Philadelphia Energy Solutions Hit with WARN Act Class Action Over July 1 Mass Layoff

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Philadelphia Energy Solutions (PES) and Philadelphia Energy Solutions Refining and Marketing are the defendants in a proposed class action filed over a mass layoff scheduled for July 1 stemming from a June 21 refinery fire at the companies’ Girard Point facility in South Philadelphia.

“Due to the layoffs, many former PES employees will be forced to relocate far and wide in order to obtain work in the same industry,” the suit states. “Other employees are husbands and wives in single-income families whose families are now left with the reality of not being able to provide for their families.”

According to the lawsuit, the mass layoff is expected to affect more than 1,000 employees, including roughly 614 union steelworkers. The plaintiffs, who each worked for PES for more than six years, allege the defendants violated the Worker Adjustment and Retraining Notification Act—the WARN Act—by failing to provide affected workers with 60 days’ advance written notice of their terminations. 

“[Philadelphia Energy Solutions’] mass layoff deprived these ‘workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining that will allow these workers to successfully compete in the job market,’” the lawsuit reads. 

The large-scale worker terminations come in the wake of a three-alarm fire that tore through the Girard Point PES complex in South Philadelphia. According to the suit, the 335,000 barrel-per-day Girard Point refinery, the largest such complex on the East Coast, burst into flames as the result of a series of explosions that reportedly injured a number of workers. The exact cause of the fire is so far unknown, the suit says, but Philadelphia officials have stated the blaze started in a butane vat that somehow ignited and exploded in the early hours of June 21.

Five days after the fire, PES announced it would be permanently shutting down both its Girard Point and Point Breeze plants despite the latter reportedly being able to operate as a standalone facility. According to the case, PES claimed the explosion would make it impossible to continue operations at the refinery complex. The June 21 fire was the second in two weeks at the PES complex, the lawsuit says, and Philadelphia Mayor Jim Kenney has called for a task force to look into the incidents and help the community and PES employees.

The lawsuit goes on to state that news of the closure of the Girard Point and Point Breeze refineries comes amid reports of the defendants’ “recent history of financial turmoil,” with PES reportedly standing on “shaky financial grounds for quite some time.” According to the suit, “period of prosperity” for the company that began around 2012, when a joint venture between Sunoco and the Carlyle Group helped keep the plant open, came to a hard stop last year when PES announced its bankruptcy to reduce and structure debt. The case says that in January 2019, PES “dramatically” pulled back on a large maintenance project in the vicinity of where the June 21 explosion occurred. 

The plaintiffs argue that the Girard Point plant closure was not an unforeseen incident given the defendants’ business of handling flammable and highly volatile chemicals. “For this reason alone, it was foreseeable to the company that an explosion like the one that occurred on June 21 could reasonably occur at its South Philadelphia refinery,” the case charges, adding that the plant closure itself could certainly be considered in the cards given the nature of the incident and PES’s financial troubles. 

The case looks to cover a proposed class of all former Philadelphia Energy Solutions employees who were terminated without receiving 60 days’ written notice before the date of their termination.