An Ohio trucking company that recently shut their doors for good says they didn’t tell their workers or state officials about the mass layoff because doing so would have hurt their chances of obtaining further funding.
On April 27, Youngstown, Ohio-based trucking company Falcon Transport Co. notified its hundreds of truck drivers via text message to let them know that the company was closing down and that they must stop working immediately. Several of the company’s drivers were reportedly stranded on the road without a way to get home when they received the text message, while others reported that their fuel cards stopped working and that they were not paid on time.
On Tuesday, May 7, eleven days after the closure, Falcon Transport finally filed a late WARN notice with the state of Ohio. The WARN Act is a federal requirement that companies who employ more than 100 people provide their workers with 60 days notice prior to a mass layoff.
In the WARN notice, Falcon Transport told the state of Ohio that it failed to notify workers that they were losing their jobs in advance because it would have hurt their chances of getting paid before they shut down.
From the WARN notice:
“We have not been able to give sixty (60) days of notice because of … the failure of Falcon’s attempts to raise additional capital, which attempts would have been impaired by the sending of notices, including, without limitation, unsuccessful attempts to negotiate for additional capital, unsuccessful attempts to negotiate additional funding and other accommodations from lenders, unsuccessful attempts to sell excess equipment, unsuccessful attempts to negotiate release of escrow funds from prior owners, unsuccessful attempts to negotiate a settlement payment from its largest customer, and other capital raising attempts. Sending notices earlier would have jeopardized our effort to obtain further funding.”
In the WARN notice, the company also blamed the sudden closure on “unforeseen business circumstances,” which they say includes the closure of a General Motors plant in Lordstown, “new work awarded by customers not materializing”, and a malware attack on the company’s accounts receivable system.
Falcon Transport and its owner CounterPoint Capital Partners are facing a two lawsuits brought on by sudden shutdown and the reported violation of the WARN Act.
Falcon Transport is currently working to liquidate their assets.