Klehr Harrison Settles Class Action for $7 Million

Klehr Harrison Settles Class Action for $7 Million

Charles A. Ercole, a partner with Klehr, Harrison, Harvey, Branzburg & Ellers in Philadelphia, Pennsylvania and Robert F. O’Brien, Esquire, a partner with O’Brien, Belland and Bushinsky in Northfield, New Jersey announced today that they have reached a $7 million settlement with Yellow Freight Corporation, the successor to USF Corporation, to resolve claims arising out of the closing of USF Red Star Inc.’s facilities on or about May 23, 2004.

Red Star Inc.’s terminals were located throughout the Northeastern United States including the following locations: ALBANY, ALLENTOWN, AUBURN, BALTIMORE, BEDFORD, BOSTON, BRIDGEPORT, BUFFALO, BURLINGTON, CUMBERLAND, ERIE, HARTFORD, HARRISBURG, LONG ISLAND, NEWARK, NEWBURGH, PHILADELPHIA, PITTSBURGH, PLATTSBURGH, PORTLAND, RICHMOND, ROANOKE, ROCHESTER, SYRACUSE, WINCHESTER and WILKESBARRE.

Mr. Ercole and Mr. O’Brien were lead counsel in a class action lawsuit brought on behalf of 1,900 employees who were laid off without notice and not given any severance.  The claim was brought under the Worker Adjustment and Retraining Notification Act (“WARN Act”).  The WARN Act requires that employees be given sixty (60) days notice prior to a plant closing or mass layoff if the employer has at least 100 employees and the layoff at a particular location involves at least 50 employees.  USF Corporation claimed that it was not required to give the full 60 day notice because of a “unforeseen business circumstance” which is a defense provided to employers by the WARN Act.  USF claimed that an unannounced one day strike conducted by the International Brotherhood of Teamsters at all Red Star Inc. facilities on May 21, 2004 caused irreparable damage and forced the shutdown. 

After eleven months of litigation and extensive negotiations, the parties reached the settlement requiring USF to pay $7,000,000.00 to the 1900 employees.  Judge Petrese Tucker of the District Court for the Eastern District of Pennsylvania must approve the settlement.