THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, October 31, 1995 TAG: 9510310315
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Medium: 61 lines
Shipyard workers who were not paid for their last week of work when struggling Jonathan Corp. closed in June got their first positive news Monday when a federal judge ordered the shipyard to put $300,000 in an escrow account.
The action does not mean the court will ultimately rule for the laborers, but it keeps the door open for payment.
U.S. District Court Judge Rebecca Beach Smith issued a temporary restraining order for the $300,000, and called for an expanded hearing on the issue within 10 days. Smith said society's ``public interest is extremely high'' that the shipyard workers get paid for the hours they worked during the last week before they lost their jobs.
``We can't keep confidence in the work force if employers are going to close their doors and not pay employees,'' Smith said.
The question is which of Jonathan Corp.'s creditors get first crack at the money raised at last week's shipyard auction.
Jonathan emerged from bankruptcy in March but closed when it couldn't get enough work to make its debt payments to NationsBank, which last week auctioned off the machinery and property at the Jonathan yard on the Elizabeth River in Norfolk. The amount of money raised in the auction was not publicly disclosed.
A.W. VanderMeer Jr., Jonathan's attorney, argued that the shipyard has turned all of its assets over to NationsBank and has no money to pay the workers.
Smith said a hearing to consider a temporary restraining order to stop the auction last week was postponed after the defense attorneys ``couldn't make court dates last week.
``For you to now come into this court and say, `Oh, but judge, the sale's now over with, we don't have any money,'. . . that's playing cat and mouse,'' Smith told Jonathan's attorneys.
She later suggested that, since Jonathan didn't pay its workers first, it relinquished assets to NationsBank that really belonged to the former employees.
The workers' attorney, Thomas F. Hennessy, said Jonathan failed to heed the Workers Adjustment and Retraining Notification Act (WARN) when it didn't tell its employees it was about to close.
The WARN Act requires an employer to give 60 workdays' notice of a shutdown, so Hennessy is seeking not only the one-week paychecks the workers didn't receive but also pay for the 12 weeks' notice the workers were not given.
In total, Hennessy asked for compensation of $255,360 for 57 Jonathan workers who filed claims for unpaid wages with the court. More than 250 workers lost their jobs when Norfolk-based Jonathan closed in June.
Portsmouth resident Steve Summers, one of the former shipyard workers named in the case, was encouraged by Monday's legal maneuverings. ``I tell you, it's the first thing that's happened so far,'' Summers said. ``The last thing I heard from Jonathan was Friday, the last day of work.'' by CNB