The sudden Labor Day closing of LTL giant Consolidated Freightways has some people talking about lawsuits for violation of a law that requires advance notice to workers of mass layoffs or closings.

Vancouver, Wash.-based CF closed its doors Monday and announced it would file for Chapter 11 bankruptcy, putting about 15,500 employees out of work nationwide.
At issue is the Worker Adjustment and Retraining Notification Act, known as WARN, which requires 60 days’ notice of large layoffs or closings. There are exceptions, such as natural disasters and unforeseen business circumstances.
The Teamsters National Freight-Industry Negotiating Committee has retained attorney Fred Perillo as bankruptcy counsel. Perillo will help the union determine what litigation needs to be filed against CF, its parent company, or affiliated companies.
In addition to a possible violation of the WARN Act, Teamsters officials will look into whether the 1996 spin-off of the union CF from the non-union CNF (parent of Con-Way) were planned to shift business to the nonunion company. Bret Caldwell, Teamsters spokesman, told the Detroit Free Press, “We’re going to be looking at all aspects of relationships of the past several years to determine what type of legal action we’ll be taking to protect our members.”
In addition, the attorney general of Wisconsin has filed a lien against CF for allegedly violating the state’s plant closing law and failing to pay wages due to affected employees.
Kevin Cicak, president of Teamsters Local 430 in York, Pa., told the local paper that it’s clear company officials knew of financial problems. About two months ago, he said, the company put into motion efforts to seek a 12.5-percent wage reduction from employees – an action the company backed out of three weeks before the closing, saying it would concentrate on talks with lenders. Those talks were not fruitful.
This is not the first time the Teamsters union has gone after a company for closing up without notification. About two years ago, the Teamsters won a $18.9 million settlement with Preston Trucking Co. Preston, a former subsidiary of Yellow Freight, closed suddenly in July 1999, leaving more than 4,750 Teamsters without jobs.