Foster & Gallagher Layoffs Could Bring Labor Charges

Nearly two weeks after Foster & Gallagher closed and laid off thousands of employees, the direct marketer may find itself answering charges of unfair labor practices.

Rep. Ray LaHood, R-IL, has called on the U.S. Department of Labor's Pension Benefits Administration to investigate whether Foster & Gallagher violated the Worker Adjustment Retraining Notification Act.

The WARN Act requires businesses with more than 100 employees to provide 60 days notice of a major layoff or plant closing to local and state government officials. Workers and local governments may bring individual or class-action suits under WARN. Penalties for noncompliance could result in 60 days back pay for employees and a $500 per-day penalty to the local government.

“I am also distressed by the fact that it appears the official 'Notice of Plant Closing' was given to employees on the same day the facility closed — June 29,” LaHood said.

Doug Morris, spokesman for Foster & Gallagher, said the company fulfilled its legal obligation to its employees and declined further comment on the matter.

The 50-year-old company let go nearly all its work force last month and filed for bankruptcy protection in U.S. Bankruptcy Court for the District of Delaware. The privately held Foster & Gallagher, Peoria, IL, listed more than $100 million in assets and more than $100 million in debt, according to the court petition. The company will liquidate its Spring Hill Group, Michigan Bulb Group, Gurney's Group and all of their subsidiaries. It has arranged for short-term financing to assist in closing and liquidation and has put up for sale the Gift Group, which includes Walter Drake and The Home Marketplace catalogs.

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