Nov 10, 2008 7:46 pm US/Pacific
Did Mervyn's Follow California Labor Laws?
(CBS 5)
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Mervyn's Department Store.
When a company such as Mervyn's goes out of business, California law says they must give 2 months notice ahead of any layoffs, not just to the workers, but to people in the community as well. CBS 5 Investigates is looking into whether Mervyns disregarded state labor laws.
Going out of business sales at Mervyn's stores began last Friday. The company formally filed for Chapter 11 Bankruptcy in July and began laying off workers in October. But were those workers, more than 600 of them, given the proper notice that is required under California labor law?
"We sent a letter to Mervyns on October 16th," said Angela Bradstreet, California's Labor Commissioner. Bradstreet is the person responsible for making sure companies comply with what is called the WARN Act, the Worker Adjustment and Retraining Notification requirements, designed to make sure workers get plenty of warning of a mass layoff.
"So that at least they have a chance at retraining and at least they got 60 days to try and find another job," she told us. So how did Mervyn's respond? "We received no response to that letter," Bradstreet told CBS 5 Investigates.
So last week the Department of Labor sent yet another letter, this time saying it has begun "an investigation" and telling Mervyn's to provide detailed information about the layoffs, and what wages actually were paid to workers.
"I feel for these workers. I mean I feel for them. I know these are tough economic times which is affecting both businesses and workers," Bradstreet said. "But my goodness, you know, some of these workers have been there for decades."
And Bradstreet says cases of workers identified by CBS 5 Investigates also may indicate a problem. Employees such as Jackie Chakoff who were laid off abruptly and then told they may not receive weeks of accrued vacation pay because of the bankruptcy proceedings. "To be thrown out on the streets with no accrued vacation, accrued vacation is wages under the law."
Which is why Bradstreet said for Mervyn's, the clock is ticking, for them to tell the department what they have or have not done.
"If we don't get a satisfactory response, and we do not get the records that I am entitled to as Labor Commissioner, then we would be issuing a subpoena," Bradstreet said.
If Mervyns is found to be in violation, the company could be fined $500 dollars a day, up to $30,000 dollars. And if the labor department takes legal action Bradstreet said the judgment, if there is one, would have priority status in bankruptcy proceedings.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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