Eleven current and former employees of Northeast Ohio Neighborhood Health Services (NEON) have won wage theft judgments in Cleveland Municipal Court against the nonprofit.
The current and former employees filed suit in small claims court in March to recover back wages and, in some cases, receive the paid time off and/or vacation time that they are owed. All sued to recover over two weeks of back pay NEON has owed them since December, when the nonprofit failed to pay them for the final two weeks of the year.
Magistrate Leslie Wolfe heard their cases in May. Her decisions for each plaintiff, which were approved and confirmed by Judge Jeffrey D. Johnson or Judge Bridget M. O’Brien, were mailed to the current and former employees last week. The judgments range from about $1,400 to just over $5,000.
I’m thankful the court ruled in my favor because it validated that what happened was wrong. While this is an important step, I’ll be much happier when the back pay I’m owed is finally in my hands.”
Princess Cohen, who won a wage theft suit against NEON, her former employer
NEON, a network of health centers focused on providing care to low-income and underserved communities, did not contest the claims and must also pay court costs. The longer it takes NEON to pay the judgments, the more the nonprofit will owe. The court is requiring NEON to pay an annual interest rate of 7% from the date of each judgment. Most of the judgments were filed in Cleveland Clerk of Courts Earle Turner’s office the week of July 6.
Signal Cleveland contacted NEON CEO Willie Austin about the judgments, including asking when the organization intended to pay the current and former employees for their back wages. (This article will be updated when Austin or a representative responds.)
Judgment ‘validated that what happened was wrong’
The court mailed the judgment in favor of Princess Cohen’s wage theft suit last week to the former NEON employee’s home.
“I’m thankful the court ruled in my favor because it validated that what happened was wrong,” she wrote in a text message to Signal Cleveland. “While this is an important step, I’ll be much happier when the back pay I’m owed is finally in my hands.”
Getting a favorable court decision is only the first step in the quest of these current and former NEON employees to get back pay, said Andy Schumann, an organizer with the Northeast Ohio Worker Center. The worker center helped the current and former NEON employees file their wage theft claims.
“It’s not like those paychecks automatically show up in their bank accounts,” he said. “It [favorable judgment] actually only means that now they have the legal documentation that they need to actually collect those wages.”
If financially troubled NEON doesn’t pay up in a timely manner, the current and former employees may have to pursue other legal action, Schumann said. This could include placing liens on properties NEON owns, he said.
NEON faces troubled financial road ahead
NEON operates seven health centers, primarily in East Side Cleveland neighborhoods, and two mobile units. Another clinic in Hough has been closed since a 2021 fire. But it has been struggling financially for a couple of years.
NEON is embroiled in a legal battle in U.S. District Court in Cleveland with All Pro Capital, a New Jersey-based lender. Earlier this year, All Pro Capital asked the court for permission to foreclose on NEON’s properties in order to recoup the millions of dollars the health center owes the lender. (NEON owed $9.5 million in February, but that amount is continuing to increase as interest accrues.)
Last month, NEON asked the court to deny All Pro Capital permission to foreclose on the nonprofit’s properties. NEON accused the lender of “fraudulently” transferring about $4.2 million out of a bank account that the two parties shared. The lender said it took the funds after NEON stopped making payments on its loan. NEON said that, by taking the money, All Pro Capital broke the contract and shouldn’t be able to foreclose on the properties.
NEON CEO Willie Austin lied that workers had received back pay
After employees didn’t get paid for two weeks late last year, they began approaching NEON leadership about their unpaid wages. Leadership promised to pay the back wages. Cleveland’s Fair Employment Wage Board, whose duties include fighting wage theft, got involved. When Austin ignored the wage board’s request to meet about employees’ wage theft concerns, some of the wage board’s officers showed up at NEON’s Payne Avenue headquarters in February demanding to meet with the CEO.
When Austin met with them, he told them the back wages had just been paid. The wage board later learned that the NEON employees had not received their back wages. The wage board lacked authority to demand that NEON pay them because its purview over wage theft is limited to employers with city contracts of at least $75,000. NEON doesn’t have such a contract with the city.
Schumann applauds the current and former NEON employees for being persistent in their pursuit to get back pay in a legal system that he says favors employers over workers. When employers engage in wage theft, there should be a way for employees to quickly get their back pay, he said.
“Why should the workers have to fight so hard and organize themselves so effectively and diligently just to receive money for the work that they did over half a year ago?” he said.