Oregon Labor Commissioner Brad Avakian praised an Oregon Supreme Court’s decision in Blachana v. BOLI, a significant victory for the agency’s ability to collect wages owed from a successor to a closed business that has registered with the state under a new name.
The Oregon Department of Justice represented BOLI in the case, with the Oregon Trial Lawyers Association submitting an amicus brief on the agency’s behalf.
In 2006, NW Sportsbar, LLC of North Portland went out of business, failing to pay four employees wages to which they were entitled. After the employees filed wages claims with BOLI, investigators determined that the employees were owed $7,047 for the last 60 days of work. BOLI paid the claims through the agency’s Wage Security Fund and then notified the newly formed business entity, Blachana, that it was responsible for the wages given that it was doing essentially the same business as its predecessor.
The ruling affirmed BOLI’s interpretation of the “successor in interest” test under ORS 652.310(1) and that the agency correctly applied its evaluation to the facts of the case.
“The decision is a major victory for our ability to protect workers and ensure that employers, not taxpayers, are responsible for unpaid wages,” said Labor Commissioner Avakian. “When a business fails to pay its employees, it cannot avoid responsibility by simply re-registering with the state under a new name when, in fact, it’s essentially the same operation. This ruling supports our efforts to hold employers responsible while providing a level playing field for the vast majority of employers that play by the rules.”
Oregon’s Wage Security Fund helps employees qualify for payments of wages earned during the 60 days preceding a business closure in which the employer is financially unable to pay all wages due. BOLI may pay a maximum of $4,000 to an individual worker. The fund is financed through a diversion of three cents per $100 of the state’s employment tax paid for one quarter (three months) every odd-numbered year.
After BOLI distributes payments from the Wage Security Fund, the agency seeks to recover the wages owed from the business or its successor. Today’s ruling will help the agency collect wages when an employer has re-registered the business under a new name.
This Oregon Supreme Court decision is unrelated to a separate BOLI investigation that found that the same North Portland bar violated the Oregon Equality Act of 2007 when it discriminated against its patrons based on gender identity. In that case, bar owner Chris Penner left a voicemail asking a group of transgender patrons to stop visiting the establishment because he didn’t want the P Club known as a “tranny bar” or “gay bar.”
For more information about BOLI’s efforts to protect Oregon employees and support Oregon employers, please visit http://www.oregon.gov/BOLI. A copy of the original Blachana Final Order is available upon request.
