Case could test N.J.’s layoff-warning law

After 21 years of driving a truck for Jevic Transportation Inc., the end for Harry Whitworth was swift.

The Delanco company abruptly shut down May 19 and laid off Whitworth, 58, along with more than 1,000 other workers, ending their health insurance with only a few hours' notice. His thoughts went to his wife, Marsha, who would learn that afternoon that the cancer in her lymph nodes had grown. Her doctor held her as she sobbed, her chest heavy with pain.

Until recently, the Whitworths could have done little. The federal law requiring companies with at least 100 employees to notify workers 60 days before layoffs or closings has no enforcement or punishment power.

Employees must sue to recover the value of their benefits and back pay, but the law is so easy to sidestep, the legal process so lengthy, that many employees never recoup their pay, or even try. Only about one-third of companies comply with the notification law, according to a government estimate.

But worker advocates say the Jevic shutdown could mark a turning point in New Jersey, which passed a stronger version of the federal law in December that eliminates exemptions from the advance-notice requirement and raises the amount of money employees can receive in a lawsuit. Like the federal law, it can only be enforced when employees successfully sue.

A lawsuit seeking class-action certification, filed by former employees against Jevic last week in Burlington County Superior Court, will be among the first major tests of the New Jersey legislation.

The plaintiffs' attorney, Robert F. O'Brien, said about 100 employees including Whitworth - only about 10 percent of the old workforce - had retained him as counsel to be part of the class. Jevic's parent company, the private equity firm Sun Capital Partners in Florida, is also named as a defendant in the suit.

Jevic, which had earned the respect of the community and employees, attributed the shutdown to rising fuel costs and a downward turn in the economy. A spokesman did not return a call for comment last week but had previously declined to discuss pending litigation.

The reasoning behind the new state law is that the federal law, known as the WARN Act, "has too many loopholes in it," said David Socolow, commissioner of the New Jersey Department of Labor and Workforce Development.

Even after Gov. Corzine upset many advocates by vetoing the original bill - which called for an expansion of notice to 90 days, knocked down to 60 in the eventual law - New Jersey now has one of the strongest laws in the nation.

At Jevic, company officials sent a layoff notification letter dated May 16 to Delanco Mayor Fern Ouellette and New Jersey's commissioner of labor that said it had not given 60 days' notice because it was seeking additional financing to right itself.

That is a permitted exemption under the federal WARN Act. New Jersey's law outlines exceptions to 60-day notice only for disasters such as war, fire and floods.

Phil Moran, a Philadelphia lawyer who represents employers in federal WARN cases, said Jevic would likely face an "uphill battle" in arguing that it did not have to provide the notice.

Still, O'Brien told 200 former Jevic employees who had gathered at a county workshop last week, "It's going to be a long slog."

Whitworth now sits at home while his wife goes to her part-time job, which brings in only $400 a month. He is a tall, sturdy man who rarely worries too deeply. But he worries about his wife's coronary disease, her lymphoma, her emphysema and the two dozen prescription drugs she relies on to keep her ailments in check. Her Medicare does not cover the drugs.

Whitworth, who earned about $55,000 annually driving a truck around South Jersey, worries about how he will pay the mortgage on his Riverside home. How he'll make his car payments.

Sitting with his wife in their living room, he takes out the gold rings the company gave him, engraved with "Jevic" and the image of a truck in honor of his first 10 years of service, and then 20. He had been so proud.

In the morning, when his wife is still in bed, the loss of their old life comes back to her like this, she says through tears: "Oh my God, why isn't he in the shower? Why isn't he going to work?"

State officials are trying to help.

"The real human problem is we have workers whose lives have been devastated," said Socolow, whose office has fielded hundreds of calls from workers. "Many of them . . . have health conditions with problems in accessing health care. But even if they don't, there's no money coming in, and having to conduct a job search overnight is just never easy."

The WARN Act, passed in 1988, grew out of the devastating losses of manufacturing jobs in industrial states, including Pennsylvania. Weaknesses were noted as early as 1993 by the U.S. Government Accountability Office, but a strong economy that decade kept the issue at bay.

Several reform bills are under way in Congress. Last week, the Senate Health, Education, Labor and Pensions Committee hosted a hearing on proposed legislation that would expand the notice period, cover more employers, give the Department of Labor the ability to file suit on workers' behalf, and increase the amount of pay workers can receive when companies do not comply.

"Over the past two decades, we have seen evidence that WARN does not cover enough layoffs and that, due to enforcement only by the courts, employers have too often failed to provide notice," Sen. Sherrod Brown (D., Ohio) said at the hearing he chaired.

Two other reform bills passed the U.S. House last year and await Senate action. New York and Iowa are considering passing laws that would close some loopholes, following states such as California and Illinois.

Reform efforts generally focus on what experts agree are the federal law's main weaknesses: the thresholds that trigger WARN cover too few companies; the Department of Labor can't enforce the rules; and the law calls for too little advance notice.

The idea behind the law, which also required companies to notify government officials, was to give employees enough time to move into a new job with the help of state labor departments' "rapid response teams."

The trigger for WARN notification includes: a plant closing that will result in at least 50 employees losing their jobs in 30 days, and a mass layoff that does not stem from a plant closing but would lead to job losses of at least 500 employees in 30 days. The threshold for layoffs is lowered to 50 employees if they comprise a third of the workforce.

But companies can legally skirt the 60-day requirement. Companies that miss the deadline can voluntarily give workers pay for each day missed. They can give employees a small severance package in exchange for employees signing agreements that they will not file claims.

And employers can simply lay off workers over time, staying under legal thresholds. Tropicana Casino and Resort in Atlantic City laid off a quarter of its work force, or 1,000 people, with hardly any notice under a new private equity owner all through 2007. The company never had to file a WARN notice.

In the first four months of 2008, 7,207 employees in New Jersey received WARN notices. In Pennsylvania, where previous efforts to adapt a state version of the law failed, 4,440 WARN notices were issued for the same period.

State Sen. Diane Allen (R, Burlington), has said the New Jersey law was "watered down" and questions the legality of Jevic's lack of notice.

Lawyer Jack Raisner filed a separate suit on behalf of Jevic workers 11/2 weeks ago in Delaware's federal bankruptcy court, where Jevic recently filed for Chapter 11 bankruptcy. The suit, contending that Jevic violated federal and state laws, seeks class-action certification, in which sub-classes would be created for employees in New Jersey, California and other states.

The New Jersey law provides for workers to receive one week's pay for every year worked if the company misses the deadline by even a day. Under the federal law, workers may receive a day's wages for every day the company's notice came past the 60-day mark.

Driving a truck is all that Albert Crowley, 50, a burly man with tattoos covering his arms, has done since he was 18. He and two other men sit in the information session, where the jobless and the scared have gathered to hear county and state officials tell them what to do in Life After Jevic.

"The whole time you were there, you gave and you gave and you gave," said Crowley, a 10-year trucker at Jevic. "And you feel like you were just thrown away like something at the bottom of the barrel."