Circle Family Healthcare Network’s financial woes saw the agency close its Humboldt Park facility, reduce its staff from 125 to roughly 80, and left many without paychecks.
Now one former employee is mulling over possible legal action to recoup the $11,000 in back wages owed by the Austin faith-based health center.
“I think that they should do due diligence in meeting their commitments to the staff…which is paying us for our services,” said Cordelia Miller-Muhammad, who worked for Circle for seven months before leaving the company the same day it filed for bankruptcy in February 2013.
The nonprofit listed assets of about $783,000 and more than $3 million in liabilities in its Feb. 8 petition to the U.S. Bankruptcy Court’s Northern District of Illinois in Chicago. As part of the bankruptcy case, Circle Family entered into a reorganization plan on July 23, 2013. That plan called for the agency to pay it creditors, including roughly $840,000 in back wages owed to more than 100 employees. The court-ordered plan went into effect on Oct. 25, 2013 and required Circle Family to begin paying its creditors on Jan. 1 of this year.
Miller-Muhammad’s husband, Thomas, said the agency failed to meet that provision. That, he said, “opens the floodgate for anybody who wants to go after them civilly.”
“I think all the bankruptcy did was give them more time to screw people around because nobody is getting paid,” Thomas Miller, who works as a paralegal, said. “It pisses me off a great deal that we have to go through this.”
Emails to Circle Family’s Director of Operations and Human Resource Phil Foust, as well as phone calls to interim CEO Christopher Jackson, seeking comment were not returned. A representative for the law office Golan & Christie, LLP, 70 W. Madison, which represents Circle Family also would not comment on the case. The agency’s bankruptcy case closed in March.
Miller-Muhammad was hired back in July 2012 as a clinical supervisor for its child and adolescent behavioral health program. During her interview she was informed that Circle Family has had problems meeting payroll in the past. But that didn’t concern Miller-Muhammad. She worked for another agency that faced similar problems and eventually closed.
“They did not break it down to how problematic it really was,” Miller-Muhammad said. “In the beginning I’m thinking like my other agency: money is gonna come through; it is just a matter of it getting here.”
An entire month went by before Miller-Muhammad got her first full paycheck.
Then it became sporadic afterwards — getting only one check in September and October and then a half a check in November of last year. Come December things were dire when she only got a check for $500. That’s when she started looking for a job.
“I just threw my hat in and I was like ‘I got to go,'” said Miller-Muhammad, who dipped into her savings to get by.
She, like many of the agency’s employees, thought money would come after Circle Family’s annual gala, where Miller-Muhammad said employees were expected to purchase tickets.
“…It didn’t,” she recalled, adding that matters seemed to worsen because there was hardly any communication from management about the situation.
“We didn’t know if the board knew what we were going through,” Miller-Muhammad said. “We were questioning, ‘did they even care’ because it was like there was no good communication from higher manager… We were, like, just in the dark.”
Now working as a counselor at Columbia College, Miller-Muhammad said she just wants what’s owed to her. But without legal representation advocating on the employees’ behalf, it’s unlikely they will see a dime of their back wages, says Robert Bruno, a labor and employment relations expert contacted by Austin Weekly News.
“The bankruptcy laws in the United States, particularly for non-unionized workers, really do leave these workers at a significant disadvantage and, therefore, they are pretty exposed,” said Bruno, a professor at University of Illinois at Champaign-Urbana.
All financial compensation, like back wages claims and benefits owed to workers, Bruno said, typical falls very low on the totem pole of who actually can make a claim on employers’ assets. Banks and vendors get paid first, Bruno said. Employees “bring up the rear,” he said, adding that, at best, they may get a portion of what’s owed them.
“Bringing them together in some way as a class [action suit]… and having some representation strikes me as something they should be doing,” Bruno said.
Miller-Muhammad thought she would get some reciprocity in re-filing her wage complaint with the Illinois Department of Labor. She originally filed a claim last October, one of 19 other wage complaints filed against Circle Family in 2013. Those claims, however, were dismissed since the company filed for bankruptcy and fell under the jurisdiction of the court, said Anjali Julka, IDOL’s communications manager.
Since then the department has received 12 complaints in 2014 against the company. Since these complaints involve wages earned after the company filed for bankruptcy, they are currently being investigated by the department, Julka said.