Drivers and other employees of bankrupt less-than-truckload carrier New England Motor Freight (NEMF) have accepted a negotiated package that includes higher severance pay, according to an attorney representing the workers.
Charles A. Ercole, a Philadelphia-based attorney at Klehr Harrison Harvey Branzburg, told Fleet Owner in an exclusive interview and follow-up e-mail the company’s decision to settle and avoid a drawn-out legal process was right for both sides.
Elizabeth, NJ-based NEMF, which employed more than 1,700 drivers, ceased operations and filed for Chapter 11 bankruptcy on Feb. 11. The privately held firm was founded in 1977 and served the northeastern United States and parts of Canada.
Its parent company is the Shevell Group, which ranks No. 80 on the 2019 Fleet Owner For-Hire 500 listing. The company’s vice president is Nancy Shevell, wife of Paul McCartney.
Workers filed a class-action lawsuit against NEMF, claiming the company's acted in violation of the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers with 100 or more employees to give 60 calendar-days-notice of plant closings and mass layoffs.
“On Friday (March 1), federal bankruptcy Judge John K. Sherwood approved a severance package for 2,500 employees of New England Motor Freight who were laid off without notice when the company filed bankruptcy in mid-February,” said Ercole.
“Because of our WARN Act lawsuit, the severance package was increased at the last minute by 20 percent ($2.7 million) so that each employee will basically receive an additional week’s pay – meaning that every full-time employee (union and non-union) will get 8 weeks of fully paid health care benefits and at least 14.5 day’s pay (and up to five weeks pay if employees had unused vacation and paid time off greater than two weeks).”
Ercole said an earlier package negotiated by the union was not satisfactory. As a result, the law firm was retained by more than 500 NEMF workers.
The negotiations took place over several days and were not very contentious, said Ercole, because both sides wanted it settled quickly. Ercole said the agreement is for the most part a win for the workers.
“Feedback is very positive,” he concluded. “One of the reasons we did it is because these cases can go on for years. Now people will get money immediately, when they need it the most, right now.
