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Oct. 3--ALBUQUERQUE, N.M.--Former Furrs Supermarkets Inc. employees are spreading word to one another to attend a court hearing Thursday to protest that they have not received promised severance pay. In a separate action, union officials filed a motion Sept. 21 asking the court to direct Furrs to make the payments.
The employees' message to the court is "no corporate bonuses until Furrs employees get their severance," said Sharon Holt, who worked for the company for 16 years. The workers plan to rally at U.S. Bankruptcy Court on Thursday to express their frustration that workers have not been paid, the union said, while corporate executives received bonuses. Most recently, on Sept. 18, bankruptcy court Judge James Starzynski approved giving Furrs board chairman George Golleher and vice chairman Greg Mays a total of $750,000. They are expected to get another $750,000 bonus.
Golleher and Mays already are paid salaries of $25,000 per month and a signing bonus of $125,000 each since stepping into their roles on a contract basis in March.
All of the Furrs stores closed by the end of August. The company had about 5,000 employees in New Mexico and West Texas when it filed for bankruptcy.
The United Food and Commercial Workers, a union representing about 3,000 former Furrs workers, filed a motion on Sept. 21 urging the court to require Furrs to pay severance claims, pension contributions, unpaid wages, vacation pay and health plan contributions owed to workers. The union did not file the motion sooner because workers in the first stores that closed received their full severance pay, said Diane Kimberle, president of the union's Local 1564.
Some workers received partial payments until Aug. 31, she said, while workers in the stores that closed in August received nothing.
"We were told -- just as employees were told -- that they were going to pay severance," she said. "We didn't think severance would become the issue it has become." In the union's motion, attorney Michael Four said, "Furrs continued to reassure employees, even as it was shutting down the last of its stores in August, that it would pay them all the severance pay they were owed if they continued working as long as they were needed. "True to its word, it continued to pay employees the severance benefits it had promised them. ... That changed when Furrs completed the shutdown of all of its stores. Furrs now refuses to pay any of the severance benefits it still owes its laid-off employees," Four said.
The union did not specify the amount owed employees. However, Furrs documents filed with the court in March showed estimated severance payments to union workers would total $13.7"million.
Both union and non-union workers were promised severance after the company filed for Chapter 11 bankruptcy court protection Feb. 8. Letters from Furrs president Steve Mortensen said employees were entitled to severance pay equaling 2 percent of their annual salaries, multiplied by the number of years worked. The payments would start within two weeks of the stores' closing and would be made in weekly increments, the letters state.
The letters were sent to employees whose stores were being closed throughout the month of August.
On Sept. 17, Mortensen testified in court that unless the court authorized him to borrow an additional $2.9"million, even August payroll checks would bounce.
Mortensen could not be reached for comment. The union's international office has been asked to pursue the severance issue with the U.S. Trustee's Office, Kimberle said.