State drops Beloit Corp. workers' case

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The Wisconsin Department of Workforce Development has decided not to pursue an appeal of a court ruling denying former Beloit Corporation workers severance pay.

About 378 non-union employees of the papermaking machine company have been battling for 11 years to gain the severance packages they say they were promised by the company. On Nov. 22, the U.S. District Court for the District of Delaware ruled against the employees. Employees were hoping for an appeal of that ruling.

Some former employees got the news Tuesday that there will be no further appeals in the case.

Dan Morris, who worked for Beloit Corp. for more than 26 years, was disappointed by the news.

"What really bothers me is the Department of Justice felt pretty strong about it (an appeal for the settlement). But when I asked the Department of Workforce Development why they didn't want this, I was told they had spent enough time on this and it was, ‘sorry, but you have to move on'," Morris said.

An email sent to Morris and other former Beloit Corp. workers from Assistant Attorney General Richard Moriarty indicated it was a Department of Workforce Development decision not to move forward.

"DWD has decided not to appeal. As a result, we will close our file here at DOJ," Moriarty's email stated. "DWD will communicate with the affected workers informing them of this decision. ... Ultimately, we obtained some recovery for the workers, through the settlement with the Beloit bankruptcy estate. Those at DOJ who worked on this case over the years (with several having retired in the interim) wish that we could have obtained the full recovery to which the workers were entitled."

Beloit Corp.'s parent company, Harnischfeger, filed for Chapter 11 bankruptcy protection in June of 2000. The company sold its subsidiaries or, in the case of Beloit Corp., closed the firm. The mining equipment portion of Harnischfeger remained solvent and became Joy Global, based in Milwaukee. The legal action seeking severance for employees was filed against Joy Global.

The former employees claimed Harnischfeger/Joy Global re-wrote the severance pay policy in Beloit Corp.'s final days, providing only two weeks of severance pay instead of one week for every year of service to the company.

In September of 2000, the Wisconsin Department of Workforce Development determined the employees were owed a total of $4.2 million in severance pay.

In April of 2001, the bankruptcy court ordered the company to pay $490,525 to workers.

After a series of court battles, a breach of contract case was heard last March in federal court in the U.S. District Court in Wilmington, Del. But the ruling was against the employees. Morris said employees were told the Department of Justice was prepared to appeal, but the Department of Workforce Development, which called for the legal action against Joy Global initially, decided not to pursue the appeal.

Sen. Tim Cullen, D-Janesville, sent a letter to Department of Workforce Development Secretary Reggie Newson Tuesday, asking him to move forward with the appeal on behalf of the former Beloit Corp. workers.

"On behalf of the aggrieved workers, and because of the bad precedent the decision sets, I believe it is in the public interest to appeal," Cullen wrote in his letter.

He went on to give several points of argument where he felt the state could prevail in this case.

In its prime, Beloit Corporation employed about 3,500 people in the Stateline Area, with manufacturing facilities in Beloit and research and development facilities in Rockton.

 

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