OFCCP’s claims seeking relief for alleged discrimination prior to bankruptcy shot down by Texas Court
Federal bankruptcy court in Texas determined that OFCCP could not pursue claims seeking relief that arose from discrimination or other prohibited actions of Pilgrim Pride Corporation (PPC) that occurred prior to the effective date of the company’s bankruptcy plan. Such relief may include economic-loss damages (lost wages, interest, front wages, and fringe benefits) or a request for equitable instatement relief (e.g. the hiring of qualified individuals allegedly unlawfully denied employment).
The court further determined that OFCCP’s requests for cancellation, termination, and suspension of contracts, and the request for declaration of ineligibility against the reorganized company were also disallowed if the alleged discrimination occurred prior to the effective date of the bankruptcy plan.
However, any relief sought from discrimination that occurred after the bankruptcy plan became effective, OFCCP was free to pursue. The court also ruled that the OFCCP’s requests to prospectively enjoin PPC from failing to comply with Executive Order 11246 and its implementing regulations were not claims that were disallowed or discharged in PPC’s bankruptcy case. Thus, the OFCCP was allowed to pursue such "forward-looking" relief against the company.
For more information: http://hr.cch.com/eld/InRePilgrimsPride021517.pdf
On December 1, 2008 PPC filed its bankruptcy case and approximately six months later, on May 18, 2009, OFCCP filed a claim alleging contingent and unliquidated claims against PPC based on the company’s alleged discriminatory hiring and employment practices from "July 20, 2005 to Present" at several of it processing plants. PPC’s bankruptcy plan was effective on December 28, 2009. PPC filed their objection to OFCCP’s claim and on September 23, 2011 the court granted the objection and disallowed the claim. Shortly after the bankruptcy case was closed in 2015, OFCCP filed with the DOL’s Office of Administrative Law Judges three complaints against the reorganizing company. All three complaints alleged discrimination against qualified African American, Caucasian and female applicants for entry-level laborer and operative positions at three different plants in Alabama, North Carolina and Texas.
In each of the complaints, the OFCCP sought both monetary and equitable relief, including: lost wages, interest, front wages, and fringe benefits, including but not limited to, retroactive seniority; the hiring of qualified individuals allegedly unlawfully denied employment; cancellation of all government contracts with the reorganized company; debarment of the company from future government contracts; and a permanent injunction against the company from alleged continuing violations of EO 11246. All of the allegations were based on actions that occurred prior to PPC’s bankruptcy filing.