ST. LOUIS — Celadon Trucking Services Inc. has appealed the decision of a three-judge panel requiring it to pay over $2.1 million in damages to 446 former employees of Continental Express Inc. to the full Eighth Circuit Court of Appeals.
“The panel’s decision conflicts with U.S. Supreme Court precedent as well as 8th Circuit decisions,” Celadon’s appeal read. “In addition, the panel’s decision presents important questions that should be weighed by the full Circuit in setting precedent.”
After six years and a 16-month appeal process, the three-judge panel of the Eighth Circuit ruled 3-0 July 5 that Celadon, of Indianapolis, must pay the damages plus “post-judgment interest” to 446 former employees of Continental Express. The former employees were terminated when Celadon bought the Little Rock, Arkansas-based trucking company on December 4, 2008, and fired the employees between December 5 and December 17. Celadon offered employment to 201 of Continental’s 658 workers, according to the court filing.
Celadon had until July 19 to obey the order or file a notice of appeal to the entire Eighth Circuit Court of Appeals, but the company asked for and was granted a two-week extension. The company filed the appeal on the new deadline of August 2.
“Celadon vehemently disagrees with the decision [and] is currently exploring its options,” Director of Marketing and Communications Joe Weigel wrote in an e-mail response to the July 5 decision, “and it will have no further comment while the case remains pending.” Abraham Bogoslavsky, a Little Rock attorney who represents the former Continental employees, said he expected Celadon to appeal the decision to the full Appeals Court.
“I would hope [Celadon would not appeal further] based on the way the appeal came down,” Bogoslavsky said. “It was a 3-0 verdict. At that point we would be able to begin a distribution process [of cash to the plaintiffs]. Based on past dealings, I’m afraid there’s a possibility that they will petition for a rehearing before the entire court of appeal.”
The class-action lawsuit was filed January 16, 2009, in Little Rock on behalf of terminated employees, drivers and non-drivers, claiming that Celadon, headquartered in Indianapolis, had violated the Worker Adjustment and Retraining Notification (WARN) Act. The federal WARN Act, passed in 1988, requires that employers with more than 100 employees give workers 60 days notice of closings and impending layoffs, to give the employees time to find other work, adjust family situations and, in some cases, arrange for retraining. Susan Webber Wright, U.S. District Judge for the Eastern District of Arkansas, on March 9, 2015, granted partial summary judgement “in favor of the employees as to WARN Act liability, and awarded the employees damages due under the WARN Act,” court documents stated.
Celadon appealed Wright’s ruling March 30 of last year, arguing that it was not liable under the WARN Act and that Wright committed multiple errors in certifying the plaintiff class, relying on inadmissible evidence in awarding damages and rejecting Celadon’s claim that it acted in “good faith” under the WARN Act.
Celadon expected Continental to fulfill all legal obligations to the employees not hired by Celadon, Weigel wrote in his reply to The Trucker.
“The parties agreed that although Celadon would hire some employees of Continental as of the date of the asset purchase,” Weigel wrote, “the remaining Continental employees would continue to be employed and paid by Continental as it wound down its business. And because employees remained with Continental, the parties expressly agreed that any obligations of an employer, including any requirement to timely notify employees of a layoff under the Worker Adjustment and Retraining Notification Act, known as the WARN Act, and pay any employer-related responsibilities under the WARN Act to its affected employees, remained with Continental.”
“The WARN act could not be clearer,” he said. “Anybody that’s still employed by the day of the sale, they are the responsibility of the [buyer. Celadon] has certainly got a claim against Continental. But these people, their claim is against [Celadon].”
Damages due the former Continental employees include $1,674,108 in driver damages, $476,433 in non-driver damages, and post-judgment interest from March 9, 2015 “until paid at the rate of .22 percent per annum as provided by law,” Wright wrote in the conclusion to the original lawsuit.
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