Guam Shipyard Faces Class Action Lawsuit For Layoffs

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151 workers let go after shipyard loses bid for Navy contract

By Mar-Vic Cagurangan

HAGÅTÑA, Guam (Marianas Variety Guam, Feb. 3, 2014) – Guam Shipyard is facing a $2 million class action filed by former employees who lost their jobs following the company’s failure to secure a new contract with the U.S. Navy.

The employees said they received notices of job termination from the company without prior warning as required by the Worker Adjustment and Retraining Notification Act or WARN.

The lawsuit, which also named Guam Shipyard owner Mathews Pothen as a defendant, was filed with the District Court of Guam on Friday.

Named plaintiffs were Russ Carlberg, Roel Dacasin, Reynaldo Galves, Delmario Cortez, Gary Chang and others "similarly situated." They are seeking a jury trial.

Guam Shipyard dismissed more than 150 employees on Oct. 15, 2013, four days after the Navy awarded a $77.9 million contract to Cabras Marine Corp. for ship repair at the Ship Repair Facility on Naval Base Guam. The contract is for a term of five years.

"While terminating local labor, Guam Shipyard retained its H-2 labor force all to the detriment of the local labor force and Guam’s economy," the plaintiffs said.

Prior to the mass layoff, Guam Shipyard employed a total of 233 U.S. workers and 70 H-2 workers. The 151 workers laid off were U.S. citizens and permanent residents.

Less than a week after the contract award to Cabras, Guam Shipyard filed a protest with the Government Accountability Office challenging the Navy’s procurement decision, but withdrew the protest on Dec. 12.

No warning

According to the lawsuit, Guam Shipyard never warned the employees that their continued employment was at risk during the solicitation period.

"To the contrary, at all times during the bid process, Guam Shipyard gave the employees assurance that (Guam Shipyard) would win the solicitation and their employment was secure," the complaint said.

"The Oct. 15 terminations, even if necessary, were not an unforeseeable consequence of the defendants’ failure to secure an award of the solicitation," the lawsuit said.

The termination notices issued by Guam Shipyard were effective immediately.

"In fact most non-essential personnel did not receive that day’s wage and were given one hour to remove all their personal belongings. Some employees had worked at the shipyard more than 15 years," the lawsuit said.

In an earlier interview with Variety, Pothen said Guam Shipyard had retained 100 workers.


A spokesman for the Military Sealift Command earlier told Variety that the new contract allotted a 60-day transition for Cabras Marine to move into the Ship Repair Facility on Naval Base.

The plaintiffs said the "terminations were not necessary" since a 60-day transition was in place.

They also argued that Guam Shipyard "continues to perform ship repair work for the Military Sealift Command under an indefinite delivery, indefinite quantity contract that expires in June 2017 and the revenues from these operations would have sustained payments of wages," the lawsuit said.

The plaintiffs said Pothen instead chose to dismiss employees en masse "to save himself and Guam Shipyard from having to expend at least 60 more days of wages and benefits for the terminated employees."

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