A Pattern of Intentional Non-Payment
Ex-employees were severely affected by the reported dubious business practices of Miami's Global Training Solutions, but ex-contract employees and vendors were no less immune.
of this series
detailed the reported dubious business practices of
the Miami, Florida-based computer training company Global Training Solutions
(GTS). Ex-contract employees as well as ex-full time employees described
what they believe is improper and, possibly, illegal behavior by their
former employer. But they aren't the only ones allegedly mistreated.
Vendors often fared no better than MCTs or other employees, according
to Scott Lehman, former director of operations for the Jacksonville and
Atlanta offices. "It got to the point with vendors where we wouldn't pay
the bills. We were four months behind to the coffee person. [In one office]
they rented plants, and the [vendor] actually came in one time and took
the plants, because [GTS] wasn't paying the bills."
Former Regional Director of Finance and Administration Tanya Prince said
it was part of a pattern of intentional non-payment by GTS. "We'd have
weekly accounts-payable meetings with the CFO and southern regional vice-president.
Basically, we were told that we were only going to pay something if there
was a threat of having something shut off or disconnected. Our balances
were maxing out with various creditors and office supply companies. When
service would stop, we'd move to another company."
Trainers and other employees don't have the option of stopping service,
so they've been taking GTS to court. When that happens, the company normally
doesn't show up to defend itself. MCT Charles Gardner's tale is typical.
In an e-mail sent Feb. 12, he explained, "I too have contracts that have
never been paid for training [from May and June of 2002]. There were three
separate engagements, so I filed three small claims suits against them
in Hillsborough County. Those three suits were dragged out as they had
to be corrected and subsequently recalled. Two weeks ago, we had a court-mandated
mediation meeting, which they, of course, did not attend. In any case,
we'll be getting in line behind everyone else with a judgment, [and] probably
kiss our $6,700 goodbye in the end."
on this article:
1: Outraged Ex-Employees of Training Company
Allege Theft, Fraud
Others can't take even that step. Alma Ireta said she worked for GTS
for 14 months before being laid off Jan. 31. She's furious with her former
employers. "They are so dirty, it's incredible they are loose," Ireta
said in an e-mail. "I have not been paid for five weeks, and no W-2s.
I did contact an attorney, who is asking for money up front. I wish I
had the money to proceed. However, I'm broke and can't afford to dish
out $500. GTS owes me over $2,000."
In some cases, trainers made mistakes of their own, which they regret.
Michael Bell, for instance, said he taught a three-day IIS 5.0 class for
GTS. "I sent in a contract via fax as I was out of town at the time. I
never did receive a signed contract back (bad on my part, I know) and
subsequently have never been paid," Bell said in an e-mail.
MCP Magazine has tried repeatedly, via phone and e-mail, to contact
GTS owner Eric A. Schaer and his lawyer, Kirk DeLeon. The only response
was DeLeon's e-mail statement that he'd passed e-mails seeking comment
on to Schaer.
Allen Hicks, General Manager of GTS' Northern Region, claimed in an e-mail
to MCP Magazine that there were inaccuracies in the first story, which
ran in the November 2002 issue, and that GTS' side of the story was ignored.
Hicks was sent two e-mails asking for a response to the allegations made
in the story. He didn't reply. Hicks, eventually reached at the Orlando
office, said he didn't return e-mails seeking comment because "it was
a waste of my time." He said that GTS is doing fine, and chalked up negative
comments about the company to disgruntled ex-employees. "Any time a company
goes through downsizing and people are let go, there's going to be hurt
feelings." Asked to respond to the substance of the accusations against
Schaer and GTS, Hicks declined.
A spokesperson for the Florida Office of Consumer Services confirmed
that they'd received a complaint last year from someone claiming that
GTS failed to pay them for services. GTS didn't respond to the office's
request for more information and the case was closed unsatisfactorily.
The spokesperson said the office has no jurisdiction to act if a company
The U.S. Department of Labor normally handles situations involving 401(k)
retirement savings plans. The bureau within the DOL responsible for 401(k)
plans is the Employee Benefits Security Administration (EBSA). Spokesperson
Sharon Morrissey said the department doesn't confirm or deny whether an
investigation into a particular company is occurring. She explained that
if an investigation yields credible evidence of improper handling of funds,
the DOL can sue in civil court for lesser offenses like failing to forward
pension funds in a timely manner. For more serious lawbreaking, "if we
find real malfeasance, real corporate fraud," Morrissey said, criminal
charges could be filed.
While not making a judgment on GTS, Morrissey did speak in general terms
about deducting money from a 401(k) plan and not depositing it into the
proper fund, or not depositing it at all. "Well, it is an illegal act."
MCP Magazine has learned that the EBSA is in the midst of investigating
Schaer and GTS about its business practices, in particular the 401(k)
issue. One high-level management employee from GTS' Central Florida region
said he'd been questioned by an investigator from the DOL about the company.
He mentioned that the investigator had expressed frustration about GTS
employees not showing up for scheduled meetings and documentation that
was supposed to be produced and never was.
As part of the investigation, Schaer has been subpoenaed by the DOL to
explain the 401(k) situation. The hearing date is March 14 at 10 a.m.
in Plantation, Florida. The subpoena, a copy of which was obtained by
MCP Magazine, states that Schaer has been called "to determine whether
any person has violated or is about to violate any provision of Title
I of ERISA (the Employee Retirement Income Security Act of 1974) or any
regulation or order...." The subpoena is dated Feb. 7, 2003.
The alleged 401(k) issues, combined with problems with W-2 forms being
late and inaccurate, has turned another ex-employee against GTS. Blaine
Johnson worked for the company a total of one-and-a-half years, as director
of sales for the Tampa office.
"What do you call it when an employer takes thousands of dollars out
of your paycheck and does not deposit it as you directed?," he said in
an e-mail. "Pay stubs through the end of the year show the money coming
out, yet the 401(k) plan does not show a deposit since July .You
can't rob a liquor store on a Friday because you are short on cash, bring
the money back the following Tuesday and not go to jail. If I was short
on money and helped myself to $500 in petty cash, I would be arrested
for theft...What was done with the 401(k) fund is no different."
Johnson said that GTS eventually made good on the 401(k) money -- sort
of. The funds were never posted to the proper account, he said, but he
did receive a wire transfer for an amount about equal to the missing funds
in the second week of last month. But he added, "I still have approximately
$3,000 in outstanding expenses and vacation pay they committed to pay
upon our separation." Johnson said he said he hasn't seen that money,
nor does he expect to.
Next: What's Happening with Training Companies?
Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.