LME, Inc.

Lakeville Motor Express shut down operations unexpectedly on November 19, 2016 and subsequently filed for bankruptcy protection on January 20, 2017.[5] Lakeville's president, Deming, blamed the closure on "heavy financial losses" citing challenges in "handling business levels as required" and difficulties hiring drivers. According to a November 19th letter from Deming to a local Teamster's Union leader, "Lakeville is out of cash and has no reserves to pay any amounts owed to employees or vendors..."[1]

Immediately following the shutdown, Union officials, who represented 95 Lakeville drivers and dockworkers, accused Lakeville ownership of redirecting freight to Finish Line Express, a carrier formed earlier in 2016 by a former Lakeville executive. Union leadership also criticized Lakeville for giving employees little to no notice of a possible shutdown especially in proximity to a holiday. At the time, LME said that the shutdown of Lakeville Motor Express would not impact LME's operations.[1]

Following the shutdown, the union workers who had been laid off from Lakeville filed complaints, along with the Teamsters, with the state of Minnesota and the National Labor Relations Board (NLRB) alleging unfair labor practices.[6]

On January 26, 2017, the state of Minnesota sued Lakeville, LME, and Finish Line accusing the three companies of fraud, wage theft, and fraudulent transfer of assets from Lakeville to the other two companies. The suit claimed Lakeville's shut down had been a ruse manufactured as an excuse to lock out union workers and withhold back pay.[7]

In March 2018, two additional suits were filed alleging violations of the company's bankruptcy and pension obligations. On March 15, a number of Teamsters pension funds sued Lakeville, LME, Finish Line, as well as Roger and Shari Wilsey. The suit accused unpaid liabilities toward a number of pension plans related through a collective bargaining agreement. The suit claimed the liability to be $90.1 million. On March 28, LME and Finish Line Express co-owner Roger Wilsey was sued by the trustee responsible for Lakeville's bankruptcy petition. According to the suit, Lakeville was not eligible for bankruptcy protection because of alleged "fraudulent transfer" of Lakeville assets to either LME or Wilsey. According to the trustee, the transfer had been a way to hide assets including $4.3 million in payments to LME. The suit also claimed that LME controlled or shared Lakeville's operations and many other functions through 2016.[7]

The Minnesota Department of Labor and Industry said in April, 2018 they had reached a tentative settlement agreement with LME for the department's case. Further details were withheld for 60 days since Lakeville and LME were still in talks to settle other cases. Also in April, the NLRB informed the Teamsters it had found enough cause for concern to open an investigation into the union's assertion that Lakeville had not actually shut down but had effectively switched to cheaper, non-union labor and continued operations as LME. The NLRB said it would attempt to settle with Lakeville to avoid going to trial.[7]

In 2018, the NLRB found that the workers had been wrongly terminated in favor of cheaper, non-union labor with LME acting as the "alter ego" for Lakeville. The ruling concluded that the workers were entitled to $1.25 million in back pay. LME officials denied the allegations but were forced to began paying back pay in June 2019.[5]

On July 12 2019, LME, Inc. shut down, closing all of its approximately 30 locations in the Midwest. The shutdown reportedly occurred with short notice to employees, though the company said that some employees would remain to help redirect freight for delivery by alternative carriers. A Minnesota Department of Labor and Industry spokesperson said it would "assess the situation" given reports in local news outlets that some employees had not been paid.[6]