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Yellow Roadway Corp., the successor to USF Corp., has agreed to pay $7 million to settle a class action suit under the WARN Act brought on behalf of 1,900 former USF Red Star employees who claimed they were laid off in May 2004 without notice and not given any severance. The proposed settlement must be approved by U.S. District Judge Petrese B. Tucker, who announced on Tuesday that she will hold a “fairness hearing” on Sept. 22 to hear any objections to the settlement. Under the Worker Adjustment and Retraining Notification Act, employers are required to give workers 60 days’ notice prior to a plant closing or mass layoff if the employer has at least 100 employees and the layoff at a particular location involves at least 50 employees. According to court papers, USF Red Star laid off more than one-third of its work force on May 23, 2004, closing facilities in Pennsylvania, New Jersey, New York, Rhode Island, Massachusetts and Maryland. Soon after, USF Corp. was hit with five WARN suits. All five cases were later transferred to the Eastern District of Pennsylvania and assigned to Tucker. Tucker appointed two lawyers to serve as co-lead counsel for the plaintiffs — Charles A. Ercole of Klehr Harrison Harvey Branzburg & Ellers in Philadelphia, and Robert F. O’Brien of O’Brien Belland & Bushinsky in Northfield, N.J. In February 2005, Yellow Roadway acquired USF in a $1.5 billion deal that effectively made Yellow — already a Fortune 500 company –one-third larger, giving it annual revenues of more than $9 billion, more than 70,000 workers and about 1,000 locations, according to the company’s Web site. Prior to Yellow’s takeover, USF had argued in court papers that it was not liable under WARN and was not required to give the full 60-day notice because of an “unforeseen business circumstance” — a defense provided to employers by the WARN Act. In court papers, USF’s lawyers argued that an unannounced one-day strike conducted by the International Brotherhood of Teamsters at all Red Star facilities on May 21, 2004, caused irreparable damage and forced the shutdown. According to the suit, the shutdowns closed five facilities in Pennsylvania – Allentown, Harrisburg, Philadelphia, Pittsburgh and Wilkes-Barre –as well as six New York sites, and one each in Maryland, Massachusetts, New Jersey and Rhode Island. Under the terms of the proposed settlement, payments to workers will be based on a formula calculated on the basis of their earnings during the calendar years 2003 and 2004 while working for USF Red Star. In a notice mailed to the class, workers were told that the amounts will vary, but will likely be in the range of $4,000 per class member before costs and attorney fees are subtracted. The notice also says the plaintiffs’ lawyers will be filing a petition for a fee award of up to one-third of the settlement fund, or about $2.3 million. In addition to Ercole and O’Brien, the plaintiffs’ team included Klehr Harrison attorneys Mary B. Halfpenny, Julie M. Holland, Nicole M. Nigrelli and Joseph P. Bradica, and O’Brien Belland attorney Brett I. Last.

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