Tuesday, March 24, 2009

Evergreen Pulp workers screwed again. Forcing worker bankruptcy? What a fiasco.

I have heard from workers who are now being contacted personally for their medical bills. We had a binding agreement with Evergreen Pulp for health coverage through November 2008 with Jeff Pauli's Western Self Insurance Services (WSIS). In October we were offered the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) which we could individually purchase to cover ourselves and our families. Well that Cobra "Act" does not apply to workers whose company disbands it's health program, which Evergreen did.

The AWPPW local 49 put a lien on Evergreen assests for numerous violations and held the potential sale to a new owner, Freshwater Pulp in limbo. Our standing committee met with Freshwater Representative Bob Simpson and ex-CEO David Tsang of Evergreen to come to a resolution so the sale could go through escrow. An agreement was made for wages and medical debts to be covered. Only problem is, no one handed over a check. It seems that it was contingent over the mill starting up and generating money, which may never happen.

Bottom line. The $300,000 of medical debt has risen to over $400,000 with no end in sight because of processing delays by medical billers. People are being charged for bills that happened nearly a year ago! They should have been processed and paid off long before Evergreen closed.

This issue is putting some workers in a very precarious financial position. Some may have to file bankruptcy or file for some sort of hardship because they are out of work. This issue just seems to be getting worse and worse.

Lee and Man/Evergreen/Worthy Pick seems to have been able to do poor business practices on American soil with impunity. Even counsel for the Humboldt Bay Municipal Water District said it was futile for the district to go after monies owed. (I had publicly requested the board to consider legal action.) Shouldn't some arm on the legislative side do some action so Chinese investors can't just come onto American soil and extract our natural resources? (Water, wood chips and pulp fiber) And then leave a loyal workforce in total disarray? This is criminal I tell you!

26 comments:

Stephen said...

Through the Heartlands Project, me and Sparky's oft resurrected economic development project for the Bear River tribe, we were once about to do a partnership with Evergreen Pulp until both ends of the partnership fell apart with both tribal council and Lee and Mann rejection. The thing is, both Sparky and me had new cardboard products to create finished pulp process products locally. Perhaps ex-Evergreen Pulp workers might be interested in another try at tribal partnership backing a complete pulp to cardboard products plant. It might be something to consider.

Anonymous said...

C'mon Stephen. What are you saying? That the workers still have a chance?

Anonymous said...

The mill wouldn't have been closed in the first place if it was making money. The committee had to know the mill can't restart unless pulp prices increase. There wasn't any sign pulp prices would go up for quite a while.

Under the circumstances, I just can't understand why they would agree to that contingency. Didn't the standing committe's lawyer point out the obviously huge risk of conditioning current medical payments on the mill being reopened?

If you drive past a high water warning sign and your car gets stuck, you weren't screwed, you were reckless.

Stephen said...

New pulp based products, especially ones that every builder could use, could attract funding for an employee-owned facility. Aren't you guys sick and tired of being pawns of outside corporations?

Fred said...

Rich asks, "Shouldn't some arm on the legislative side do some action so Chinese investors can't just come onto American soil and extract our natural resources? (Water, wood chips and pulp fiber) And then leave a loyal workforce in total disarray?"

Perhaps, but I believe the Chinese do the same thing in their own country. Saw some TV show the other day where some toy factory in China closed down. Management just up and left and didn't pay the workers anything.

Anonymous said...

I hear that the water will soon be shut off. Is that the end of the pulp mill?

Anonymous said...

Has anyone heard about the power plant next door putting their boier water out in the sand dunes? Apparently all they have to do is open a valve and away the water goes. I wonder what the enviros will think of this?

Anonymous said...

Lee & Mann, company of the year!

Anonymous said...

Has anyone stopped and considered for just a minute, that maybe the Chinese had observed and developed their business style off our own American investors' business model.

Why should we expect them to behave any differently than those domestic investors in our country.

Just look what happened to the markets over the past year. Who was responsible for that??

Anonymous said...

With the new rules about pot, why don't you replace the illegals and grow pot.

Anonymous said...

Big Rich remember when you were in that puddle and were almost electricuted to death? It wasnt the forshadowing of your own early death but the death of the mill. You know when they shut off the water the mill is dead. Its dead! Theres no bringing the old girl back. Not this time. Not in 2011. Not ever. She'll sooner be brought back a whorehouse or nursery than a proper mill. The old girl is taking in her last air. It's time to let her go and move on. By God there were good times, but maybe it's for the best. We made the best damn pulp in the USA and nobody can take that away from any of us it was all a team effort. God bless you all, God bless the mill!

Stephen said...

In terms of environmental responsibility, Humboldt County needs a pulp mill to process the residual material left over from lumber milling. A pulp mill to cardboard containers would provide a complete system dealing with timber production. Look around your house and imagine what you would do without cardboard boxes. There will always be a need for these boxes and why not make them here close to the source of raw material?

Why not form an employee-owned corporation and just go yourselves to where venture capital is which right now is in China. Take their money for starting an American employee-owned business which is ideologically up their alley or at least they are quite familiar with the concept. The Chinese seemed eager to work with Native Americans which fueled our Heartlands project dreams but perhaps united pulp workers would be just as attractive an investment to them. I don't know but seems to me worth checking out further options before giving up altogether. As long as there's timber production there will always be pulp produced and people always need containers. Plus, we've got some new products based on pulp material that would expand the product line. Why not think creatively like the real estate market was forced to do when few could afford property prices.

Anonymous said...

Stephen, when the rest of the sawmills shut down there will be no residual to process into pulp. Perhaps we should grow hemp and make paper products out of that.

Michelle said...

Richard, I am a wife of a former Evergreen employee. I check into your blog every once and a while and was shocked to read this today about the insurance situation. We too just received a bill for a procedure that was pre-authorized and done while he was still employed. I called WSIS and they said that the bills would not get paid until the mill is in operation. WSIS said they have been calling Chesbros, Wiggins, and Thompsons office. They asked me why my husbands union is not making more noise about the unfairness of this situation? That's a good question and I thought I would bring that to you to pass on to the other employees. There should be an organized effort coming from the union to call the representatives daily as well as the newspapers. For this many employees to loose their job and for the community to be so quiet is a shame. We all realize the mill will probably not come back on line, however the bills should absolutely be paid in full.

samoasoftball said...

Stephen: You make many relevant appeals to the workers. How about you and Sparky showing up to a union meeting and presenting your plan/idea. You might want to meet with Robert Simpson first.

Fred: Yes, that is happening on their own country. Don't know what to say.

11:28pm- I was not part of that process.

Michelle- You say it so well. I have been in touch with all offices you mention and as far as the press is concerned......it is the economy! John Driscoll is on furlough to save the Times Standard Money! He will do a story when he is allowed to return to work. The TS is shorthanded. Sad huh. Can't get our story out because of the economy that is affecting us!

I had to delete a few of the comments that were over the top. Keep it on topic and off personalities please.

Stephen said...

I talked with Sparky and we're up for a meeting with pulp mill workers. Let us know when and where.

Michelle said...

Richard-just got off the phone with Wiggins office. The gentleman answering the phone said he is aware of the situation and that there is nothing he can do in regards to making a company follow through on its obligation. I disagree. A company should not make a promise that it cannot follow through on. I find it interesting that Bob Simpson did not know that there would not be enough chips to open the mill in the first place. I would think that he had all the contacts and would have researched this before he purchased the mill. Perhaps, he knew and had other intentions all along. Perhaps, he agreed to pay this to make all happy at the time, knowing he could use the lack of chip story. Either way the employees are the ones paying for this now. I did tell wiggins office that they can come out and speak in favor of the employees even if legally there is nothing they can do. Please encourage the former employees to be more vocal, I know they read your blog. They should be e-mailing Chesbro, Wiggins, Thompson or calling their local office. By the way, he to asked-WHY ISN'T THE UNION MAKEING MORE NOISE?

Jeff Pauli said...

This is what I sent to Mike Thompson's office.

Thank you for the call back today. I am going to attempt to give you the readers digest version of what has taken place in regards to Evergreen Pulp Inc. and their medical plan.

Evergreen Pulp Inc., like lots of larger employers chose to self-fund their employee health benefits plan. Evergreen Pulp had been self-insured for years. The risk to self-insure is reduced by purchasing re-insurance. Their re-insurance took any claim over $60,000 in their plan year. Western Self-Insurance Service (WSIS) of which I am the owner, administered this medical plan. The plan works like a fully funded insurance plan. An employee has a service done at a hospital or doctor office, we receive, adjudicate and pay the claims. Here at WSIS we pay claims weekly. Its a simple process when we can actually pay the claims. Evergreen Pulp Inc. stopped funding the bank account to pay their claims on the first week of December 2008. We were assured that although most of the employees had been terminated/laid off that they had every intention on keeping the plan funded. The plan was terminated December 31st 2008. Claims can take months after the time of service to get to our office and to complicate manners our office had just taken the account over from the previous administrator located in Illinois. Claims kept getting mailed to the previous administrator causing even longer than usual delays. I communicated the increasing weekly totals to the President on down to the HR department. They kept telling me that the parent company (Lee and Man Paper) owed them money.

During the month of December 2008 and January 2009, the mill was in negotiations to be purchased. Everyone who was owed money, placed liens to get paid. I consulted with my attorney and it was made clear that we could not put a lien on the money owed because they did not owe WSIS. They owed the money to each individual provider. By this time the liens outweighed the value of the sale by a large sum. In the mean time I was contacting the Association of Western Pulp and Paper Workers Local 49 (AWPPW) who represent the 200+ employees informing them that they would be responsible for this accumulating debt as individuals. I also contacted the prospective buyers to see if this debt was to be included in the sale. It was not, but the new owner agreed that the employees should not be saddled with the debt. After a meeting with the new owners and the AWPPW Local 49 president, it was determined that this new venture now called Freshwater Pulp would provide funds not to exceed $300K to pay for claims which at that time totaled just under $280K. In addition the new owners would provide a piece of equipment valued at $130K to be sold to take care of anticipated additional claims. Here is the kicker. These funds would only be released "if and when the mill becomes fully operational". The latest news to come from the new owners is that the pulp mill will probably not be brought back for at least two years. This has triggered the providers to start demanding payment for these bills from the individuals.

In my efforts to keep this communication as brief as possible, I will not go into the details of the conversations that we have here on a daily basis with folks who are faced with these bills. I know of 7 employees who owe more than $15k, two who owe more than $30K and lots who owe more than $2K. It is causing folks to file bankruptcy and or lose their homes. It is very difficult to be the person telling these folks that they have been screwed by Evergreen Pulp and are 100% responsible to pay these claims. The total debt is now around $360K. It is truly a hardship for all involved, especially an unemployed mill worker with a bill that is impossible for them to pay.

In short, Lee and Man Paper purchased this mill and had 100% of the pulp production barged to their plant in China. For a couple of years they paid Evergreen Pulp (owned by Lee and Man) for this product. When the pulp market softened, they spun Evergreen Pulp into some sort of offshore corporation. They withheld payment for the final load of pulp, essentially breaking the company and then sold what was left. It is a crime in my eyes, but I understand these type of business tactics happen from time to time. In all of the bail out stories and appropriation of funds I thought there may be something that our government could do to protect these folks from an economic catastrophe. A catastrophe cause by a company that is still doing business in the United States and caused devastating effects in a small community like Humboldt County. Liz, I truly appreciate you conveying this story to Mike and I hope that there is something that he can do.

If you need any more information or if there is anything I can do for you, please do not hesitate to call.

Thank you.

Jeff Pauli
Western Self-Insurance Service
619 5th St.
Eureka, Ca. 95501

707.445.5496 Office
707.445.5498 Fax

Anonymous said...

That kind of noise will only happen when you retain a lawyer.

samoasoftball said...

Thanks Jeff for doing that breakdown of what has happened.

Michelle: I guess I should do something to make it easy for people to e-mail. I will work on that.

samoasoftball said...

Stephen. If you and Sparky want to address the union workforce at our next general meeting on April 1st at 4pm, call local 49 President Tom Reilly at 443-9267 to let him know your intentions.

Stephen said...

You're joking, right? April 1st? Ok. I'll be talking with Sparky tonight about this.

Anonymous said...

I am left wondering how the Union let this happen to them. To agree to a deal with this type of language in it is hard to fathom. I am not casting dispersions as I was not privvy to all the pertinent info but the fact remains the workers got shafted and it appears that Simpson somehow took advantage of the desperation of the workers and will ultimately do his own thing, whatever that turns out to be. I think that it is unconscionable that people are screwed over and over in the same deal. All people generally want to do is take care of their families and live a decent life. At the end of the day, Simpson and his crew will move ahead with their real plans, the workers will continue to suffer, they will collect their money and forget everyone else involved. I may turn out to be dead wrong about this whole sordid mess but nothing I have seen or heard leads me to any other conclusion.

Stephen said...

Richard, Sparky and I talked it over and both decided that we are pretty much burned out of trying to pitch new business ideas, new product ideas to pulp or lumber mill owners or workers. You guys have your problems which absorb your attention and what we have to offer would only seem a distraction. We've both have concluded Humboldt County is not ready for our economic recovery visions and are tired of pitching them to people who really aren't there to hear them because they are caught up in old disputes. Good luck.

Anonymous said...

[url=http://dcxvssh.com]HXvapfN[/url] , dmboPouUPlZZpy , http://yuxeflk.com

Stephanie said...

Stephen. If you and Sparky want to address the union workforce at our next general meeting on April 1st at 4pm, call local 49 President Tom Reilly at 443-9267 to let him know your intentions.