financially itself, announcing earlier this year a merger with Pilot Travel Centers that would allow it to emerge from Chapter 11 bankruptcy protection.)
Philadelphia lawyer Charles Ercole, a partner with the law firm of Klehr Harrison Harvey Bransburg LLP, filed a class action lawsuit on behalf of 1,400 former employees of the Tulsa, Okla.-based flatbed carrier. The suit alleges violations of the Worker Adjustment and Retraining Notification Act (better known as the WARN Act), as well as state wage payment laws, for the company's failure to give 60 days notice before closing, and for bouncing paychecks prior to closing. Based on a preliminary investigation, Ercole says the claims for the class could total upwards of $15 million.
Under the Worker Adjustment and Retraining Notification Act, companies with more than 100 employees are typically required to give a 60-day notice of a pending mass layoff or closure.
Exceptions are made for a faltering company that is actively seeking capital or business that would prevent or postpone the layoffs and situations in which it is reasonable to believe that advance notice would harm the company, the act states. In all cases, however, the notice must be provided as soon as practicable.
"This is the most egregious violation of the WARN Act and state wage payment laws I have seen in my practice," says Ercole, who has handled more than a dozen plant closing/mass layoff cases in the past five years.
Arrow has faced numerous lawsuits in Tulsa County District Court and elsewhere, reports the Tulsa World, which allege the company has defaulted on close to half a million dollars in payments and bills.
The Tulsa lawyer for Arrow Chairwoman Carol Pielsticker told the Tulsa World that his client is uncertain about the company's future, and that she was "extremely saddened by what has happened and the terrible impact it has had on Arrow employees and Arrow itself."
Doug Pielsticker, CEO, has released a statement saying that the company is negotiating with its principal lender.
Some Arrow managers and executives are working without pay to get drivers home and freight delivered, according to the Oklahoma Trucking Association. Meanwhile, other trucking companies have reached out to Arrow drivers, offering them help home and in some cases employment opportunities.
Bob Peterson, the president of flatbed carrier Melton Truck Lines, told the Tulsa World that he might hire some of Arrow's drivers and office workers, but he's not interested in buying any part of the company. "Arrow's name is poison and customers are calling us to help them out of the jam they're in," he told the paper.
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