Klausner closed – Employee lawsuit filed over wages
By Tami Stevenson
The sawmill at the catalyst site in western Suwannee County, Klausner Lumber One, closed its doors on March 16, 2020, and filed bankruptcy on April 30. The company allegedly did not tell its employees ahead of time, which would be a violation of the federal Worker Adjustment Retraining Notification (WARN) Act that states they must provide 60 days advance notice of a large-scale lay-off or firing. As a result, a class action lawsuit was filed against Klausner on March 21, 2020, in the United States District Court for the Middle District of Florida in Jacksonville, on behalf of the Live Oak employees and its sister mill employees in Halifax County, North Carolina.
According to the class action document, on or about March 16, Klausner permanently shut down operations without prior notice to its employees. It states that prior to March 16, Klausner evacuated its foreign management team to Austria, with knowledge that the facilities would be closed.
The case document also states that on or about March 16, 2020, the plaintiffs and all others similarly situated were informed that the facilities were shut down and that on March 20, 2020 (the next payday) they would receive their complete wages for the past two weeks, as well as for the full week of March 16, 2020. Instead, the plaintiffs and all others similarly situated did not receive any pay on March 20, 2020, as promised, or at any time thereafter. It is also alleged employees that worked in excess of 40 hours in a workweek did not receive overtime.
In the beginning, when Suwannee County Commissioners were wanting to move forward with the catalyst site, discussing Klausner coming to Suwannee County at their meetings in 2012, residents filled Live Oak City Hall for much of the meetings. Some were there in support of the company building a promised state-of-the-art sawmill in Suwannee County at US Highway 90 West and I-10. They were hopeful, looking forward to the jobs the mill would potentially create. As a rural community, residents were tired of family members having to move away to find meaningful employment and Klausner was talking about creating 350 full-time jobs for locals (in reality it is reported they created around 250 jobs). Many attended the meetings holding hand-made signs that said things like “We want jobs.”
Others attended the meetings opposing Klausner coming, stating the tax free “ride” the county was offering them could backfire and consequently do more damage than good to the county and its residents, stating they could pick up and leave when their tax abatement had ended and taxpayers would be left with the bills.
Still other residents were torn between those for it and those against it. On the one hand, job creation and building a better workforce is vital to any community. On the other hand, the company could lay down some roots, get everyone’s hopes up, then leave when it came time to begin paying taxes and where would that leave Suwannee County and its employees?
In the midst of all the attorneys and officials speaking for and against moving forward, the then Live Oak City Council Attorney Erny Sellers said something that seemed to begin to turn the tide and settle some fears amongst residents.
During one of the 2012 meetings, Sellers came forward and, in part, said, “... This in an opportunity the county cannot afford to miss. There are always risks with everything. Every business transaction anyone has ever entered into is full of risk. The real question is do you have the ability to overcome the risk if everything goes wrong? If you don’t, then you don’t want to make the deal.” He looked at the board, “You have the ability to overcome this risk. The bottom line is, if you have a way to cover the loss if the worst happens, then take the risk.” Sellers continued, “... Take the opportunity to do good for the future. Take a gamble on the future of Suwannee County. It is not that big a risk. You can always find reasons to criticize but there’s opportunity here. We’ve been a bridesmaid too long.”
Fast-forward now eight years later – everything has gone south and the “worst” has happened. The fact remains, Sellers was right, it has not devastated the county. It has created a hardship for employees and the county but this is a hurdle that can be overcome.
Klausner’s leaving has opened a door. The state-of-the-art sawmill is still there and, according to Suwannee County Economic Development Director Jimmy Norris, they will sell the mill within 90 days. Norris told Suwannee County Commissioners during a meeting earlier this month they are hoping to complete the sale by the end of August and because the mill is already there, it may only take an additional six to eight weeks for the new owners to be running again. They are expecting the bids for the sawmill to range anywhere from $100-200 million.
It is no secret Klausner’s relationship with its employees was strained through the years. They had a poor reputation of laying off workers every few months that also left an uneasy relationship with the county as well. Officials say they are looking forward to working with a new company where its employees are not in fear of being laid off every few months.
Norris also stated at the meeting that following the sale of the sawmill, the county will receive the owed ad valorem taxes due them as they are a secured creditor.
On the road moving forward – as officials strive to create meaningful employment and a trained workforce in Suwannee County – there are some bumps along the way. But just as residents will survive the COVID-19 pandemic, Suwannee County and its residents will survive this and the majority will choose to remain hopeful.
County officials are optimistic about the future of the catalyst site and are looking forward to the new possibilities this event has opened up.