U.S. District Court Denies Cenveo Request for Injunction Against Diversapack
NEW YORK—Oct. 2—Diversapack LLC, a supplier to the flexible packaging industry, today announced that the U.S. District Court for the Southern District of New York has denied a preliminary injunction sought by Cenveo Corp. (NYSE: CVO) against Diversapack LLC and certain officers and minority shareholders. According to Diversapack, Cenveo sought the injunction in an effort to deny workers at its envelop manufacturing plant in Altoona, PA the opportunity to seek employment at Diversapack's new manufacturing facility in Tyrone, PA.
In the Court's decision, Judge Shira Scheindlin found that Cenveo and Diversapack are not competitors and that Cenveo had not proved that it was likely to succeed on the merits of its lawsuit. In her opinion, Judge Scheindlin said, "An injunction would impose an undue hardship upon current Cenveo employees." She said further, "Cenveo also provides no support for its claim that the reduction in productivity is a direct result of the loss of these fourteen employees as opposed to the loss of the more than one hundred employees Cenveo has laid off at the same plant or the more than one thousand employees Cenveo has laid off nationwide."
Woodrow A. Hall, Chairman and President of Diversapack said, "We are delighted by today's Court ruling, which supports our belief that Cenveo's claims are baseless."
Cenveo's action sought to limit hiring in Diversapack's plant in Blair County Pennsylvania, which was recently lauded by Commonwealth Governor Ed Rendell for its "great growth potential."
Hall said, "We are especially pleased to bring new jobs and opportunities to workers in the flexible packaging industry. We know that fair treatment of employees is the only way to realize long-term success.
"We were outraged that at a time when it was slashing jobs and threatening to close the plant, Cenveo, which is not even a competitor of ours, sought to prevent its employees from seeking better jobs elsewhere, while retaining the right to fire them at any time. We even understand that Cenveo went so far as to urge Governor Rendell not to embrace the stimulus package designed to create over a hundred manufacturing jobs at Diversapack's new plant in Western Pennsylvania.
"This denial of a preliminary injunction is a resounding strike against the coercive tactics employed by Cenveo. Bullying workers is no way to build a business."
A number of former Cenveo employees submitted declarations for the hearing attesting to Cenveo's disrespectful practices at the Altoona plant, including:
• An audio-visual presentation shown by Human Resources to the entire workforce that showed a hollowed-out factory with broken windows - workers were told that if they did not maintain sufficient production, within six months that would be their plant.
• The firing of an entire department at the plant accomplished by calling out the names of everyone in that department over the public address system so the entire plant could hear. The employees were unceremoniously dismissed, one by one.
• Bringing in temps and unskilled short-term low wage workers, without benefits, to replace full-time employees - previously fired employees were told that if they wanted to come back to the company they would have to become temps.
• The introduction of "dark days" where employees were told not to come to work - and thus not paid - due to poor plant management of work flow.
"We have all experienced the economic downturn," continued Mr. Hall. "What we know is that the best way to a return to prosperity is proper treatment of employees."
About Diversapack LLC
Diversapack LLC, headquartered in Atlanta, Georgia, provides film and packaging products and solutions for Fortune 500 companies in the food and beverages, health and beauty, consumer products, and industrial and military markets through its nine manufacturing locations in the United States. The company is the only Major Minority Supplier to the flexible packaging industry. Diversapack recently opened a manufacturing facility in Blair County Pennsylvania, which will create 150 jobs in the next three years, and has been lauded by Governor Ed Rendell for job creation and capital investment in the commonwealth and in the county during difficult times. Among the ownership group of Diversapack is a former U.S. Ambassador to the United Nations and Atlanta Mayor, Andrew Young.