published Tuesday, November 23rd, 2010

U.S. Labor Department probing wage dispute

  • photo
    Staff Photo by Dan Henry/Chattanooga Times Free Press The Town and Country Inn is located at 2000 E.23rd St. in Chattanooga.

The U.S. Department of Labor is investigating complaints filed against Town & Country Inn & Restaurant by two former employees who claim the company is not paying workers at least minimum wage, federal investigators said.

Willie Allen filed the most recent complaint this week, alleging that Town & Country laid off about 14 employees, including him, on Nov. 12, then asked them to sign papers stating that, instead of being Town & Country employees, they are volunteers in a residency program with the Town & Country Foundation.

Until then, Allen said he had been receiving room and board plus minimum wage pay of $7.25 an hour. Under the Town & Country Foundation, he was told that he would receive only room and board, Allen said.

"That's slave labor," he said. "I'm exposing this nonsense that they are doing."

Town & Country co-owner David Bernstein said he wasn't aware of a federal investigation into the business and could not comment on it.

He said Town & Country officials recently established a nonprofit association to provide housing and assistance for families in need.

"We've started a foundation and [the former employees have] been invited to be residents there," said Bernstein. "The understanding is that they would be given some chores to do."

Department of Labor Investigator Hubert Bend Jr. said Allen's information will be added to an ongoing investigation into a minimum-wage complaint filed against Town & Country about six months ago. Bend referred further questions to the public affairs section of the Labor Department.

Town & Country Inn is a 164-room motel on East 23rd Street. About 120 of the rooms are functional, while the others are used for offices and other administrative needs, officials said.

Bernstein said the business always has helped house homeless people, and some local shelters contact the inn when they have families they'd like to keep together.

Kimberly George, the Salvation Army's community relations director, acknowledged that the agency sometimes refers homeless people to Town & Country.

Bernstein said business has been so slow at the restaurant and inn, he was using his own money to make payroll. Starting a nonprofit foundation was a way to keep the business operating and provide shelter for people who might be homeless, he said.

"I was being hit with all kinds of taxes," Bernstein said. "The place wasn't making enough to support the payroll. And the [homeless] folks who were there, I talked to them and they didn't want it to shut down. They didn't want to be put out.

"So after their consent, at least 90 percent of them were willing to work for the foundation in order to stay there, understanding that, if there was any money after paying the bills, that they would be offered grants."

The foundation, started about 10 days ago, is operated by a five-member board of directors that includes some of the business' former employees, Bernstein said. He declined to name the board chairman, but said he wasn't an owner of the business.

The foundation receives funding from the Town & Country Inn & Restaurant and Bourbon Street Music Bar, but it will seek funding available to other nonprofits, as well, Bernstein said.

So far the business hasn't received any grants, so it is necessary for the live-in residents to help with the upkeep of the restaurant and hotel, Bernstein said.Tennessee is one of five states with no minimum-wage law, according to the U.S. Department of Labor website. As a result, as long as two parties agree to a wage, it's not illegal to pay less than the federal minimum, said Jeff Hentschel, state communications director for the Tennessee Department of Labor and Workforce Development.

Even so, wage complaints must have some degree of credibility before they are investigated, said Hentschel.

Of the 40,000 complaints the state received in the past year, only 530 wage complaints were investigated, Hentschel said.

Town & Country is in a very unusual situation, said Allen McCallie, a corporate law attorney with Miller & Martin.

"To one day be a commercial restaurant and the next day say that you are a nonprofit providing room and board for homeless folks and nothing else changes, that's a very difficult transition," McCallie said.

The Internal Revenue Service is the reviewing body for applications for tax-exempt nonprofit status. McCallie said one question on the IRS form asks whether the new entity is the successor of an old entity and, if it is, the business must explain that.

Meanwhile, Allen said Town & Country officials took action yesterday to try to remove him from their property.

He said officers with the Hamilton County Sheriff's Office came to his hotel room to escort him off the property. However, he said the officers left after he explained the matter.

"I said they're doing this because I went to the newspaper to expose their illegal activity here," said Allen. "(The officer) called the sheriff's department and they told him that was a civil matter and that I wasn't causing any trouble so there was no reason to have me escorted off the property and they drove off."

about Yolanda Putman...

Yolanda Putman has been a reporter at the Times Free Press for 11 years. She covers housing and previously covered education and crime. Yolanda is a Chattanooga native who has a master’s degree in communication from the University of Tennessee and a bachelor’s degree in journalism from Alabama State University. She previously worked at the Lima (Ohio) News. She enjoys running, reading and writing and is the mother of one son, Tyreese. She has also ...

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ceeweed said...

As more people slip into poverty and become homeless, we are going to need more good people to step forward. Donations are down. Food banks stocks are depleted. Dire straits may befall entire families that render them homeless... Doing some chores for room and board does not seem unreasonable. It seems Mr.Bernstein is trying to help the needy people of Chattanooga...Years ago, I worked in a restaurant...We would give away food at closing time to people who were hungry. Our policy changed when the owner learned of a lawsuit against another restaurant owner by a person who received free food from his business. The plaintiff claimed he became ill after eating food donated to a shelter...The fear of litigation has stymied the good intentions of many charitable people. The poor will always be with us (as well as their lawyers).

November 23, 2010 at 7:44 a.m.
GARRS said...

I complained to the dol that a major carpet company was cheating SOME employees out of double time sundays, but no one did anything or would even file the report.

All other departments in the company got paid doubletime if they worked the seventh day, but in order to beat US out, they would not schedule sunday, but meet you at the exit and tell each person to come in, it was an unscheduled last minute thing.

Other departments when their people worked 7 days, they would turn in for the double time at the last minute for their people

This company still probably owes me close to 10 grand in cheated wages.

November 23, 2010 at 10:27 a.m.
GARRS said...

Of the 40,000 complaints the state received in the past year, only 530 wage complaints were investigated, Hentschel said.

This is why we need to fire the individuals who are at the DOL, and replace them with people that will act against claims.

Only 1.3 % were properly handeled by the dol, and that is unacceptable.

November 23, 2010 at 10:42 a.m.
TravelinThru said...

Doing a few chores for free room and board seems to be a good deal, when the alternative is being on the street.

November 23, 2010 at 12:13 p.m.
wallace said...

Garrs, TN DOL cannot investigate federal law, such as min. wage, as there is no violation of state law. The article suggests that an employee can agree to not be paid min. wage, which is misleading, as it is not contrary to Tn labor law but is a violation for an employer covered by Fed. labor law to not pay min. wage or overtime to most hourly employees unless specifically exempted. As TN has very weak labor laws, many complaints to the state are referred to Fed. DOL, who appears to have opened a case here. Also, there are no Fed labor laws requiring double time for Sunday work or that an employer provide these hours. That's an employer's option.

November 23, 2010 at 12:41 p.m.
hmgreen said...

Let me clarify this subject as someone who stayed at the Town and Country Inn. My husband, daughter and I found ourselves homeless and were sponsored by the Salvation Army as well as a few other churches to stay at TCI. After a few weeks of looking for jobs my husband began working for security at the motel. In the beginning it was understood that he would work 30 hours in exchange for our room. Do the math and it does not add up to the so called $140 a week even then. Also, the room was infested with roaches and black mold and could not be rented out to the public. . We took it with a grain of salt because at least we were off the streets. The plan was for me to work so we could save money. I unexpectedly found out I was pregnant at the worst possible time. I was put on bed rest from the beginning. At this time my husband was working 40+ hours, as well as several other workers, without being paid for the extra work. My daughter broke her foot and needed a brace and my husband had to do over 8 hours of work for $42. Any time a rumor would get out about the labor board they would come up with some sort of agreement. If they refused to sign it, they would be 'laid off' and given an hour to leave the premises. Those with families were too scared to leave. If you do not get paid you can not save up the money required to leave. In May I was put into the hospital because of severe complications with my pregnancy. I was 23 weeks pregnant. On Friday June 11 the Labor Board had a meeting with management and informed them that they are to start paying the employees. Monday, June 14 my husband called to tell me that many people were laid off, including him. And that he has until Monday to pay rent. I went hysterical. I had just gone to my daily ultrasound and all was as well as could be expected. Within an hour of hearing the news I was being prepared for emergency c section. My baby was born at 27 weeks and put into the NICU. She was not expected to live. After a heart surgery and 3 brain surgeries and 3 months in the NICU she is home. She has hydrocephalus from the grade 4 brain bleed. She is now a special needs child and I spend my days with her. She can not go to day care due to her health issues and brain shunt. I lay some of the blame on them and yes I am still bitter. The owners and management had the opportunity to do great good for the community. They could have allowed homeless to work there a few hours to pay room while looking for employment or go to school. They chose not to. They think that when one person leaves there are plenty of homeless people desperate enough to put up with it. These people are scum of the Earth. Bernstein would get a jacuzzi room for his dog (literally)instead of giving a room to a homeless person. He is selfish and God will bring his judgment down on him.

November 23, 2010 at 12:42 p.m.
hmgreen said...

There are many things the community needs to be aware of before singing praises to these people. They are nothing but scammers. I would like information on who to contact from the labor board. I happen to have a few statements from the management stating how many supposed hours my husband worked, the value of the room and the fact that he did not get paid. I also happen to have the schedules from the week these statements were written.

November 23, 2010 at 12:44 p.m.
hawks said...

you can not expect people to work for free

November 24, 2010 at 4:58 p.m.
fltn941 said...

When the police was call on mr. allen it wasn't what he said it because he called the paper about the motel, it was because he owns 4 weeks on his rent, and now is going on 6 weeks. That why he was going to be removed him, and it wasn't the Hamilton County Sheriff's, it was the Chattanooga PD. so he needs to get his fax right.

November 30, 2010 at 4:23 p.m.
hmgreen said...

For the length of time everyone put in for free labor their rooms should be paid up for a really long time. Especially considering most of the employee rooms are not inhabitable by the public and are not worth what they were being charged. And BTW it is FACTS not FAX but then there were so many things wrong with that comment I would have to completely retype it myself for anyone to be able to understand it.

November 30, 2010 at 8:52 p.m.
klove1 said...

This motel is and has been an eye-sore for quite some time. And after working there I understand why. The management and owners have no idea of how to run a business. The reason for turning the motel into a Non-Profit organization is because there are gross misappropriations of funds. You never know from day to day if the utlities will be on. And for the most part that is due to the managements refusal to make guest pay their rent. And as for the employees that stay on the property the ridiculous part is that they are charged more for their rooms then the individuals that have made the motel their permanant residence. Now as far as the homeless individuals that are on the property they were not brought by the Town and Country Inn. They were brought in through a Non-Profit organization that was already assisting people on the property.

December 4, 2010 at 7:53 p.m.
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