An Illinois congressman has called for an investigation into the labor practices of Foster & Gallagher after the company abruptly ceased operations two weeks ago and laid off thousands of employees.
Congressman Ray LaHood (R-Peoria) said he has urged the U.S. Department of Labor to investigate the shutdown after 400 Peoria-based employees were given notice June 29 that the plant that employed them would shut down that day.
“For workers to show up to work on Friday and then be suddenly terminated with no health benefits, severance package, or advance notice is an absolute travesty,” LaHood said last week. “I am very concerned that these workers not only now have to find a new job, but also that they and their families are now without health insurance.”
LaHood has requested that the Department of Labor’s Pension Welfare Benefits Administration review the closure notice and respond with details of options for intervention on behalf of the over terminated employees. The PWBA is reviewing the request.
LaHood had also expressed concern that the shutdown may have violated the Worker Adjustment and Retraining Notification (WARN) Act. The act requires businesses of 100 or more employees to provide 60 days advance notice of a major layoff or plant closing to local and state government officials. Workers and local governments may bring individual or class action suits under WARN. Penalties for noncompliance with the act are employee wages equal to 60 days back pay and the value of fringe benefits, plus $500 per day to the local government.
“I have asked the Department of Labor to investigate whether or not these employees will be eligible for COBRA health benefits and to determine what, if anything, can be done,” LaHood said.
The company and several executives are also fighting a lawsuit over an alleged 91% drop in the value of the employee stock option plan (ESOP). That lawsuit alleges that the defendants drove the ESOP deeply into debt by purchasing stock valued at more than $120 million from shareholders including Thomas Foster.
Network
