Trucking company Continental Express purchased Celadon Trucking Services Inc. This purchase included all assets and a specified list of employees that would be retained. Per the Worker Adjustment and Retraining Notification (WARN) Act, Continental should have notified employees that would not be retained but failed to do so. The new owner Celadon was sued by the affected employees and lost the case upon appeal due to the fact that the employees had been retained for 14 days after the sale went into effect and that the business was bought “as a going concern” to be merged into their business.
Key Takeaways:
- On Dec. 4, 2008, Celadon Trucking Services Inc. signed an asset purchase agreement (APA) with Continental to buy Continental’s trucks, trailers and other assets.
- On Jan. 16, 2009, the employees filed a class-action complaint against Celadon seeking damages under the WARN Act.
- On appeal, Celadon argued that it was not liable under the WARN Act, that the district court erred on the class-certification issue and relied on inadmissible evidence in awarding damages.
“The court rejected Celadon’s claims concerning errors in class certification and upheld the district court’s ruling on damages, reasoning that Celadon had failed to make objections and preserve records that might have been helpful to its defense.”
