TESTIMONY OF JOHN H. CHURCH, JR.
TESTIMONY OF JOHN H. CHURCH, JR. given October 30, 1997 before the Subcommittee on Administrative Oversight and the Courts of the Senate Committee on the Judiciary
My name is John H. Church, Jr. I live in Greer, South Carolina. I have been married for 30 years and have four children. In February, 1989, I was employed by Emery Air Freight Corporation as a Regional General Manager. I had been an employee of Emery for twenty-one and one-half years, and had worked my way up through the ranks. I was making $77,000 per year. I was 54 years old.
On February 17, 1989, Consolidated Freightways announced that it wanted to buy my Company, Emery Air Freight. For the acquisition to go forward, we employees had to vote in favor of the purchase because we owned all of Emery's preferred stock through our ESOP. To persuade us to go along with the acquisition, Consolidated Freightways told us in writing that:
"The Company ... will continue to employ all employees employed by the Company under terms and conditions of employment substantially comparable to, and in any event no less favorable than, those existing immediately prior to the Effective Time."
Because of my seniority with the Company, I had the right to be fired only for good cause after a hearing with the Vice President for Human Resources. I also had the right to two weeks of severance for each year of employment, up to a maximum of 26 weeks.
I believed Consolidated Freightways' promises. As a result, I and other Emery employees agreed to tender our shares. The acquisition was completed on April 3, 1989.
Eight days later, on April 11, 1989, I was constructively discharged. I was given no hearing, and there was no cause. I was given no severance. I was replaced by a man in his thirties, with less experience and fewer qualifications.
My firing was demoralizing. I had given my heart and soul to the Company for decades, and done everything the Company had asked of me. I was consistently evaluated as one of Emery's best managers. They didn't fire me because I was a bad employee .... They fired me because of my age. I was angry. I drove 90 miles to Charlotte, North Carolina, to the offices of the EEOC. I told them that I wanted to file a charge of age discrimination. The EEOC attorney told me that I would never win and that this type of thing happens all the time.
Soon thereafter, I got a call from a former Emery colleague from Richmond, Virginia, who told me that he too had been fired and replaced by a younger person. He told me that Consolidated Freightways had done that to hundreds of Emery managers across the country. He told me that he had contacted a lawyer in Richmond, and asked me if I wanted to talk to the attorney and join the suit. I told him that I would be interested in speaking with the attorney, but that I could not afford to pay attorneys' fees or case costs.
The attorneys agreed to take the case on a contingency basis, only being paid if we prevailed. They also agreed to advance to all costs of suit. I told them to name me as a plaintiff. Five others from Kentucky, Georgia, Missouri, Illinois, and Connecticut soon also joined in.
The Richmond lawyer called a California law firm that was familiar with class actions and they filed a class action lawsuit on behalf of the hundreds of Emery managers to whom this had happened. We sued in Federal Court in San Francisco, California, near where Consolidated Freightways is based.
The lawsuit was filed in 1990 and went on for four years. I was deposed for three days. The questioning was difficult. Consolidated Freightways hired some of the best lawyers in the country. I produced documents, and I answered written questions. I also worked closely with my attorneys, who deposed the officers of Consolidated Freightways and discovered that prior to the purchase offer being announced, Consolidated Freightways had already made its plan to slash severance, fire the older Emery managers, and replace them with younger people at lower salaries.
Our attorneys worked hard. They hired a professor of statistics from Duke and a business consultant from Philadelphia with expertise in the transportation industry to analyze our claims. In late 1992, a court-approved mediator held a several day mini-trial, where testimony was presented on videotape, documents were put forth, and extensive arguments made about all issues. Without good lawyers, we would have been crushed.
In early 1993, the case settled for $13.5 million. I received approximately $120,000.00. I was happy to get it. It covered my family's expenses during the years that it took me to get another job comparable to the one I had at Emery. From the Settlement Fund, the attorneys were repaid the approximately $500,000 that they had paid out of their own pockets on our behalf. For their time and hard work, the attorneys were paid approximately $4 million in attorneys' fees, or approximately 30% of the recovery. The Class received $9 million.
After the case settled and the money was paid out to the class, members of the Class called me to thank me. One woman told me that the payment from the case changed her life. My experience with this case has made me a believer in the importance of class actions. I did not have the resources to fight Consolidated Freightways on my own. The costs of suit, including the costs of expensive expert statisticians, were just too high. By banding together, we were able to achieve justice. Without the class action, we would not have been as successful. I have spoken to at least one person who tried to sue on his own, but did not fare nearly as well.
For people like me of average means to have a chance against a big company when we have been wronged, we need the help of class actions.
Thank you for listening to me.
--John H. Church, Jr., October, 1997
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