GILROY
– Claiming he and his fellow workers deserved 60 days notice
before being laid off Sept. 19, a former Indian Motorcycle employee
filed a class-action lawsuit against the company Friday on behalf
of its entire 380-person former workforce.
Russel Frost, of Hollister, a former quality-control inspector
at Indian, filed the lawsuit in Santa Clara County Superior Court.
He is seeking 60 days’ pay and benefits for each person Indian laid
off. The company closed its Gilroy headquarters on Sept. 19. Frost
is also seeking punitive damages
”
as the court may deem proper.
”
GILROY – Claiming he and his fellow workers deserved 60 days notice before being laid off Sept. 19, a former Indian Motorcycle employee filed a class-action lawsuit against the company Friday on behalf of its entire 380-person former workforce.
Russel Frost, of Hollister, a former quality-control inspector at Indian, filed the lawsuit in Santa Clara County Superior Court. He is seeking 60 days’ pay and benefits for each person Indian laid off. The company closed its Gilroy headquarters on Sept. 19. Frost is also seeking punitive damages “as the court may deem proper.”
“They gave (employees) not even 60 seconds notice,” Frost said Monday. “It was just like, bam! They closed the doors.
“To me, it’s not about the money. If I don’t get one penny out of all this, it doesn’t matter to me. What I want them to understand is that they hurt a lot of people.”
Bill Marder, a lawyer with the Hollister firm that helped Frost file the suit Friday in Santa Clara County court, said it’s up to a judge to certify the lawsuit’s class-action status – that is, whether it will represent all the laid-off employees or just Frost. If the suit is successful as a class-action matter, any money reaped from Indian would be distributed evenly among the laid-off employees, Marder said.
Indian Chairman Frank O’Connell said last week that Indian was exempt from state and federal laws that require 60-day advance notice of mass layoffs – in California, when more than 50 employees are let go at once – because the company didn’t have the money to keep operating at the time of the sudden shutdown.
“That’s what nearly all employers claim” in such circumstances, Marder said. The burden of proof, however, is on Indian, and Marder said he thinks this burden will prove “very difficult for them.”
First, according to state labor law, Indian would have to prove that 60 days before it folded, it was actively pursuing an investment that realistically would have saved it from the financial crisis that prompted the factory closure.
“If they had a realistic hope of saving the company, either by getting new financing or a new customer, it didn’t happen,” Marder said.
Second, Indian has to show that giving 60-day advance notice of layoffs would have ruined that hope for saving the business – perhaps because employees would have quit or because investors would have pulled out.
This requirement, in particular, Marder said “is going to be an uphill battle for (Indian).”
“The impression I have is that they didn’t really care about the employees,” Marder said. “They were going under, and they just figured, ‘Who cares? We’re never going to see these employees again.’ ”
O’Connell did not return phone calls, and The Dispatch could not reach any representative of Audax Group, a Boston-based investment firm that owns the majority of Indian Motorcycle’s stock.
Meanwhile, a few other former Indian workers are seeking severance pay from the company by appealing to the state Department of Industrial Relations.
Rudy Pena and his son Johnny – both of whom worked for Indian for five years until its closure – were filing paperwork Monday to claim severance pay through the Department of Industrial Relations’ Division of Labor Standards Enforcement. While employers are not required to pay severance, Indian’s employee handbook had said the company was willing to give it to laid-off workers at a rate of one week’s pay for every year spent with the company. Now, Rudy and Johnny Pena figure Indian owes them five weeks’ pay each.
The catch is that Indian issued a new employee handbook a week before the shutdown and told employees to sign to say they agreed to follow the new policies therein. The new handbook eliminated mention of severance pay, according to at least four employees.
But not all of Indian’s departments received the new handbook, including those where Rudy and Johnny Pena worked.
“We never saw it, so we never signed anything,” Johnny Pena said Monday.
“If they changed (the severance pay policy) before they closed, they did that real quick, real sneaky,” Rudy said.
The last the Penas heard, they said, the severance policy was still in place. That’s the basis of their claims.
“Each individual at Indian who thinks they should get severance pay should file one of these,” Rudy said.
Both Penas thought Frost’s class-action lawsuit was a good idea, but Rudy expressed concern on the outside chance Indian reopens operations in Gilroy.
“It’s good if they’re not going to open the plant back up,” Rudy said. But if Indian reopens here, he added, “they (could) decide, ‘OK, you guys filed a lawsuit against us, so we’re going to hire 380 new employees.’ ”
Indian Motorcycle employees were not unionized, and the company had a record of firing workers who started down the union path. In 2001, the company settled out-of-court with eight employees it had fired: four for accepting union literature and four for engaging in a one-day strike to protest a supervisor’s alleged mistreatment, according to the International Association of Machinists and Aerospace Workers. These eight were offered rehire and divided $90,000 in back pay, the union reported.
