Former Saint Catherine hospital employees get early Christmas gifts
FOUNTAIN SPRINGS - Christmas came about a week early for 84 former employees of Saint Catherine Medical Center on Monday afternoon when each received a 60-day severance check.
The distribution of $400,000 in checks was held at Groody's Catering Hall in Ashland with some hoopla and celebration, especially since many believed they would never see the money. The employees are member of Local 2482 of the American Federation of State, County and Municipal Employees union.
Attending the presentation were Michael Fox, director of District Council 89 AFSCME Council 13, and Alaine Williams, senior partner with Willig, Williams and Davidson, Philadelphia, which provides legal services to the AFSCME union.
The payout to the former employees represented the money owed by the hospital through the WARN Act. According to the U.S. Department of Labor website, the Worker Adjustment and Retraining Notification Act protects workers, their families and communities by requiring most employers with 100 or more employees to provide notification 60 calendar days in advance of plant closings and mass layoffs.
The hospital closed without warning in April 2012 after financial and medical deficiencies and violations of state and federal laws, leaving about 150 employees out of work.
Since the employees were not given proper notice of 60 days of the possibility that the facility would close, they were entitled to salary compensation for those two months.
Welcoming the former employees was Local 2482 President Barry Spieles, Ashland, a former employee who worked in the maintenance department. His smile and cheerful demeanor showed he was in the best of spirits.
"This is a fantastic day," Spieles said. "Everybody had their doubts, but I didn't because being a union president and being involved and I knew what was taking place. I was involved with attorney (William) Schwab."
Schwab, Lehighton, is bankruptcy trustee for the medical center.
"I knew this was taking place because AFSCME stands behind their employees, and it was AFSCME and the union lawyers, Michael Fox, attorney Schwab and his whole office who made this happen," he said. "This is a blessing. Two month salary right before Christmas. However, the building is empty. That's a shame."
Spieles works for Schwab on a part-time basis to maintain the hospital building as needed.
Earlier this year, Fox said that the union was able to get the pay that was owed to employees by the medical center, with almost $200,000 distributed on March 28.
"I'm so happy that the lawyers were able to get this negotiated with the bankruptcy trustee before Christmas," Fox said.
Williams explained that calculations were made on the damages to everyone in the bargaining unit through the WARN Act, using the employee salaries of the two weeks before the hospital closure and coming up with the averages. Since some employees were over the $11,725 salary limit during those two months on what could be paid, a compromise had to be worked out.
"The WARN Act claim was $468,000, but if you offset that number, that took us to $433,000, which was the most I could collect on the WARN Act claim as a wage priority," Williams said. "To be able to get you paid now, we filed in the bankruptcy for Saint Catherine's, but we also filed in Bob Lane's personal bankruptcy in Wyoming."
That announcement led to applause from the union members. Robert M. Lane had purchased the hospital in 2006 through Saint Catherine Hospital of Pennsylvania LLC.
"In the Wyoming claim, we were able to get $300,000 from the trustees, and we got another $100,000 out of Capital Blue Cross that it owed to the hospital," Williams said. "So, we came up with the $400,000 to make these payments. Essentially we got 92 cents on the dollar, so we feel pretty good about that."
Williams explained that payments made on Monday were the full amounts with no taxes taken out. She said everyone will get a 1099 form in January in order to declare the payment for income tax purposes.
Former employees were called individually in alphabetical order to accept their checks from Fox and Williams. Each person came to the front of the room, many with broad smiles as they accepted their check. Fox said the checks ranged from $2,000 to $7,000.