MARTINSBURG, W.Va. — A $1.1 million settlement has been reached in a federal lawsuit filed on behalf of hundreds of workers affected by the abrupt closure of AB&C Group plants in the Eastern Panhandle and Orange County, Va., in March 2008.
"At long last, folks will receive all the pay that's due to them," the plaintiffs' attorney David Hammer said Friday.
An allocation hearing has not yet been scheduled, but Hammer said workers ultimately will not receive the maximum amount of damages that are provided for through the Wage and Payment Collection Act and other labor laws because their former employer went bankrupt, Hammer said.
The class action lawsuit against Reliant Equity Investors LLC, Tatum LLC, AB&C Group Inc., BlueSky Brand Inc., and five AB&C Group executives, was filed in March 2008 on behalf of more than 375 workers, by Hammer and attorney Garry Geffert.
In their complaints, the plaintiffs' attorneys claimed the company's abrupt closure violated multiple labor laws. In addition to the federal lawsuit, two additional civil actions were filed in Berkeley and Jefferson County circuit court alleging violations of state wage payment and collection laws.
One asserted causes of action for common law fraud and emotional distress related to the abrupt closure of AB&C's facilities, according to court records.
All three lawsuits also would be resolved if the settlement is approved by presiding U.S. District Judge John Preston Bailey, Hammer confirmed.
In a motion filed Friday in U.S. District Court in Martinsburg, Hammer and Geffert asked the court for preliminary approval of the settlement and to schedule a hearing to finalize how the money — $1,171,031.60 — will be allocated, according to court records.
AB&C Group was wholly owned by BlueSky Brand, a Delaware corporation that was established and managed by Reliant Equity Investors, according to court records. Tatum LLC assisted Reliant Equity with the purchase of AB&C Group, according to court records.
"We were able to recover wages and some additional damages, but not what we would have recovered if AB&C and BlueSky hadn't gone bankrupt," Hammer said.
The wage act provides that affected workers receive wages plus three times that amount as liquidated damages, while the Worker Adjustment and Retraining Notification Act provides for 60 days of pay, and the Fair Labor Standards Act provides for overtime plus an equal amount as liquidated damages, Hammer said.
Workers at AB&C Group plants in Ranson, W.Va., and at a former General Motors plant in Berkeley County, W.Va., and in Orange County, Va., were expecting paychecks March 14, 2008 but instead were told to clean out their desks because they would not be able to return to work. Some workers received checks while others did not, officials had said.
About 680 workers were laid off through the March 14 actions and previous layoffs.
Attorney Paul G. Taylor, who represented about 300 AB&C Group employees in separate civil action in Jefferson County, recalled Friday that there was doubt that the workers would receive any money at one point.
"AB&C declaring bankruptcy complicated things," Taylor said.
"I'm pleased that we were able to reach a settlement and get the workers of AB&C some relief."
Earlier this week, Berkeley County Development Authority Executive Director Stephen Christian recalled that AB&C Group's abrupt closure came only weeks after he started working for the county.
"It made for a chilling beginning to my career here," Christian told those gathered Monday for a formal announcement of plans by Macy's Inc. to build a distribution facility in Berkeley County.
"... This project is ... for all you people at AB&C who didn't know what hit you," Christian said of Macy's plan to hire more than 1,200 people and employ another 700 seasonal workers annually.