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Archway employee files suit / Legal action charges WARN Act violation

October 16, 2008
T-G Staff Writer

A former Archway employee filed a class action lawsuit against the company Wednesday.

Jeff Austen of Perrysville, an Archway employee for four years, filed the lawsuit with New York-based firm Outten & Golden LLP. The action maintained the company acted in violation of the Worker Adjustment and Retraining Notification Act.

The WARN Act requires companies give employees 60 days notice before a plant closing and holds companies liable for up to 60 days wages and benefits for all affected employees.

"It was necessary that we got this in," Austen said. "I felt this was the best bet for all of us to go this route."

Austen said he wanted to have a filing entered before too many creditors filed lawsuits against the company. The lawsuit will cover all Archway employees, but anyone can opt out of representation.

Under the WARN Act, companies are exempt from the 60-day advance notice requirement for three reasons: a faltering company, unforeseeable business circumstances and natural disasters.

Archway announced the closure of the Ashland bakery Oct. 3 and filed Chapter 11 bankruptcy Oct. 6. The company cited "unforseeable business circumstances" as its reason for closing and in a press release issued Oct. 6 cited "significant increases in raw material costs, such as flour, butter, sugar and dairy, and the record high fuel costs across the country" as circumstances.

Attorney René Roupinian of Outten and Golden said rising fuel costs would not constitute an unforeseeable business circumstance.

The lawsuit holds Archway Cookies LLC; Mother's Cake & Cookie Co., Archway's parent company;, Catterton Partners Corporations, owner, junior lender and equity sponsor of the company; and Insight Holding, the operating management firm; as responsible.

Company spokesperson Meaghan Repko could not be reached for comment Wednesday night.

Austen said he chose Outten and Golden because they are a nationally-recognized firm and are highly-ranked in their field.

"It's pretty reputable," Austen said.

Outten and Golden has handled several WARN cases, including the recent suit against Bill Heard Enterprises Inc. in which employees were not given advance written notice before the company filed bankruptcy.

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