KANSAS CITY, Kan – Employees at a metro automotive business say they feel like they were “sold like slaves” after their company filed for bankruptcy. Arrow Speed Warehouse has shut its doors and filed for bankruptcy, but, employees are still held by their contract with the bankrupt company, raising big questions about employee rights. For years, a group of men worked at Arrow Speed Warehouse, selling specialty auto parts.
Signing on the Dotted Line
It's a competitive industry, so, employees weren't surprised their boss had them sign non-compete agreements. The employees say the non-compete agreements came out of the blue, but they still signed them. "We all pretty much thought we weren't going to have a job if we didn't sign it," Matt Murphy said. That signature is costing them big. Arrow filed for bankruptcy this fall and 213 people lost their job. Court paperwork obtained by Call For Action shows the company began the bankruptcy legwork in July, even though the company did not officially file for bankruptcy until the fall. On July 29, 2008, the company entered into a letter of intent with Keystone Automotive Operations, Inc.
A Better Option?
Arrow says it thought selling its assets to one company would be better than a piecemeal liquidation. According to the paperwork, the goal was to increase the chance that employee jobs would be preserved. "Basically sold all their assets to our largest competitor right next door," Aaron Green said. Employees say Arrow had a message board internally and posted job offers from other companies. Some employees even showed Call For Action fliers from other companies offering jobs. Others interviewed with the competitor who took over Arrow's assets. Some were offered jobs. Others weren't. The employees we spoke with say they were offered entry level jobs in October. Several of them say they declined those jobs because they were a significant pay cut. So, they looked for their own jobs. Green lined up his own job, and got a letter from Keystone confirming its offer was now off the table. That was Nov. 7.
An Unexpected Letter
Green and others didn't think much of it until another letter appeared in the mail in late November, informing the employees that Keystone Automotive Operations Inc., had purchased the assets of Arrow in bankruptcy. "As part of the recently closed Arrow-Speed Warehouse transaction, Keystone now owns all non-compete and non-disclosure agreements signed by Arrow employees. Keystone takes this purchase seriously and expects former Arrow-Speed associates to comply with the agreements in place," the letter said. "We will not hesitate to bring legal action to any offender that violates this non-compete." Murphy said he felt they “had been sold like slaves." "I mean if the company went out of business how could they possibly come after us?” Green said. “They apparently wrote them so we could be sold basically.”
Discrepency in Paperwork
When the men started digging, they realized everyone's name wasn't in the bankruptcy paperwork. Murphy's name isn't listed, but he still got a threatening letter. "It could be a clerical error or it could be inconsistency on how it was done," Murphy said. Regardless, the error cost Murphy a job. He passed an offer up when he got the legal letter in the mail, and only found out it didn't apply to him until months later. The men hoped to sue, but found it's not worth it. The time and money they'd have to invest they felt is not worth the time they have to sit out of the job market. However, with the job market continuing to sour each day, it's getting harder for these men to find jobs. "It's a very difficult situation for employees and I hate they are going through this," Employee Rights Law Firm owner Mark Jess said.
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