NEWS

Consolidated Electric parent sued by ex-employees seeking compensation after layoffs

A.J. Bauer

Former employees of Consolidated Electric, the Norwood-based electrical contractor that abruptly closed last October, are suing two affiliated firms for allegedly violating a federal labor law.

In a lawsuit filed Dec. 7 in U.S. District Court in Boston, two former Consolidated employees and a former employee of Mooresville, N.C.-based Port City Electric Co. allege that Norwood-based New Starcom Holdings Inc. and Bethesda, Md.-based American Capital Strategies Ltd. failed to give them advance warning before they were laid off and did not properly compensate them.

Both Consolidated Electric, which is also known as Constar International, and Port City Electric Co. closed abruptly on Oct. 31, 2007, laying off hundreds of employees.

According to a notice received by the Massachusetts Executive Office of Labor and Workforce Development, 253 Consolidated employees lost their jobs as a result of the closure. Two notices received by the North Carolina Department of Commerce stated 251 employees of Port City Electric were laid off at the company’s Moorseville and Raleigh offices.

The wording of the respective notices sent to officials in Massachusetts and North Carolina are virtually identical with the exception of the number of employees affected and the designated company contact. The notices were dated Oct. 31 - the date of the companies’ closures - and received by the respective state offices on Nov. 5.

A federal law requires that companies give 60 days notice before most mass layoffs. The lawsuit alleges that the defendants failed to give employees timely warning of their termination by informing them on the day of the two companies’ closures.

Stuart Miller, lead attorney for the former employees, described the case as ‘‘the first of its type’’ because the lawsuit is not against the direct employers but rather the companies believed to own and control them.

‘‘Two separate closings take place simultaneously in two diverse jurisdictions, so it becomes kind of obvious that the parent or parents made this decision,’’ Miller said. ‘‘It’s hard to believe that they both decided on the same day to shut down (on their own).’’

Robert Schwartz, an attorney representing American Capital Strategies, was unable to comment on the lawsuit Wednesday. Court documents do not yet identify an attorney for New Starcom Holdings.

The two companies have yet to answer the former employees’ complaint and were granted an extension on Wednesday. Their formal answer is now expected by Jan. 18.

The lawsuit, which is asking for class action status, seeks unpaid wages and other pay and benefits that would have been earned by at least 100 employees affected in the 60 days following the closures.

A.J. Bauer may be reached at ajbauer@ledger.com.

Patriot Ledger