Falcon Transport Faces Second Lawsuit After Abrupt Closure
Youngstown's Falcon Transport, which ended operations and laid off about 600 employees without warning in April, is facing multiple lawsuits according to a federal district court filing Tuesday. Falcon was part of the supply chain for GM's shuttered Lordstown plant, which ended production in March.
Elk and Elk lawfirm's Managing Partner Jay Kelly said Falcon was required to notify the state 60 days before closure under the Worker Adjustment Retraining Notification Act.
"We're seeking those 60 days worth of wages for people," Kelly said. "And then the additional claims in there look at wages they've already earned and/or expense they've already paid that have not been paid back yet."
The complaint also addresses several employee health care issues. Kelly says part of the reason for the WARN Act is to help employees plan for health care coverage before their employment ends. The suit claims Falcon not only cut off health care on April 26 but also that there were existing problems with health care paymets which are now under a prompt pay request.
"They were taking health care money out of paychecks and it does not appear, at least based on information we have right now, that they were using it to buy health care," Kelly said. "So, we have some individuals who may in fact be bare for health care."
Another concern is that CounterPoint Capital Partners LLC, the Los Angeles-based private equity firm that purchased Falcon in 2017, might also attempt to shut down other divisions, Kelly said. CounterPoint's web site still exisits but has essentially been stripped of all information and it was not clear if phones were working.
"We know that they're closing down Falcon, but we want to make certain that any place where there's money that may be attributable to Falcon for these individuals so they can be made whole," Kelly said, and part of the intention of the additional filing is to get CounterPoint's remaining funds frozen by the courts, if necessary.
Elk and Elk filed Tuesday's complaint as a related case to another claim filed against Falcon last week. Kelly says no future court date has been set, but the same judge will hear both cases and determine the best way to proceed.
"Falcon was hiring people," Kelly said. "They had new employees that were onboarding the Monday before [the closure]. They had ads posted for other drivers on Friday. So, you know, this hits them out of the blue."
Representatives from Falcon and CounterPoint Capital could not be reached for comment.