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Did mental health hospital layoffs violate federal law?

Palm Beach Post - 10/19/2019

WEST PALM BEACH -- A major mental health hospital in West Palm Beach may have violated federal labor law when it abruptly closed its doors and laid off more than 300 employees.

The beleaguered Jerome Golden Center for Behavioral Health, one of just two nonprofit mental health treatment centers in the county, closed its 45th Street hospital near St. Mary's Medical Center Friday.

But the center didn't give its workers or the state the required 60-day notice of a mass layoff even as it started cutting staff and stripping workers from the schedule in late September, employees and state officials said.

Labor lawyers say the Golden Center may have violated a federal law known as the Workers Adjustment and Retraining Notification Act, or WARN Act, meant to protect employees' rights amid mass layoffs.

If a company lays off more than 33 percent of its workforce in a 30 day period, it has to notify its employees and the Florida Department of Economic Opportunity, the law says.

Companies have to pay workers' salaries and benefits for the 60 days.

But Golden Center employees say they were blindsided by the shutdown and layoff announcement Friday, hours before the center changed the locks on the hospital doors.

"I thought they were supposed to give us a warning, but instead I'm not even getting a severance package," said Terry Rowbotham, a nurse at the mental health hospital since 1987. The center laid off Rowbotham on Oct. 4.

The Golden Center -- which treats mainly low-income and uninsured patients -- would not say how many employees it laid off.

But it kept only 10 to 20 employees as of Friday, said Ann Berner, chief executive officer of Southeast Behavioral Health Network which oversees the Golden Center.

Board Chairman Jimmy Miller and a crisis public relations firm hired by the center have not returned multiple phone calls or emails requesting comment.

The state Department of Economic Opportunity did not get a WARN Act notice from the center as of Friday, a department official said.

"This sounds problematic," said Ryan Barack, a labor lawyer in the Tampa area who has represented workers in several WARN Act cases against employers.

"It sounds like (the center) knew in advance that there was a problem. They can't wait for things to explode."

The federal WARN Act is meant to give workers time to plan for losing their jobs and give the state time to respond to a flood of unemployed professionals in a similar field.

After filing for bankruptcy protection in late September, the Golden Center announced most of its employees might be laid off and relinquished management of its mental health hospital to South County Mental Health Center, based in Delray Beach.

Initially, the center laid off only about 34 employees. Others say they were removed from work schedules, but weren't sure whether they had a job.

They might be protected by the WARN Act, too, Barack said.

"If you're not being paid, you're not working. It sounds a lot like a termination," he said. "It looks like a duck. It quacks like a duck. It's not a platypus."

Some companies lay off workers in small groups over time to avoid triggering the WARN Act, said Sid Garcia, a labor lawyer in West Palm Beach.

"Sometimes employers will do that in waves to avoid that law kicking in," Garcia said.

But even if a company is trying to circumvent the labor law, a judge might consider that a violation, said Jessica Crane, a lawyer representing former employees of Tampa'sLaser Spine Institute, which abruptly laid off more than 500 workers in March.

"If they are trying to conceal or delay layoffs in order to avoid the WARN Act, that's something that will come out in court," Crane said.

The weeks of uncertainty left some employees wondering whether they should look for other jobs.

It's possible the center was waiting for employees to find another job and resign, which wouldn't count toward overall layoffs, said Linda Bond Edwards, a labor lawyer in Tallahassee.

"It kind of gets the employer off the hook if the employee resigns," Edwards said. "It's dicey, but they might be expecting that."

The federal government won't act on the labor law, but employees can sue companies for violating it. Employers are liable for up to 60 days back pay and benefits, civil fines and attorney fees.

There are exceptions to the WARN Act, including companies that faced "unforeseeable business circumstances," caused by a dramatic or sudden circumstance out of the employer's control.

The Golden Center board said the hospital ran out of money after operating on a crippling deficit for years. The board also said it wasn't aware of the center's financial turmoil because the former chief financial officer misrepresented the center's finances.

Board Chairman Miller, in an interview with The Post on Oct. 3, said Chief Financial Officer Alan Heide shared with the board promising monthly financial reports. The board thought the center was climbing out of debilitating debt.

In early August, Heide quit. Two weeks later, he was indicted on a charge of conspiracy to commit securities fraud for an unrelated payday loan Ponzi scheme.

Heide's charge, for which he pleaded guilty in late August, prompted the center to examine its finances, Miller said.

The revelation that the Golden Center, a 40-year-old hospital, was almost entirely out of money was a shock to the board, Miller said.

But the law isn't clear whether the board's sudden discovery of the financial struggles exempts the Golden Center from warning employees about layoffs.

The 44-bed center served as a critical intake facility for mental health patients without insurance and for court-ordered Baker Act patients, who are deemed a danger to themselves or others.

The Palm Beach County Jail frequently sent inmates seeking mental health treatment to the Golden Center, said Michael Gauger, Palm Beach County Sheriff's chief deputy.

"This is a crisis in this county," Gauger said at a Southeast Florida Behavioral Health Network board meeting Tuesday. Gauger serves on the network's board.

"We cannot lose those beds," he said. "Our mental health units (at the jail) are absolutely full."

And after losing a critical hospital and hundreds of jobs, employees feel betrayed.

"There was no warning," said a case manager who was laid off last week. "They saw it coming, but we saw nothing."

lramadan@pbpost.com

@luluramadan

hmorse@pbpost.com

@mannahhorse

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