Celadon leaves former drivers hanging without bankruptcy filing in Canada

Former employees and contractors are facing the staggering challenge of claiming what they say Celadon owes them under Canadian law. Making matters more difficult, Celadon hasn’t filed for bankruptcy in Canada — something that ironically could help former Canadian workers make claims and secure federal benefits.

Taylor, a lease-operator for Hyndman, had put about C$150,000 into lease and maintenance payments since 2015. She has just C$39,000 in payments left until she owns the truck.

Taylor wants to buy out the remainder of the lease but is now fearful that the rig will be repossessed and that she’ll lose the investment.

“I could buy a house with that money,” she said.

Celadon ‘getting away with so much’

Taylor drove that truck proudly for Hyndman across North America and took part in fundraising events such as Trucking for a Cure. Her Canadian supervisors, meanwhile, worked to ensure she got the freight she wanted and got back to Canada for her treatments. 

“Hyndman treated me well,” Taylor said. “But Celadon is getting away with so much.”

Randy James Ulch, a former employee-driver for Hyndman Transport, said he is owed around C$2,000 in accrued vacation pay and severance from his year at Hyndman.

“There are others who are out a hell of a lot more,” Ulch said.

Former employees could trigger proceedings

Former employees have a clear interest in Canadian bankruptcy proceedings. They can get preferential status as a creditor in a bankruptcy, under Canada’s Bankruptcy and Insolvency Act. Along with a filing, a court-appointed trustee would oversee and facilitate any outstanding obligations to Celadon’s Canadian employees and contractors.

In addition, even if former employees are unable to collect from the sale of any company assets, they can apply to have the federal government compensate them.

Celadon CEO Paul Svindland did not respond to FreightWaves’ questions about outstanding pay for its former Canadian workers or if the company has plans to have Hyndman file for bankruptcy in Canada.

While Canadian subsidiaries frequently file for bankruptcy concurrently with their U.S. parents, they aren’t necessarily legally required to do so.

Celadon’s obligations would depend on its corporate structure and relationship between the U.S. and Canadian companies, said Hans Parmar, a spokesperson for the federal Ministry of Innovation, Science and Economic Development, which oversees bankruptcy and insolvencies.

Sara Slinn, a professor at Osgoode Hall Law School at York University in Toronto and Canadian labor law expert, said Hyndman’s former employees and contractors could consider pooling their resources for a lawyer and taking their case to the federal Industrial Relations Board for unpaid wages or severance, independent of any bankruptcy proceedings.

Expert: Ex-Hyndman workers are stronger in numbers

“If they can coordinate themselves and work as a group, they have a much greater chance of success,” Slinn said.

Owner-operators and lease-operators could also potentially challenge their status as contractors depending on the specifics of their work with Hyndman. 

“Misclassification is very common in trucking,” Slinn said. 

Slinn couldn’t speak to the particulars of how Celadon shut down Hyndman but said U.S. firms are known to neglect their obligations to Canadian workers, particularly in cases of mass dismissals resulting from closures or bankruptcies.

“This is a problem in Canada. We have a lot of American companies operating here. It’s not that uncommon to have employees left in the lurch when they shut down — and often the executives are untouchable.”