Between the periods of 2005-2007, OFCCP had several open compliance reviews with Pilgrim’s Pride Corp. establishments. In just the last month, three DOL administrative complaints for audits from this period were dismissed. Dismissals resulted from Pilgrim’s Pride bankruptcy filed in 2008.
In December of 2008, Pilgrim’s Pride declared bankruptcy, and proceeded through the process, effecting a bankruptcy plan in December of 2009. As part of the bankruptcy plan, the Court gave notice of Pilgrim’s Pride bankruptcy available to all relevant parties, requesting that all parties submit claims by June 2009. OFCCP filed a claim alleging discriminatory practices at Mount Pleasant and Lufkin, TX, factories in May of 2009. Pilgrim’s Pride then filed a Claims Objection Procedures Motion to OFCCP’s claims of discrimination to which OFCCP did not respond. As a result, the Court granted Pilgrim’s Pride’s objection, thus disallowing OFCCP’s claim. No other claims were submitted for other Pilgrim’s Pride establishments under review by OFCCP.
On September 15, 2015, one day after the Pilgrim’s Pride bankruptcy plan ended, the DOL filed the first of three administrative complaints with the Office of Administrative Law Judges for the Athens, AL compliance review. The next two complaints were filed for Marshville, NC, and Mount Pleasant, TX, in October 2015 and May 2016 respectively. A press release was also issued for the Mount Pleasant review in May 2016.
As a claim for the Mount Pleasant review was submitted during the bankruptcy plan, but ultimately disallowed, this administrative complaint was not able to move forward. Further, since OFCCP failed to file claims for the Athens and Marshville reviews prior to the bankruptcy notice period of June 2009, the Courts dismissed these complaints. OFCCP maintained they were not properly notified of the Bankruptcy case, thus timely claims could not be submitted in 2009. The Court found that this could not be possible, given that the Southwest and Rocky Mountain Regional Office filed claims in May of 2009 in accordance with the notice. Given that OFCCP is one agency, the court expected that if one region had sufficient notice then all regions should have had sufficient notice.
For more information on the full proceedings, please reference this document. This particular case serves as a helpful reminder to consult legal counsel for guidance during a bankruptcy period if there are open reviews covering a time period prior to bankruptcy.
By Amanda Shapiro, Senior Consultant, and Rachel Monroe, HR Analyst, at DCI Consulting Group