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6500 Cherrywood Ln - Greenbelt, MD 20770 - Main Tel: 301-344-8018 map
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101 W Lombard St Room 8530 - Baltimore, MD 21201 - Main Tel: 410-962-2688
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Interpleader filed by Chapter 11 debtor after confirmation of liquidating plan against union and company that paid employees for assignment of their WARN Act claims. Union cross-claimed against assignee to invalidate assignment of claims by employees on grounds of fraud, unconscionability, that union was holder of claims and not the employees, and for violation of Rules of Professional Responsibility because union claimed that its counsel represented the individual employees and that assignee was barred from contacting employees directly. Assignee cross-claimed against union alleging breach of contract and tortious interference.
Held, (1) Union had standing to sue on behalf of employees; (2) however, claims were property of the employees and not the union, and therefore, employees had the right to assign claims without union approval; (3) assignments were not procured by fraud and were not unconscionable; (4) refusal of employees to honor assignments constituted breach of contract; the conduct of union did not amount to tortious interference with contract because the union acted in good faith in advising members not to honor assignments. Judgment for assignee.

Entered: 
2005-05-08
Case: 
99-59994
Judge: 
James F. Schneider