SOURCE: Chapter 19, 9.662, #1 (David J. Walsh (2010) 3rd ed. Employment Law for Human Resource Practice
In the year prior to its closing, a meat packing plant with 350 employees received numerous (over 30) "noncompliance records" from the Agriculture Department (USDA), citing serious failures to maintain sanitary conditions and warning of possible "regulatory or administrative action." A handwritten letter delivered on September 17, 2001 carried the same warning. On October 31, 2001 the USDA withdrew inspection after a third incident of rodent droppings, forcing a halt in production. Production had to be stopped again due to unsanitary conditions on November2. On November 7, the company's request to ship its product was denied and the company ordered by the USDA to destroy the suspect meat. The company had made a number of changes in equipment and operating procedures over this period. On November 15, the company detailed plans to spend $3 million for new coolers if the plant would be allowed to operate, but the USDA again refused permission. Later the same day the owner decided to close the plant. Employees were informed when they showed up for work the next day that their employment had been terminated. A group of employees sued the company for not providing adequate notice of the plant closing.
- What was the issue in this case?
- What should the court decide and why?
- Look up the case on the Internet. What were some of the indicators in analyzing the case?
- What did the court decide and why?
Pena c. American Meat Packing Corp., 362F.3d 418 [7th Cir. 2004]
The issue in the case:
The nature of ownership and product line of AMPAC:
American Meat Packing Corporation (AMPAC) specializes in the packing of meat products for distribution to different outlets in the U.S. The plant takes charged of the "slaughtering, butchering, and packing of 3,000 to 4,000 hogs every day".
The problem resulted when the plant was found by the United States Department of Agriculture (USDA) to have committed numerous insanitary practices. The plant was later receiving non-compliance report regarding its operation. Due to this, the AMPAC was prohibited to shift its products to the market and instead were ordered to destroy million pounds of meat worth about half a million dollars. Eventually, the USDA issued a closure order.
Finding it hard to commence commercial operations, AMPAC decided to close the plant on November 15, 2001 and the employees were officially informed of the decision the following ...
This is a labor case issue between the American Meat Packing Corporation (AMPAC) and Rufino Pena, German Alvarado, Rosa Ayala, et al., all workers of the company. The US DA prohibited the transfer of AMPAC meat to the market due to unsanitary practices. AMPAC retaliated by closing down the company and terminated the services of its workers.
The issue in this case: Was the plant closure decision of AMPAC management displacing 350 employees without prior notice lawful?
Long Term Debt, Contingencies and Leases
See the attachment.
Discuss trends, financial position, ratios, etc. For example, it may be helpful to discuss inventory turnover when assessing inventory valuation risk.
Obtain the 2010 financial statements and notes (annual report or 10-K) for Monro Muffler Brake, Inc. (MNRO). Use Tenneco for a benchmark and comparison purposes. This means ratios must be completed for both companies (but a description of the company only needs to be done for Monro).
To assess a company's financial statements, think specifically about: (1) the types of underlying transactions and events that affect the company, (2) how well the financial accounting rules (i.e., GAAP) reflect those transactions and events, (3) the aggressiveness or conservatism of management's accounting choices, and (4) how the annual report helps you assess the company's risks, financial position, and profitability.
For each item below, provide an easy to read and understandable presentation of the facts for your company. There should be a brief description of the items (Monro) and computational analysis (ratios).
LONG-TERM DEBT, CONTINGENCIES AND LEASES:
? Description of long-term debt
? Major leasing activities (if any) and types of leases involved
? Business reasons for, and importance of leasing activities
? Other significant liabilities disclosed for contingencies, warranties or commitments and their importance
Things to consider: Description of debts, Debt Percentage, Operating leases vs Capital leases, Present Value of bonds and leases, etc.
Link for Munro 10K:
Link for Tenneco 10K: