MOUNT PLEASANT — Employees at Promotions Unlimited didn’t just lose their jobs last week when the company abruptly closed — some may have also lost their last paychecks in a widespread attempt to pull the money out of their bank accounts.
On Jan. 27, Promotions Unlimited, 7601 Durand Ave., discharged its last 48 employees after laying off about 30 others in the preceding several weeks. Employees say the company, a local distributor to independent pharmacies and in business for decades, did not pay them for their last week of work.
But the damage may have been even worse than that for some of the ex-workers.
An undated letter from company owner Lorraine Greenberg to the former employees, addressed to “Dear ex-employee,” informs the former employees of the permanent closing by Roosevelt Capital LLC, doing business as Promotions Unlimited.
Greenberg states that 77 employees lost their jobs and adds, “No severance will be provided in connection with the eliminations.”
Greenberg also writes that Paylocity, the payroll company Promotions was using, is “reversing direct deposits” of ex-employee paychecks.
Debra Krehbiel, who was the accounts payable supervisor at Promotions/Roosevelt, said Paylocity normally did payroll for Roosevelt on Wednesday, then got the money from the company on Thursday. She said she assumes Paylocity learned, on that Friday, that the money was not available from Roosevelt to cover the Jan. 27 paycheck deposits.
During the past couple of days, former Promotions employees have been working with their financial institutions to prevent those deposit reversals. For any reversal that may have succeeded, and if people worked until the last day, they would have no pay for their last three weeks at Promotions.
Krehbiel said she split her paychecks between two financial institutions. She was able to stop payment from her Chase Bank account and closed the other account.
Paylocity could not be reached for comment Thursday.
Michelle Humburg, one of those discharged on Jan. 27, was the sales and customer service lead at Promotions Unlimited and had worked there 14 years. She said she got Greenberg’s letter Wednesday and immediately contacted Educators Credit Union.
Humburg was able to move her money from checking to savings, thereby thwarting the deposit reversal. But she had to leave her checking account open because of a small pending charge with Redbox, and worried that there could be a reversal attempt that would put her into negative figures.
Humburg said so many fearful ex-Promotions employees contacted ECU about the attempted withdrawals that the credit union decided not to allow them.
“I think it’s shameless,” Humburg said about the treatment of employees by Roosevelt/Promotions. “It’s very shady and it’s shameful.
“They (had) some very dedicated and honest people that stood by them till the end,” she added. “And we knew it was a sinking ship.”
Humburg said employees were, by company policy, owed pay for vacation they had earned, in the case of termination. She lost three weeks of earned vacation, with no compensation, and a friend there lost four weeks.
Humburg also said money was withdrawn from the Jan. 13 and 27 paychecks for their 401(k) retirement contributions and medical and dental insurance — but that it had not gone to those places.
Deborah Mazzie, the company tracing specialist who worked there for 26 years until being laid off Jan. 13, said she learned Thursday morning that Roosevelt Capital or Paylocity was attempting to take a total of $954.72 from her and her partner Terry York’s combined checking and savings accounts.
Because the withdrawals were still pending, Mazzie and York were able to prevent them — at the cost of $60 in fees, Mazzie said. But she said she knows of at least two other ex-employees who did see their paycheck deposits taken back.
State Sen. Van Wanggaard’s office is looking into whether the move constitutes wage theft, Wanggaard’s chief of staff Scott Kelly said Thursday.
Kelly said workers can file a labor standards complaint with the state Department of Workforce Development as a first step to collect money lost.
In her letter, Greenberg blames the company’s former lender, Franklin Capital, for bringing down Promotions Unlimited, saying the closing was “due to a sudden and unexpected refusal by the company’s lender, Franklin Capital, to provide the company with access to necessary financing to continue operations.”
“What a joke. That’s baloney,” Humburg commented about the attempt to blame the lender.
Greenberg also attempts to paint Roosevelt as blameless by writing that “the circumstances prompting these actions were sudden, unexpected, profound, and beyond the company’s control.”
Greenberg could not be reached for comment on Thursday.
Employees did not view the end as unexpected. Like Humburg, Mazzie also said employees widely expected Promotions Unlimited to close within the next few months because vendors were not getting paid, except for the larger ones who required payment in advance.
And because some vendors had stopped supplying merchandise, toward the end Promotions Unlimited was only able to partially fill some orders from pharmacies, Mazzie said.
Wisconsin Circuit Court online records also suggest a company with financial troubles. Those records show one court action filed against Promotions Unlimited in January, six last year, none for 2014 or 2015 but about 70 court actions involving the company from 1996-2013.
At one time, Promotions Unlimited had as many as 339 employees, Mazzie said.
On Thursday, those laid off at the end, who had not already found other jobs, attended a “rapid response session” with Workforce Development Center personnel at the SC Johnson iMET Center, 2320 Renaissance Blvd., Sturtevant.
Participating in that meeting was Wes Gable, their union representative for Teamsters Local 200 which represented the warehouse workers. Greenberg’s letter to the ex-employees mentioned Gable as their representative but provided the wrong phone number for him.