LITTLE ROCK — Eight former employees of Child Development Inc., a former nonprofit organization based in Russellville that administered Head Start programs in 13 Arkansas counties, are suing it and its Colorado based successor corporation, alleging they were victims of federal labor law violations and deserve compensation.
The Arkansas Democrat-Gazette reported Feb. 12 that Denver-based Community Development Institute had agreed to take over for the financially troubled organization and provide state-funded preschool for nearly 400 children for the remainder of the school year.
Federal funding delays were cited as the reason behind the Russellville organization’s closing. Its financial troubles came to light when it failed to make payroll for its employees in January.
A spokesman for the state Department of Human Services said in February that the employees, who provide services for the state-funded Arkansas Better Chance for School Success program, were later compensated. The department provides the preschool grants.
The lawsuit contends that not only did the company fail to pay employees or reimburse them for expenses incurred between Jan. 9 through Feb. 10, but it kept part of their compensation that was to go into their retirement accounts and be used for their insurance premiums.
The lawsuit, filed in federal court in Little Rock on Monday evening, also names the company’s executive director, Jo Ann Williams, and its fiscal officer, Lisa Barber, as defendants.
The lawsuit seeks collective action status, noting that the Russellville organization employed 350 to 400 people when employees worked without pay on the promise of being eventually paid, causing them to incur other damages such as late fees on unpaid debts and bank fees.
A committee of the organization’s board of directors met monthly between September 2011 and January, reviewing and approving the organization’s financial reports and budget, the lawsuit states. On Feb. 2, it says, the board voted to relinquish federal funding, and a day later, fired employees, most of whom were soon rehired to perform identical work by the Denver-based corporation.
The suit, assigned to U.S. District Judge Bill Wilson, seeks an injunction to prevent the employees’ compensation from being withheld, a courtordered accounting of all the compensation to which they are entitled, and monetary damages.
It was filed by Little Rock attorney John Holleman and North Little Rock attorney Morgan “Chip” Welch.
Arkansas, Pages 14 on 03/28/2012