FreightCar case headed to higher court

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February 12, 2008

By SHAWN PIATEK The Tribune-Democrat Tue Feb 12, 2008, 11:02 PM EST

A battle over the future of former FreightCar America Inc. employees now is headed to a higher court.

And even in the wake of Monday’s ruling by a federal judge in Johnstown, it remains unclear whether those workers will return to their jobs while pursuing a lawsuit against the rail-car maker.

At issue now: Whether the U.S. Third Circuit Court of Appeals will grant FreightCar’s request for a “stay” – which would allow the company to postpone implementation of a judge’s order to put those employees back to work at the now–shuttered Franklin Borough plant.

“Our clients are still without work, many of them without pay or health benefits,” said Pittsburgh attorney John Stember, whose firm is representing the workers.

“It is important that this proceeds expeditiously,” he added. “If the Third Circuit sees fit to deny the stay, our clients will return to work.”

Employees, with backing from the United Steelworkers union, filed a federal suit against FreightCar last year. They claim the company furloughed workers to prevent them from becoming eligible for retirement benefits.

In response to the workers’ request, U.S. District Judge Kim Gibson last month issued a preliminary injunction requiring FreightCar to put more than 180 union employees back on the job pending the lawsuit’s resolution.

The company appealed the injunction and also asked Gibson to delay enforcing his order while that appeal was heard.

Gibson on Monday issued a 99-page opinion explaining why he denied FreightCar’s request. The judge touched on several key points.

One of FreightCar’s main complaints was that the injunction will cause the company to suffer irreparable financial harm.

But Gibson noted that the local union employees stood to face the same irreparable harm. He said the two factors balanced one another, excluding them from having any bearing on his decision.

Gibson also wrote that he denied the stay because granting it would not render the company’s appeal of the injunction moot.

He also ruled against the stay because, he said, granting one would not be in the best interest of the public, noting the harm done to Franklin Borough’s fiscal health due to lost tax revenue as a result of the company shifting work to other plants.

“It’s a very thorough decision, and obviously Judge Gibson took a lot of time and care with it,” Stember said.

Gibson said he is deferring his ruling on a civil contempt of court motion filed against FreightCar for not immediately following the preliminary injunction’s orders.

Gibson said he will not act on the contempt motion until the Third Circuit makes its own decision on FreightCar’s request for a stay.

Stember said he couldn’t be certain when the Third Circuit will rule on the stay motion. He said he expects his firm will file a response next week to the company’s motion.

If the Third Circuit also rules against the stay, Stember said there is a chance the furloughed workers could be entitled to back wages from Jan. 11 forward.

“It will be up to court to make that decision,” Stember said. “But our position is the back pay goes back to at least the day of the injunction.”

FreightCar America officials did not respond to a request for comment.

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