A federal court in Texas has awarded two black managers fired from Marshall, Texas-based TieTek LLC more than $325,000 in a racial discrimination suit after TieTek officials failed to defend themselves.
TieTek stopped production of composite railroad ties in September, and it is unclear whether the company will resume operations in 2010.
In January, the plaintiffs, Sharon Knight and Derrick Hayes, filed the lawsuit against TieTek, alleging discrimination after being fired from management positions with the company in which they were asked to train their replacements who are white before being let go.
The court finds that all the aversions and allegations contained in the original complaint have been admitted by the failure of TieTek LLC to defend the actions in direct controversion of two direct orders of the court to secure counsel, appear and defend the action, the final default judgment said.
Joe Dorman, general counsel and chief financial officer for TieTek's publicly traded holding company, North American Technologies Group Inc., said the company will be in a better position to comment after the holidays.
The story stands for itself the plaintiffs won default judgment, Dorman said in a Dec. 28 telephone interview.
Dorman said the future of the railroad-tie manufacturing business is uncertain.
Whether it continues to operate or not is not clear, he said. It will take evaluation and looking at what the market is and so forth.
Using a proprietary mix of recycled high density polyethylene, crumb rubber from used tires, fiberglass and minerals, TieTek was able to extrude 220,000 ties per year at its 200,000-square-foot plant in Marshall. The company also owns a 50,000-square-foot plant in Houston that produced about 100,000 ties annually.
Plastic ties are now commonplace in the rail industry, but still have several cost-related hurdles to overcome before becoming the industry standard.
Material and engineering costs make the plastic ties two to three times more expensive than wood ties.
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