Republic Steel Ordered to Pay $4.6M in Breach of Contract Case; Announces Layoffs After Verdict

  • Republic Steel Ordered to Pay $4.6M in Breach of Contract Case; Announces Layoffs After Verdict

    Republic Steel Ordered to Pay $4.6M in Breach of Contract Case; Announces Layoffs After Verdict

    August 28, 2023 – In a significant legal decision, Republic Steel, based in Ohio, has been ordered to pay nearly $4.6 million to Pennsylvania trucking companies Beemac Inc. and its affiliate, Deemac Services. The federal jury found that Republic Steel had breached its contract by failing to pay outstanding invoices for transportation services provided in 2019 and 2020.

    The verdict came after a three-day trial that ended on July 12 and was upheld by U.S. District Court Judge William S. Stickman IV on August 10.

    Court Findings
    According to court documents, Republic Steel had agreed to use the transportation services offered by Beemac and Deemac for specific lanes in 2019 and 2020. Despite this, the steel manufacturer “refused to make payment of the amounts” as agreed upon for the two years, leading to the legal suit. Attorney Daniel McLane, who represented Beemac and Deemac, told FreightWaves, “We are pleased with the jury’s verdict and the attention they paid to this case.”

    The legal suits, although initially separate, were consolidated for the trial in the U.S. District Court for the Western District of Pennsylvania.

    Fallout and Layoffs
    On the same day the final judgment was passed, Republic Steel, a subsidiary of Mexico-based Grupo Simec, announced it would indefinitely cease steel production at some of its North American plants, including those in Canton and Lackawanna, New York. Nearly 500 workers will be laid off as a result. Attorneys for Republic Steel have not yet commented on the verdict or the timing of the layoffs.

    WARN Act Notification Delays
    Bill Teets, Communications Director for the Ohio Department of Job and Family Services, confirmed that a Worker Adjustment and Retraining Notification (WARN) Act letter was received 12 days after the announcement of the layoffs. “It appears it was mailed to the wrong address and was delayed in getting it to us,” Teets explained. The notice stated that Republic Steel had “encountered sudden and unforeseen business circumstances.”

    Background of the Plaintiffs
    Beemac and Deemac originally filed suit in Beaver County, Pennsylvania, in September 2020. The complaint was moved to federal court later that same month. Mediation attempts prior to the trial were unsuccessful.

    Founded in the mid-1980s by Rick Macklin, Beemac and Deemac have become significant players in the trucking and logistics industry. With over 400 truck drivers, Beemac also initiated an employee stock ownership program in 2019.

    Future Outlook
    This verdict and the subsequent layoffs by Republic Steel pose serious questions about the future of the company and the implications for the steel industry at large. For now, the plaintiffs, Beemac and Deemac, look forward to “continuing to provide the great services we do in this industry,” as stated by their attorney, Daniel McLane.

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