Dear former Midway employee asking about unpaid wages, here's your answer:
by Alexander Sliwinski 
{ Feb 25th 2009 at 1:31PM }
As to the matter at hand, we have received a request for legal advice from an alleged former employee of Midway, who writes:
"Those impacted by the recent lay off seem to have lost their PTO (earned vacation days). Class action law suit may be pending. Getting 2 months paid leave of absence was really nice, but that was required by law (the Mitchell Act) requiring 60 days notice for mass layoffs. After receiving a letter in the final week stating that the accrued PTO was NOT to be received in the final check, but in the following pay period, Midway declared Chapter 11 and evidently sent a subsequent letter stating that the PTO would not be paid at all. Evidently this is pretty common with bankruptcy. Is there a class-action lawsuit that people can join or should we all just file a claim in small claims court?"
Lucky for you, we've got a talented lawyer (and LGJ columnist) on staff, Mark Methenitis. Read Mark's response after the break.
Mark writes:
The exact rules related to repayment of paid time off varies by state based on where the employee was working. If the state requires that the payout be made, then certainly the terminated employees need to look into legal action (which could be structured as a class action or on a case by case basis), and a local employment law attorney would be who they need to turn to in this case. However, other states may leave it to company policy or not speak to repayment of earned paid time off at all, so it does vary. Midway being based in Illinois, I believe those state rules require repayment of vacation time but not sick time, but former Midway employees should check with an attorney licensed in Illinois on the issue.
Hope that helps anonymous guy/gal! Midway, care to comment?
Reader Comments (Page 1 of 1)
FemaleOrca @ Feb 25th 2009 1:41PM
Such a shitty situation for all involved. Best of luck to the anonymous, jobless, developer, and all those like him.
copa @ Feb 25th 2009 1:43PM
If it makes you feel good to spend the attorney fees, I have no doubt you can win a summary judgement against Midway. Just remember two things:
1) Midway already owes more than $70 million to other people
2) You are not a preferred creditor.
So win or lose, you will not see that money anyway.
LaughingTarget @ Feb 25th 2009 2:48PM
Don't back wages generally take a higher priority than other forms of debt?
Voodoo65 @ Feb 25th 2009 7:09PM
Like the REAL lawyer said: Seek the advice of a local law attorney, and not the advice of some hack on a blog.
Professor Lario @ Feb 25th 2009 1:45PM
Posts like this are why I read Joystiq. Well, and that cute Afrikaner running around...
baby sea tuna @ Feb 25th 2009 1:57PM
Man, this whole thing sucks. Their employees are going to have to steal a lot of office supplies to make up for that severence non-package.
Mr Khan @ Feb 25th 2009 2:15PM
Or tear a lot of copper wiring out of the walls
baby sea tuna @ Feb 25th 2009 2:18PM
Ooh, good idea! It seems to work for the junkie bums here in Baltimore.
Morgon @ Feb 25th 2009 2:33PM
Hah - indeed, BST.. nice to see another MD guy.
Although last I heard, there was supposed to be some law requiring identification to make any payouts on scrap - mostly to avoid catalytic converter thefts.
Deck @ Feb 25th 2009 2:04PM
What a horrible situation! Best luck to all those involved. Very nice to see this type of post on Joystiq, this was really nice!
Gus @ Feb 25th 2009 2:17PM
Whoa there everyone. Before you go ahead and start filing lawsuits, you should know that Midway's filing of a chapter 11 case imposes an automatic stay of all attempts to collect a debt that arose before their bankruptcy petition. In non-lawyer speak, you can't file a suit against Midway at this time regardless of the status of state law.
The positive news, if there is any, is that you likely have a priority claim against midway for the unpaid wages. The United States Bankruptcy Code provides that a party has a priority claim of up to $10,950 for earned by unpaid wages, severance, and sick leave. Based on the brief facts presented, it seems like the PTO could be wages or, at least arguably, severance (depending on how Midway presented it). I would counsel employees to pay attention to the case and to file claims (the form will allow you to select priority status and why you have priority) for unpaid wages prior to the "bar date." There may still be a fight about the entitlement to payment of PTO, but that fight will be in bankruptcy court. You should consult a bankruptcy lawyer with any queations regarding filling out the claim form, once it is released.
Mark Methenitis @ Feb 25th 2009 3:08PM
I don't necessarily disagree with your point; more than likely this is more appropriate as a tack on to the bankruptcy proceedings. That being said, most of these employees need to figure out what, if anything, they're owed before proceeding with a filing in the bankruptcy proceedings, and an employment attorney would have those answers. But, overall, it's likely that both an employment and bankruptcy counsel would be needed.
Guskd @ Feb 25th 2009 4:41PM
I don't disagree that an employment lawywer may be needed at some point, but my suggestion really is that one starts with a bankruptcy lawyer. At this stage, the question of what exmployees are owed (e.g., whether they are entitled unpaid PTO) and whether their claims are entitled to priority is a question of federal bankruptcy law. The federal bankruptcy statute provides a priority claim for wages and severance, but does not define either wages or severence. While state law generally controls rights of parties even after a bankruptcy filing, I'm not so sure that the Bankruptcy Courts haven't construed the statute broadly such that the definitions of wages and severance reach beyond more limited state-law definitions. While the answer may be that federal bankruptcy law defers to state law to determine if something is a wage, I wouldn't concede that point at this time.
ScottG13 @ Feb 25th 2009 3:14PM
Could Sumner Redstone be the lousiest sack of shit to be currently affecting our industry?
I guess some might argue Bobby Kotick.
Sumner is like the anti-Phil Harrison. Instead of fixing things, he turns them to shit. Everywhere he is, bad decisions are sure to follow.
Iain Howe @ Feb 25th 2009 7:05PM
Sadly, your only recourse may be the contents of the IT department and any art on the walls that you like...
Pan1c42 @ Feb 25th 2009 7:32PM
This is what is known as a "Dick Move"