Workers abruptly laid off by Lakeville Motor Express in 2016 began receiving $1.25 million in back pay this month, in accordance with a federal ruling that found evidence that the union workers were wrongly dismissed in favor of cheaper nonunion laborers.
About 95 Lakeville Motor Express truckers and dockworkers were abruptly locked out of their Roseville job site without notice or pay just before Thanksgiving 2016. While Lakeville Motor Express filed for bankruptcy, affected workers claimed the entity actually continued to operate, just at a different location in the Twin Cities and under the new name LME Inc.
The workers and their union, the Teamsters, filed formal complaints with the state and the National Labor Relations Board (NLRB). Last year, the NLRB said its investigation found wrongdoing and signs that LME Inc. and Lakeville Motor Express had operated as "alter egos" for one another — which LME officials deny.
In January, the NLRB ordered LME in New Brighton to cease and desist from nonunion activity; ordered the company to issue back wages to 89 of the 95 workers; and required LME to first offer any new job openings to the affected class.
In an April 30 filing, the NLRB also said LME had 60 days in which to begin issuing back pay and penalties to affected workers. Failure to do so would increase the judgment from $1.25 million to $2.4 million, the document said. The last set of checks must be paid to affected workers by June 2024.
Roger Wilsey, chief executive of LME Inc. in New Brighton, said on Monday that the settlement did not include any admission of wrongdoing and that LME Inc. was a different entity from Lakeville Motor Express.
"The state and NLRB case was settled and this is put to bed," Wilsey said Monday. "It was settled just to be done with it … instead of paying hundreds of thousands of dollars in legal fees."
Settlement negotiations began between the Teamsters and LME last year. Wilsey said the first checks were issued to affected Lakeville Motor Express workers this month.
Bill Wedebrand, spokesman for Teamsters Local 120, confirmed that the workers who were supposed to get a check under the NLRB agreement received their first payments. Unless payments are missed between now and 2024, "all of our people now know that this case is settled," he said.
Each of 89 affected workers will receive roughly $13,157 between this month and June 2024, according to the NLRB settlement.
The Teamsters union also received a small sum from LME that represented workers' union dues that went unpaid because of the sudden layoffs in 2016, Wedebrand said.
In its April 30 notice, the NLRB said its final settlement involves only LME Inc., not Lakeville Motor Express, as the latter entity filed for bankruptcy in 2017.
Not everyone is pleased with the final outcome.
"I'm not thrilled about this [NLRB] settlement. But it's far better than what the Minnesota Department of Labor and Industry was forcing us to take," said Keith McDonald, one of the workers locked out from Lakeville Motor Express. He said the NLRB settlement amounts to only a fraction of what he is owed. In addition, "five years and six months is a long time to pay people off," he said.
It is unclear how the state case will end and how payments associated with it would be dispersed. It is separate from the NLRB decision.
In January 2017, the state Labor Department sued LME Inc. and affiliated firms Finish Line Express and Lakeville Motor Express over the abrupt worker layoffs and lockout. The case was settled, with LME agreeing to pay the bankruptcy trustee $567,500 to cover back wages and other damages, according to bankruptcy court papers.