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Quaker workers win $1 million in suit

The Herald News
Published: July 09, 2008

The New York law firm representing 930 displaced Quaker Fabric workers said it has reached a tentative settlement of approximately $1 million in its class-action lawsuit alleging the company violated the WARN Act.

The suit was a response to the 62-year-old Quaker manufacturing company shutting its doors a year ago this week without providing 60 days notice to workers, as required under the Worker Adjustment and Retraining Act.

“We’re pleased with the outcome … The money comes at a welcome time,” attorney René S. Roupinian of Raisner Roupinian LLP said of the preliminary agreement reached in U.S. Bankruptcy Court, Delaware.

While the amount sought was considerably more – approximately $7 million based upon 60 days of wages and benefits to workers – Roupinian said the expected payout reflects the “limited assets” in the Quaker estate.

She indicated assets are in the $2.5 million range.

“The parties in bankruptcy thought enough of the claim to ascribe it $1 million of the dwindling remaining assets of what was once Quaker Fabric,” she said.

Attorneys fees and expenses will lower the approximately $1,000 per person the award would provide, said Roupinian. Generally, courts approve attorneys fees totaling one-third of a given settlement, she said.

About 700 former workers signed onto the suit, filed on behalf of the final workforce, which at one time numbered 3,000, when it was the city’s largest employer.

Whole families worked there, a great majority Portuguese immigrants with limited English language skills, many of whom worked there for decades.

A preliminary hearing scheduled July 11 before U.S. Bankruptcy Court Judge Kevin Gross is scheduled to finalize the settlement.

The law firm plans to inform its worker clients shortly after that, Roupinian said. The preliminary settlement gives the Quaker plaintiffs the first $100,000 for administrative expenses and $200,000 of available cash as priority creditors. They also receive one-third of the remaining funds, about $700,000, Roupinian said. It’s her understanding the other two-thirds of Quaker’s estate would go mostly to Quaker vendors.

While the court award might give these displaced Quaker workers a token of appreciation to celebrate on this Independence Day, one congressional leader muted his praise.

Sen. John F. Kerry, D-Massachusetts, who last year co-sponsored the FOREWARN Act to expand worker protections, criticized the amount of time it’s taken since Quaker closed and the class-action suit was filed nine months ago, to finally reach an agreement.

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FOREWARN Act primary sponsors – which included Sens. Barack Obama and Hillary Clinton – cited statistics that 24 percent of company layoffs fall under WARN Act guidelines, but employers in only one-third of those cases fulfill requirements.