NEW YORK, NY / ACCESSWIRE / March 7, 2017 / Levi & Korsinsky reports that Puglia Engineering has threatened to terminate its agreement to operate Pier 70 at the Port of San Francisco, claiming that its agreement with the Port of San Francisco and BAE Systems failed to disclose nearly $9 million worth of needed repairs at the site.
If Puglia walks away, as many as 250 workers at the pier can lose their jobs instantly. The original deal was inked on January 2 for only $1, with Puglia agreeing to take on $38 million in pension liability from BAE Systems. These pensions will, of course, go unfunded if Puglia pulls out.
In short, Puglia claims that BAE Systems deliberately misled the company about the extent of work needed throughout the port. Puglia's CFO, Scott Hendrickson, has said that "the conduct of BAE has been egregious," and that "BAE has deceived Puglia in every way."
BAE Systems refutes these allegations, claiming that their company acted "fairly and in good faith throughout the sales process, and after completing its own due diligence, Puglia purchased the business on an as-is basis with a complete understanding of the yard's condition."
On February 16, 2017, Puglia disclosed to its employees and the State of California's Employment Development Department that certain positions within the company would be lost as Puglia walks away from the deal. Via e-mail, the company stated that, effective February 26, 2017, just nine days after the e-mail was sent, Puglia would cease all payroll, cash management, IT, and purchasing services. Any pension payments would also be up to BAE Systems to continue. The company claims that due to the extreme circumstances of the situation, mentioned above, "advance notice to employees and the union is not possible, though the company is giving as much notice as practicable."
According to the law firm of Levi & Korsinsky LLP, an employee advocacy firm, mass layoffs may result in employment law violations. For example, the WARN Act is a United States labor law that protects employees of businesses with 100 or more employees. If an employer conducts a plant closing or mass layoff affecting 50 or more employees who constitute at least 33% of the employees at that site, or more than 500 employees, the employer must provide 60 days' advance notification. Employees are therefore entitled to full pay and benefits during such period prior to layoff and may also be entitled to various other protections under the law.
Notably, several states have enacted their own "mini-WARN Acts" with generally more stringent requirements. In California, the Cal-WARN Act applies to any private business with 75 or more full- or part-time employees who have been employed at the business for at least 6 of the 12 months preceding the date notice was required. Under the Cal-WARN Act, 60 days' advance notice is required to be given by the employer when closing a plant, laying off a substantial number of employees, or relocating their business.
The advance notice, provided by the WARN act and Mini-WARN acts, is intended to give employees and their families transition time to adjust to the prospective loss of employment, to seek and to obtain other employment, and, if necessary, to enter skill training or retraining programs that will allow these workers to successfully compete in the job market. Oftentimes, employees don't receive the benefits they are due or are otherwise harmed during the layoff process and may have recourse under the law.
Levi & Korsinsky believes that Puglia Engineering might have violated the WARN Act, and/or the Cal-WARN Act, and believe affected individuals may be entitled to back wages and benefits from the company.
For more information about the WARN Act and other employee rights, contact:
Levi & Korsinsky LLP
SOURCE: Levi & Korsinsky LLP