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Employment Lawyer and Labor Attorney Alaine Williams Attends Distribution of Back-Pay to Former St. Catherine Hospital Employees

December 17, 2013

Former Saint Catherine hospital employees get early Christmas gifts (

By John E. Usalis

Christmas came about a week early for 84 former employees of Saint Catherine Medical Center on Monday afternoon with each receiving 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 members 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 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. This doesn't happen just by one person. People did the right thing. Things don't happen unless you're involved, and that's what unions are about. They protect the worker," Spieles 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.

Fox began the short program, explaining the situation to the former employees.

"This journey that we've been on together is almost two years old," Fox said. "It's almost two years since the hospital did what it did to you, which is probably the worst treatment of loyal, dedicated employees that I've witnessed in my career representing employees. During some of our early meetings we made the commitment to you as your union to get you everything that we could possibly get for you, because we believed you deserved it. I am happy and proud to say that we've accomplished that goal."

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. "I think it's a wonderful time of the year for this."

After Spieles spoke briefly, Williams explained the process that led to obtaining the $400,000.

"We believe that the closing of Saint Catherine's, as unceremonious as it was with literally no notice at all, was a violation of the WARN Act," Williams said. "We filed a WARN Act claim as part of the bankruptcy. When we originally filed, it was unclear on how we were going to do on this because it didn't seem there were any assets in the estate. We were blessed with a trustee (Schwab) who clearly believed in the people who worked there and wanted to make sure there were wages put in their pockets before anybody else collected. We also filed a wage act claim for you because when they closed the doors, virtually all of you were owed wages from the payroll prior to the closing."

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. After the presentations, Fox said the checks ranged from $2,000 to $7,000.

The first person called was Tracy Anderson, Pottsville, who was a laboratory assistant and now works for AFLAC. She accepted the check with a broad smile and went back to her table.

"I really didn't think we would get it," Anderson told The Republican Herald. "Back in March, I didn't think we'd get our paychecks. I thought that when the hospital closed, that would be the end. It was heartbreaking because we're all like family here. A lot of people need the money now, especially so close to Christmas. It's a happy moment."

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