Home Economic Issues The Colortree Layoff Offers Labor Discovery Learning

The Colortree Layoff Offers Labor Discovery Learning


by Dan Sullivan

Looking over the crowd of suddenly former employees one wondered if any of them remain virulently anti-union. This week, they showed up for work and, without warning, work did not show up for them. Then Friday, they discovered that their payroll went AWOL, joining their health insurance.

On Monday, Henrico’s Colortree Group closed its doors after giving some 240 employees a few minutes to gather their personal belongings. There are regulations about providing notice to employees (WARN Notices). These are not readily enforceable and by the time they are violated, the entities that the United States Supreme Court has endowed with personhood have often dissolved into nothingness, protecting the investor(s) while the very human former employees have no choice but to soldier on. The costs of corporate malfeasance have been effectively passed to labor. Often the consequences are tragic.

These employees have no representative. They have no bargaining power. Virginia Career Works using federal funding through the Workforce Innovation and Opportunity Act is tasked with gathering representatives from the Virginia Employment Commission and the local Workforce Center to provide information about resources for their transition from employment in an effort termed Rapid Response. The concept is to reach these displaced workers in advance of their job loss to build a bridge to their next employment. This sometimes includes subsidized skills training and education for a transition to a new career path. What it doesn’t do is enforce employee entitlements and rights. In Virginia, employer rights trump employee rights by default. Without unionization, employers hold all the cards. Sure, employees can take class action … but against whom?

By accident of historical circumstance, many employees are provided health insurance coverage by employers. This evolution was no result of free market forces and despite the dubious policy assertions of Presidential candidates like Seth Moulton, there is no free market solution to health care access. Former Colortree employees are suffering the consequences of an economic construct without merit. As of this writing, they cannot be certain whether they have health insurance or access to new coverage. Nor are health care navigators easy to locate for assistance since the Trump administration slashed funding for the Affordable Care Act program.

Apparently Colortree missed the last health insurance premium payment but it is not clear what benefit period that covers. Employees were informed that their coverage ended on June 3rd but representatives of the insurance company contacted Thursday were unaware that coverage had ended or that there was an intention to end it (just another loose end). That means employees don’t know when or if coverage ended and that determines when they are/will be eligible for another coverage option whether through a spouse’s employment, the Affordable Care Act, or Medicaid. By failing to consider the employees in the closure timing, Colortree may have effectively disqualified them from uninterrupted healthcare coverage. This type of closure does not qualify them for continued coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act).

Meanwhile there are former employees who have immediate continuity of care requirements. One woman came to the Rapid Response from maternity leave. Her child, born three weeks ago, had complications that demand continued treatment and care not to mention her own needs (and she didn’t). One employee was scheduled for an infusion yesterday at a cost of $24,000; his physician told him to not worry about the cost; it would be covered by the hospital if he could not afford it (proof you shouldn’t take financial advice from doctors). Another came to the briefing on sick leave following a triple bypass. And one employee who relocated to Virginia with his family not too long ago has a special needs child with heart disease; at least the children from that family will qualify for Medicaid and maybe the adults if Colortree doesn’t meet payroll as promised tomorrow.

As an aside, political office holders who relish appearances wearing hardhats with their coats and ties and gowns while turning shovels at groundbreaking events are rarer than hens’ teeth at Rapid Response presentations. This one, within a short driving distance from the state Capitol, was no exception.

When is the last time you heard a Governor, any Governor, take credit for a layoff? WARN Notices, when they are filed, are reported here, in the event any officeholder cares.


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