Layoffs May Violate Federal Law

It's a sign on the times all across the country -- plants closing and employees being laid off.

But many of these companies are actually violating federal law when they suddenly close up shop, reports Early Show consumer correspondent Susan Koeppen.

Depending on the number of employees a company has, it's required to give notice that layoffs are coming or that it's shutting down a plant, Koeppen explains. The law is called the Worker Adjustment and Retraining Notification Act, otherwise known as WARN. But Koeppen says numerous cases were found in which ample notice wasn' given and workers suddenly were out of a job and without paychecks.

Now, people like Lily Vaughn are fighting back.

Vaughn's husband, Sam, drove a truck for a company called Jevic Transportation, while she stayed home in Bordentown, N.J., to raise their family. The two were living the American dream until one night last May when FedEx knocked at the door with an overnight delivery -- a letter saying Jevic was shutting down, and that Sam's job of 15 years was gone.

"Seventeen hundred people out of work. They left truck drivers on the road with no way to get home," Vaughn remembers. "Our final paychecks bounced. Health insurance was stopped."

That last loss was a devastating blow to Sam, who was undergoing cancer treatment. Suddenly, the family had to decide between paying for his medical care and putting food on the table. Without the help of health insurance he had to stop chemotherapy, and died less than 3 months later.

"He lost his spirit," she said. "This company, when it closed up, brought a strong man to his knees."

According to the WARN Act, which has been on the books for two decades, employees are supposed to get 60 days notice if their company is cutting its workforce or closing facilities. Lewis Maltby, president of the National Workrights Institute, says two-thirds of all employers don't give their employees proper notice, leaving the workers blindsided.

"The difference between getting notice and not getting notice is the difference between a problem and a nightmare," he says.

Across the country, people aren't getting such notice, Koeppen says. According to the government's General Accountabity Office, only nine percent of employees who lose their jobs in layoffs or plant closings ever receive notice.

On behalf of Sam, Lily Vaughn has joined other employees in a class action suit against Sun Capital Partners, the owner of Jevic Transportation, claiming the company violated their rights.

"I'm angry at these people. I would like them to explain to me, look me in the eye and say why they did this," she said. "They talked about Joe the Plumber, well, there was Sam the Rruck Driver. I am Sam the truck driver's wife and I am not going to give up. People need to know that we have rights. That's not right what these companies are doing."

In a statement to CBS News, Sun Capital Partners says, "The company deeply regrets the impact that this action has had on its employees and stakeholders. ... Sun Capital does not believe that the lawsuit has any merit."