DWD: Development Issues Payments To Former Color Arts Employees

Rose Lynch (608) 266-6753

Payment of more than $1 million distributed to 215 former employees

Madison – Department of Workforce Development (DWD) Secretary Roberta Gassman today announced that DWD has issued payments to 215 former employees of Color Arts, Inc. of Racine in the amount of $1,026,550.50 as settlement of wage claims filed by the employees and for the employer’s failure to give 60 day’s notice of the plant’s closing, as required under the Wisconsin Business Closing & Mass Layoff Law.

Secretary Gassman said. “I am pleased that the department was able to reach an amicable agreement with the financial institutions so these hard-working former employees can receive the compensation that they are due. Our workers are our greatest resource, and protection of their rights is one of DWD’s highest priorities.”

The Color Arts, Inc., plant, located in Racine, was in the business of printing signs and decals. On June 11, 2004, the plant closed its doors and the company’s 225 full-time employees were out of work. State court receivership began the same day the plant closed to liquidate assets. DWD received wage complaints from several Color Arts employees for unpaid wages and for the employer’s failure to give 60 day’s notice of the plant’s closing.

DWD opened its investigation on June 16, 2004 and moved immediately to request Wisconsin Department of Justice involvement to secure the unpaid wages.

An auction sale of substantially all assets was held on July 9, 2004. Auction results allowed the Receiver to pay the pre-filing lenders in full. DWD’s liens were entitled to next priority. After extensive negotiations, DWD agreed to accept $1,000,000 to settle all pre-petition wage claims, including potential plant closing liability. The settlement subsequently received court approval, allowing DWD to provide payment to 215 employees who agreed with the settlement.

Payments were mailed to the 215 employees on Wednesday, March 16, 2005 to the workers who chose to accept the settlement offer. The settlement represents wages due to the employees, so the standard state, federal and social security taxes were withheld from the payments. A full disclosure of all deductions was issued to the employees with the payment.