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State program pays workers what they're owed

After 5 Old Farmhouse locations were closed, some employees were compensated through Wage Security Fund
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The tables are still set for customers after the sudden closure of the Old Farmhouse restaurants. This one is in north Medford near the Rogue Valley Mall. Mail Tribune / Bob Pennell photo
 Posted: 2:00 AM April 22, 2013

Some former employees of Old Farmhouse restaurants who were owed a paycheck when the chain's five locations were shuttered on Feb. 12 have been paid from a state fund designed for such times.

The Bureau of Labor and Industries entries show 14 of 18 employees who have filed wage claims — primarily during March — have been paid a total of more than $10,600 through April 5. A spokesman for the bureau anticipated more claims would be filed as former Old Farmhouse employees became aware of the program, which is funded through a payroll tax equivalent to 3 cents per $100.

There is a cap of $4,000 for an individual worker from the Wage Security Fund, said Labor and Industries spokesman Charlie Burr. But all the workers whose claims have been paid to date have been paid dollar for dollar.

"We always try to collect from the responsible party, but we're set up for the reality that some business owners become insolvent," Burr said. "It's not that they don't want to pay, they simply aren't able to."

Greg and Cheryl Cordova, who operated Old Farmhouse Restaurant, Farm Fries Inc. and Cordova Enterprises, filed for Chapter 7 protection in U.S. Bankruptcy Court on April 5. According to court documents, the Cordovas owed more than 100 creditors — about half of whom were employees — more than $1 million.

The Wage Security Fund pays out about $785,000 annually, Burr said. Last year, Select Onion, an Ontario processing plant, closed, affecting 240 workers who were paid nearly $250,000 from the fund.

When Integrated Freight Corp. suddenly ceased operations at its Tolo Road terminal in early 2012, it triggered $14,378 in wage claims for nine former employees.

When the Old Farmhouse restaurants in White City, north Medford, south Medford, Phoenix and Ashland closed, it put 50 people out of work. So far, only a third of those staff members have applied for wage reimbursement.

The agency hopes to hear from more of the chain's former employees who were owed money, said Labor and Industries Commissioner Brad Avakian, "so we can investigate and help them through our wage security fund like we're doing with the Old Farmhouse closures."

Cynthia Murray, who worked at the Old Farmhouse between North Riverside Avenue and Court Street near the Rogue Valley Mall, previously had worked at a restaurant that closed in Ashland, she recalled. "I got paid then."

She found out about the program from the Employment Department. She thought some of her co-workers didn't apply for the program because it might appear they were taking charity.

"I think some of them have thoughts there is a stigma associated with it," said Murray, who typically worked 38 to 40 hours per week. "But when I talked to the Labor Board people they told me there is funding for this. A lot of the people I worked with had kids that depended on their income."

The Gold Hill resident said she was treated well during the nearly four years she worked for the Cordovas.

"They are just going through a rough time themselves," Murray said.

It didn't take long for Murray to get back on her feet.

"Bee Gee's (Diner) in Rogue River called me the next day," she said.

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter @GregMTBusiness, and read his blog at www.mailtribune.com/Economic Edge.



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