BRATTLEBORO — Vermont Attorney General T. J. Donovan has filed a legal brief in support of former employees of Vermont Bread Co., who have gone to court to force the company’s receiver to pay wages and benefits the workers say they were owed when the company abruptly closed last month.
Former workers at Vermont Bread Co. in Brattleboro and Koffee Kup Bakery in Burlington were left jobless on April 26 when American Industrial Acquisition Corporation, the company that purchased the bakeries on April 1, shut the doors. Workers at locations in Brattleboro, Burlington, and North Grosvenor Dale, Conn., arrived for work that morning to find their jobs had vanished.
The closure left about 500 people unemployed, including 91 workers at Vermont Bread Co., located on Cotton Mill Hill.
In the civil court case, Key Bank, N.A. vs. Koffee Kup Bakery, et. al., Koffee Kup claims Key Bank, acting as receiver for the company’s assets, owes $797,568.17 in accrued paid time off. The case is before Vermont Superior Court in Chittenden County.
In its brief, Donovan’s office argues that the court should compel the receiver and Key Bank to pay employees for the accrued paid time off, based on Vermont law.
“Koffee Kup employees earned these wages and this money should be paid back to them,” Donovan said in a press release.
In the filing, Donovan says the state’s interest in the case is that “Vermont employees are protected and their economic well-being is redressed,” and that “Vermont employers are held to their obligations and that all Vermont employers can count on a fair and honest marketplace of proper wage distributions even when faced with receivership or a business terminating operations.”
In the brief, filed by Assistant Attorney General Justin E. Kolber, the state argues that Koffee Kup employees’ accrued paid time off is considered “wages” under state statute, and should have been paid to employees within 72 hours of closure. It further argues that failure to do so violates state labor law and the Vermont Consumer Protection Act.
The action is separate from a class action lawsuit filed by Koffee Kup employees, alleging that American Industrial Acquisition Corporation failed to abide by labor law when it did not warn workers 60 days in advance that they were about to lose their jobs.
Earlier this month, a potential buyer for the company emerged when the Vermont Economic Progress Council approved nearly $837,000 in incentives to East Baking Company of Holyoke, Mass. That incentive program provides an annual cash payment to a business that promises to employ a certain number of people at a specific wage level and make certain capital investments over seven years.
In addition to the incentive, East Baking Company also received approval for a Labor Market Area enhancement, which means the benefit to the company if it meets the benchmarks as promised could be up to $1.2 million.
The Reformer has also learned from a confidential source that an unidentified Canadian Company has also shown interest in Koffee Kup and its affiliated bakeries.