eCorp faces new challenges
MIDDLEBURY — The Vermont Department of Labor is representing at least five former eCorp English workers who have filed complaints against the company for failure to pay back wages.
As the Addison Independent went to press on Friday, eCorp management was working to make good on those previously bounced paychecks; two complainants confirmed on Thursday that they had been cut new checks.
But last week was indeed difficult for eCorp, as company founder and CEO Deborah Schwarz confirmed she had offered a furlough option of up to 10 weeks to all of her employees. Ultimately, five accepted the offer, which she said will allow them to collect unemployment and perhaps rejoin the company later this spring. That leaves eCorp with 31 full- and part-time workers, according to Schwarz.
When eCorp — a company that teaches English to international executives — relocated to the Middlebury industrial park last year with substantial state assistance, company officials predicted a work force of 100 workers by 2013.
But Schwarz has acknowledged the company was undercapitalized for its Middlebury launch, an oversight exacerbated by a period of lower revenues this winter during development of eCorp’s WordFortune learning software.
“We know this has been a rocky beginning in Vermont, but we have the best interests of the community and the people in mind,” Schwarz said during a phone interview on Friday.
“We are committed to surviving here in Vermont, generating jobs and participating in the growing economy.”
The financial difficulties have led to eCorp missing payroll deadlines and defaulting on bills to contractors and other service providers. Schwarz has said she has been working with eCorp’s board members to get infusions of more cash to help the company stay afloat while it markets WordFortune.
But some of eCorp’s creditors have served notice they can’t afford to wait for their compensation. Mason Cho, who served as eCorp’s vice president for sales for Asia until Feb. 15, recently filed a complaint with the Department of Labor and Middlebury police, claiming he was owed outstanding salary payments totaling $5,453. Middlebury police Officer Scott Fisher helped assist him with the bad check complaint, according to police records.
Alan Shashok was eCorp’s global training manager before leaving Feb. 3 due to concerns about final compensation, he said.
The Independent e-mailed Schwarz a copy of Cho’s bad-check complaint on March 5.
Both men reported on Thursday, March 8, that they had received new checks.
“Payroll-wise, I am OK,” Shashok said of his compensation status with eCorp. “But I am due some other reimbursement benefits that have yet to see the light of day.”
Schwarz attributed the bounced checks to the delay in a money transfer from a European account.
“That led to the overdraft,” Schwarz said. “It finally showed up, and we paid everybody, including their fees. That’s all set.”
Schwarz acknowledged that eCorp’s inability to meet payroll persists.
“We still have another late payroll, and we have a payroll due tomorrow (Friday, March 9) which we will not be able to honor,” Schwarz said. “Our problems are still dramatic and as a result we are in the process of furloughing people.”
Anne Noonan, commissioner of the Vermont Department of Labor, confirmed that her agency had filed a complaint against eCorp and Schwarz in Addison County Superior Court regarding unpaid wages. She said she could not disclose the total amount of back wages involved in the complaint.
“eCorp English and Ms. Schwarz have been served with the Vermont Department of Labor’s summons and complaint in which the department seeks to recover from eCorp English Ltd. and Ms. Schwarz unpaid wages owed to company employees and penalties for late payment of wages,” Noonan said through a written reply to the Independent’s inquiry. “The department continues to receive claims for unpaid wages from some staff.”
She noted it is in eCorp’s best interest to pay its wage debts as soon as possible.
Chapter 21, section 342a of the Vermont Statutes Annotated states that, “If the commissioner finds that the unpaid wages were willfully withheld by the employer, the commissioner may collect from the employer an additional amount not to exceed twice the amount of the unpaid wages, one-half of which will be remitted to the employee and one-half of which shall be retained by the commissioner to offset estimated administrative and collection costs.”
Schwarz remains hopeful that eCorp will navigate through its current financial storm. She said the company will remain quiet through mid-April as it commits itself to improvement. Schwarz said eCorp has not entertained any offers to be purchased, nor is it for sale.
“Hopefully, we will turn the corner on this soon,” Schwarz said.
Reporter John Flowers is at email@example.com.