News

Hundreds of Arby's employees stiffed out of paychecks

October 13, 2010

Employees at 25 Arby's restaurants in Alabama, Mississippi, Florida and Georgia did not get paid for as many as three weeks after owner PRP Inc. filed for bankruptcy.

According to the Press-Register, almost 400 employees were left high and dry, not receiving payment for their final days of work before a judge took away the management of 22 stores from PRP Inc.

A handful of those employees are being represented by Mobile lawyer Michael B. Smith, who claimed PRP failed to make its final payroll.

The bankruptcy process was put in motion by First Franchise Capital Corp., PRP's largest lender, which is looking to transfer ownership of these units to Beavers Inc., an Arby's franchisee based in Florida. Since Oct. 5, Beavers has been operating the stores on an interim basis.

The court filings claim that PRP has only offered to pay creditors $1.6 million of its $8.4 million debt.

Beavers has offered to pay $2.8 million up front, and the rest would be paid at a 6 percent interest rate over 10 years.

Many employees have been shorted two to three weeks worth of wages, with some amounts reaching close to $1,000. Beavers has offered gifts to the employees who didn't quit after not getting paid and plans to retain them.

From the story:

"When we found out they didn't get paid, we tried to get some money in their hands," said John Howell, Beavers' controller.

Employers who don't pay workers can be subject to federal enforcement action. U.S. Labor Department spokesman Michael Wald said Tuesday that the agency's Wage and Hour Division had not opened an inquiry.