On the morning of July 16, workers at Progressive Gourmet were told they had to reapply for their jobs through a temporary employment agency that would not provide health insurance and other benefits they received as employees of the Wilmington specialty food-distribution company.
Those who refused to agree by 9 a.m. the next day were let go. In all, more than 70 — about one-third of the company’s workforce — lost their jobs.
These claims are part of a class-action lawsuit filed last week in US District Court in Boston, alleging that Progressive Gourmet violated the federal Worker Adjustment and Retraining Notification Act by not giving employees 60 days’ notice of the layoff. The workers also filed a complaint with the National Labor Relations Board saying that Progressive Gourmet’s move was aimed at thwarting employees’ efforts to form a union.
Progressive Gourmet’s president, Christian Collias, did not return several phone calls seeking comment.
The claims in the lawsuit, employment law specialists said, are representative of a decade-long trend in which companies have increasingly used outside contractors to shed costs and shield themselves from the responsibility of meeting wage law requirements and providing benefits. Kevin Merritt, a lawyer at Segal Roitman LLP in Boston, said he has seen plenty of companies outsource their staffing, but never one that forced its existing employees to reapply as temps.
The trend of using contractors to handle work once done by employees accelerated in recent years as the economy faltered, labor specialists say. Last summer, Texas A&M University announced that it was outsourcing its landscaping, maintenance, and dining services staff, requiring more than 1,600 employees to reapply to a North Carolina-based contractor — although the workers were guaranteed a job for at least two years, with comparable salary and benefits.
In 2009, three Hyatt hotels in Boston fired nearly 100 staff housekeepers and replaced them with lower-paid workers from a Georgia-based staffing agency.
The general manager of the temporary staffing firm contracted by Progressive Gourmet said that the food distributor did not pay his agency to provide health insurance or vacation and sick pay for the employees, although the workers would be making the same wages.
Jose Avila, general manager of the Employment on Demand Agency Inc. in Chelsea, said the Progressive Gourmet situation was a “bad experience” because the workers were angry about losing their benefits.
Avila said he was not aware the company was issuing an ultimatum to workers.
“They have a right to be upset,” he said, adding that he would avoid similar situations in the future. “I don’t like to hurt people.”
Progressive Gourmet started in 1992 and has more than 3,300 customers, according to the company website, including the Sheraton Boston Hotel, the Waldorf Astoria in New York, and other hotels and restaurants across the country. It has a 38,000-square-foot warehouse and distribution center in Wilmington, and warehouses in five other states.
Shannon Liss-Riordan, the lawyer representing the Progressive Gourmet workers, said the company turned to the temp agency in part to keep employees from organizing a union.
At a meeting in early July, according to the lawsuit, Collias, the company president, told employees that Progressive Gourmet was growing and sales were rising. But after learning that employees were considering forming a union, court records said, the company called another meeting a few weeks later.
Officials told workers that a large portion of them would no longer be Progressive Gourmet employees, and they would have to reapply for their jobs through the temp firm.
“Instead of rewarding them for their hard work that led to the company’s success,” Liss-Riordan said, “Progressive Gourmet has tossed them onto the street.”
Karla Bonilla and Arquinia Rodriguez, two of the plaintiffs in the lawsuit, worked for more than six years at the Wilmington plant, cooking meat and vegetables to be made into appetizers. Both have been applying for jobs for the past few months, they said in Spanish through a translator, but have not found anything.
“We are not making ends meet,” said Bonilla, 30, who came to the United States from El Salvador as a teenager and has two children.
Rodriguez, who has a 12-year-old daughter and owns a triple-decker in Lawrence, is also struggling to pay the bills. Rodriguez, 31, said she has worked since she was 17 years old and had never been unemployed.
“The company did not consider us as human beings,” said Rodriguez, who is from the Dominican Republic.
The women said the ideal outcome of the lawsuit would be for the workers to get their old jobs and benefits back and form a union.