News / Sacked staff file WARN Act class action against bankrupt US Logistics Solutions

© Panida Wijitpanya |

As anticipated, bankrupt US Logistics Solutions is facing a class action lawsuit from former employees after it unexpectedly shuttered its doors last week.

The company, owned by private equity firm Ten Oaks Group, filed for liquidation, or Chapter 7 bankruptcy proceedings, last week and fired all staff without warning.

However, under the Worker Adjustment and Retraining Notification Act (WARN Act), employers of more than 100 people must give 60 days’ notice in the event of mass layoffs. The company failed to do so, which has left it open to a class action filed this week by staff claiming wages and benefits for those 60 days.

The filing, led by former worker Robert Munro, noted: “Defendant failed to pay the Plaintiff and the Other Similarly Situated Former Employees their respective wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation for sixty (60) calendar days following their respective terminations and failed to make the 401(k) contributions and provide health insurance coverage and other employee benefits under ERISA in respect to them for 60 calendar days from and after the dates of their respective terminations.”

While media and the lawsuit have pointed to some 2,000 staff, Ten Oaks told The Loadstar that in fact, US Logistics Solutions had 870 direct employees, 62 independent contract drivers and 322 labourers contracted through third-party agencies.

US Logistics Solution has estimated liabilities of between $100m and $500m, and estimated assets of between $50m and $100m.

Ten Oaks told The Loadstar that its third-party lender had “refused to move forward with financial support for US Logistics Solutions, leaving no choice but a Chapter 7 bankruptcy plan”. It also said the company was “in turmoil” prior to 2021, when it was part of Forward Air – which is among hundreds of names listed as creditors.

Ryder Truck Rental, meanwhile, is attempting to get its vehicles back after the bankruptcy proceedings led to an automatic stay, whereby creditors cannot get debts paid until the court proceedings are completed. But Ryder, which is owed some $615,000, argued that it has trucks spread out across the southern and eastern US in US Logistics Solutions’ truck yards, which may not now be monitored or secured.

“The leased vehicles are worth millions of dollars. Accordingly, Ryder’s property, the leased vehicles, is not adequately protected. Emergency relief is necessary so that Ryder can retrieve and secure the leased vehicles,” it said.