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Ex-workers seek cash after plant closing

Rochester Business Journal
November 30, 2012

Former employees of Badger Technologies Inc. say the firm's former private-equity owner, Delta Point Capital Management LLC, owes two months' pay, accumulated holiday and vacation pay and two months of 401(k) plan contributions to each of the roughly100 people the company abruptly fired last August.
 
A class-action lawsuit filed last week in U.S. District Court in Rochester maintains that Delta Point owes its ex-workers because it failed to comply with plant-closing provisions of the federal Worker Adjustment and Retraining Notification Act. That 1988 law, known as the WARN Act, requires some employers to notify workers of upcoming mass layoffs at least 60 calendar days before shutting down a facility.
 
Former Badger Technologies workers Joe Knapp and Chad Notebaert are lead plaintiffs. They and some 93 others should have received WARN Act payments, the Nov. 21 court complaint asserts.
 
Badger Technologies was an Ontario County contract electronics manufacturer. After its lender sold its assets last summer, the former Badger Technologies Inc. operation was almost simultaneously revived in September under new ownership and a similar name as the separately incorporated Badger Technologies Division Inc.
 
State records show that Badger Technologies Inc. filed a WARN Act statement with the state Department of Labor before it terminated its workers but appeared to fall far short of the act's 60-day notice requirement. The Aug. 10 filing said the company planned to lay off 95 workers three days later on Aug. 13 and planned to close its Farmington plant by Aug. 26.
 
The class action does not target the company's new owner, TCS Industries Inc. of Rochester, which reportedly hired new top management and rehired 60 to 90 of the 97 workers identified as current or potential plaintiffs in the suit.
 
Law firms representing the plaintiffs are New York City-based Lankenau & Miller LLP, a nationally practicing specialist in WARN Act cases, and the Gardner Firm, an Atlanta-based firm that concentrates in labor law and class actions and frequently works with Lankenau & Miller.
 
Court papers identify the two firms as cooperating counsel for the NLG Maurice and Jane Sugar Law Center for Economic and Social Justice. The center is a Detroit-based non-profit affiliated with the National Lawyers Guild, an association of politically progressive attorneys that traces its roots to Depression-era support for unions and New Deal programs.
 
Mary Fangio of Whitelaw & Fangio in Syracuse signed the complaint as local counsel. She referred questions to Lankenau & Miller partner Stuart Miller, who declined to comment.
 
Delta Point directly controlled Badger Technologies Inc., its wholly owned subsidiary, and ordered the contract manufacturing firm's closure, the court complaint asserts.
 
"Although the plaintiffs and the other similarly situated former employees were nominally employed by Badger (Technologies Inc.), Delta owned and exercised de facto control over Badger and ordered the mass layoffs," the complaint states. Sitting on the Badger Technologies Inc. board and "acting in accordance with Delta's interests" were two Delta Point managing directors, Thomas Cimino and Kevin Halpin.
 
As the firm's sole owner and operator, Delta Point was legally bound to comply with the WARN Act, the complaint states. Provisions that give financially faltering companies and firms hit by unforeseeable business circumstances an exemption from the advance notice requirement do not apply to Badger Technologies Inc. because when its workers got pink slips last August, "Delta, as a single employer, had sufficient assets to allow the facility to remain open after providing 60 days' notice," the lawsuit asserts.
 
Delta Point's Cimino and Halpin did not respond to requests for comment.
 
Badger, which then employed 115 people, was growing and adding jobs, the firm's former CEO, Togo DeBellis, told the Rochester Business Journal last December.
 
In mid-2011, the Ontario County firm had recently increased its manufacturing space, adding 18,000 square feet to its Farmington facility. The expansion and equipment upgrades over the previous two years had cost the firm $5 million, DeBellis said.
 
Nine months later, Badger Technologies Inc. chief financial officer Jeff Keough warned Farmington supervisor Ted Fafinski in an Aug. 10 letter that the firm faced an imminent shutdown. Badger had struck out in attempts to refinance debt, and its main lender, M&T Bank Corp., planned to sell off the firm's assets, Keough said.
 
Badger started to lay off staffers the next day, but damage was soon capped with the lender's quick sale of the business to TCS, Fafinski said this week.
 
How many of the firm's staff have since gone back to work is not clear.
 
TCS owner Manoj Shekar did not respond to a request for comment.
 
Fafinski said he believes the Farmington firm's staffing levels are close to what they were before the August layoffs. Shekar has not returned his calls, Fafinski said, and his only knowledge of the firm came through press reports.
 
A 10-year property-tax break on the Farmington firm's 18,000-square-foot addition is tied to a promise to retain and add staff, said Michael Manikowski, executive director of the Ontario County Office of Economic Development and Industrial Development Agency. Manikowski said he also has been unable to contact Shekar but the payment-in-lieu-of-taxes agreement requires an account of Badger's current staffing by the end of the year.
 
The PILOT deal was not signed with Badger but with the building's owner, Buckingham Properties LLC.
 
After the Badger assets changed hands, his firm signed a new lease with Shekar's Badger Technologies Division, said Buckingham CEO Laurence Glazer.
 
Glazer said he was not sure of the firm's current employment but said he believes Shekar, whom he described as working hard to put the previously struggling Badger on sounder footing, has rehired many if not all employees of Badger Technologies Inc.

11/30/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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