Publicly traded E-Waste Systems has been ruled in default in a lawsuit alleging the firm did not pay workers at its former Ohio processing location.
According to court documents reviewed by E-Scrap News, a total of nine employees have joined the suit, which was originally filed on Nov. 25 and alleges E-Waste Systems (EWSI) failed to pay them “and others similarly situated” for hours worked, including overtime, between Oct. 17 and Nov. 18 of 2014. The employees were then promptly laid off without warning or pay, court documents charge.
Judge Timothy S. Black ruled EWSI “in default” on Jan. 15, giving 21 days for representatives of the former EWSI employees, the national labor rights law firm Barkan Meizlish Handelman Goddin Derose Wentz, to “file a motion for final judgement” in the case. According to Black, EWSI “failed to plead or otherwise defend” itself in the case.
EWSI’s CEO Martin Nielson and his lawyer, Gary Blum, did not return a request for comment on the case or the standing of the publicly traded company.
EWSI was evicted from the Springdale, Ohio location in question in December after failing to pay rent in September and October and “refusing to leave the premises” thereafter. At the time, the public relations department for the company stressed EWSI was “committed to make a comeback in the Cincinnati area” in addition to preserving its smaller Geneva, New York operation.
Bob DeRose, the lawyer representing the former employees of EWSI, told E-Scrap News there’s reason to believe the company’s actions in Ohio “was not an isolated event.”
According to DeRose, all past employees, including those related to the company’s Geneva and global operations, could also be brought into question by the current legal battle.
“We believe their conduct was company-wide,” DeRose said. “We don’t know how many people EWSI decided not to pay. [But] our lawsuit was worded in such a fashion that it would pick up any employees subject to the Fair Labor Standards Act, in whatever location, in whatever subsidiary, that fell under its umbrella.”
The Fair Labor Standards Act (FLSA), according to the website of the Department of Labor, “establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State and local governments.”
Founded in 2011, EWSI made a name for itself by announcing a slew of international mergers and acquisitions between 2012 and 2014, many of which were promoted as moves that would substantially boost revenues. Consequent financial filings, however, indicated those actions did little, if anything, to overcome continued annual operational losses and declining stock share price. The firm announced a reverse stock split late in 2014 to raise financing for future expansions and growth.
The annual salary of EWSI’s Nielson, SEC filings show, is listed at $372,696. One other member of the executive management team, treasurer and vice president Susan Johnson, is listed with an annual salary. Hers was $86,000.
Johnson did not return a request for comment.
The company’s online list of key employees includes 15 additional “senior management” officers and advisors.
