A former Central Freight Lines employee claims the Waco,Texas-based less-than-truckload carrier violated federal law by failing to give 60 days’ notice of its planned shutdown to nearly 2,100 employees and truck drivers, who found themselves without jobs two weeks before Christmas.
Aaron Cox worked at the Waco facility until his employment was terminated on Dec. 13, the same day CFL officially told its employees and drivers that the LTL carrier was ceasing operations.
Cox alleges in his proposed class-action complaint that the company violated the federal Worker Adjustment and Retraining Notification (WARN) Act and did not provide at least 60 days’ written notice of a pending closure.
In the suit, filed in the U.S. District Court for the Western District of Texas, Cox claims Central Freight failed to pay him and other employees their “wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation pay for 60 days following their respective terminations.”
The company also “failed to make 401(k) contributions and provide them with health insurance coverage and other employee benefits,” court documents allege.
As of publication, CFL President Bruce Kalem did not respond to FreightWaves’ phone calls or messages seeking comment.
FreightWaves broke the news on Dec. 11 that the LTL carrier was shutting down after 96 years. In an exclusive interview, Kalem confirmed the news but said the plan was to tell the majority of Central Freight’s 2,100 employees and drivers on Monday, Dec. 13, but that the news leaked out following a meeting with its terminal managers and members of CFL’s executive team.
Industry analysts and 3PLs say poor acquisitions and a lack of understanding of the LTL business model were key to CFL’s demise. Rival carriers were surprised CFL held on as long as it did as rumors have been swirling for years that the company was on the verge of going out of business.
CFL had 65 terminals at the time of its closure.
The day CFL officially announced its closure, Dec. 13, the company did file a WARN Act notice that 70 dockworkers, terminal employees and truck drivers at its facility in Charlotte, North Carolina, were losing their jobs.
In the letter obtained by FreightWaves, the company said it provided the “notice as soon as reasonably possible under the circumstances.”
“CFL has been actively pursuing capital, new business and restructuring and refinancing alternatives to allow it to avoid or postpone any potential facility closures: however, to date, such efforts have been unsuccessful.”
Alerting employees prior to ceasing operations “would have jeopardized its efforts to obtain the financing and new business it was actively seeking in an effort to avoid or postpone this facility closure,” according to the WARN letter.
This is a developing story.
Watch impact of CFL’s closing on FW NOW
See related coverage:
Autopsy report: How Central Freight fell into a 5-year ‘death spiral’
Exclusive: Central Freight Lines to shut down after 96 years
Reaction to news of Central Freight Lines shutting down
Central Freight confirms Estes Express offering to snap up drivers, buy equipment