The Review has learned that James A. Vaden and Kevin C. Young, both former employees of DeKalb Telephone Cooperative (DTC), have filed suit against the co-op and Ceo Craig Gates for allegedly denying them employee benefits.
The suits both claim authorities are exploring criminal charges of extortion against Gates based on his actions leading up to the termination of Young, Vaden and their co-workers.
“As of the date of filing this complaint, investigators in the 13th and 15th Judicial Districts of Tennessee are exploring criminal charges of extortion against Gates based on his actions leading up to the termination of Mr. (Young-Vaden) and his co-workers, focusing in particular on the specifics of the Agreement of Suspension,” both suits read.
Both actions are filed against “DeKalb Telephone Cooperative, Inc., d/b/a DTC Communications (“DTC”) and Craig Gates, pursuant to Sections 502(a) and 510 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. 1132(a) and 1140, for wrongfully interfering with employee benefits and for improperly denying severance benefits.”
Both suits allege that the men were terminated for “failing to accept the extortionary terms” of an agreement of suspension they claim Gates presented to them.
The suit filed by Vaden reads:
“Mr. Vaden began working for DTC on Sept. 22, 1997 as a lineman on the line crew, installing, repairing, and replacing the external lines and related equipment that send telecommunications signals directly to consumers’ homes. He was employed by DTC as a lineman until he was terminated on April 3, 2012, at which time he was earning $21.97 per hour.
“As a lineman, Mr. Vaden’s job duties included tearing down old cables and poles and disposing of them. Some of the cable wiring was made of copper. Linemen tore down and disposed of cable as instructed by their supervisor.”
The suit by Young reads:
“Mr. Young began working for DTC on in February of 2000, where he worked as an installer and repairman. In 2003 he was transferred to the line crew where he worked as a lineman, installing, repairing, and replacing the external lines and related equipment that send telecommunications signals directly to consumers’ homes. In 2009, Mr. Young was made the network administrator at DTC. He was employed by DTC in that capacity until he was terminated on April 3, 2012, at which time he was earning $26 per hour.
“As a lineman, Mr. Young’s job duties included tearing down old cables and poles and disposing of them. Some of the cable wiring was made of copper. Linemen tore down and disposed of cable as instructed by their supervisor.”
Both suits are nearly identical from that point, reading:
“Upon information and belief, during the year 2007, some DTC employees realized that scrap-copper could be sold, and so they began selling scrap copper cable at a scrap yard. Mr. Young was not involved in this scrap copper selling, nor did he have knowledge of it at that time.
“Upon information and belief, prior to this time, the cost of collecting and selling copper would have been equal to or greater than any profit received from its sale, and so DTC had no reason to object to employees selling said scrap copper.
“Upon information and belief, DTC had no policy in place in 2007 concerning the proper procedure for disposing of copper scraps. If such policy existed, Mr. (Young and Vaden) was not, and still is not, aware of it.
“Eventually, as the price of copper increased, DTC began selling all the copper scrap itself, and employees were instructed to refrain from selling copper wiring individually.
“Upon information and belief, all but one employee complied with those instructions.
“On or about Sept. 17, 2011, Craig Gates (“Gates”) became the new chief executive officer of DTC. Upon information and belief, this change in leadership was prompted by DTC’s declining financial health.
“At some point after Gates arrived at DTC, an employee, Tom Irwin, was caught allegedly taking copper scrap that belonged to DTC. A criminal investigation followed and is still pending.
“Faced with rising payroll costs and a number of employees nearing retirement age, Gates used this incident with Mr. Irwin as an excuse to investigate and eventually terminate many of the other employees who were working as linemen back in 2007, including Mr. (Young-Vaden).
“Gates implicated nine employees who had been on the line crew in 2007. In late March 2012, Gates summarily terminated two of those employees, Dale Myers and Luke Judkins. Upon information and belief, at the time of his termination, Dale Myers had been employed at DTC for approximately 34 years and Luke Judkins had been employed at DTC for approximately six years.
“On March 29, 2012, Gates gathered the remaining seven employees and interrogated them all separately. On April 2, 2012, Gates presented at least four of them, including Mr. (Young-Vaden), with an identical document, entitled Agreement of Suspension. Gates gave them the choice of signing it or being terminated.
“Among other things, the Agreement of Suspension required Mr. Young and his co-workers to admit committing theft in 2007, repay $700, plus interest calculated at the usurious rate of 20 percent accruing since 2007, and accept a six-week unpaid suspension of employment.
“Even more egregiously, the Agreement of Suspension also substantially reduced employee benefits to which Mr. Young and his co-workers were entitled or would have become entitled, such as:
“a. The Agreement of Suspension required Mr. (Young-Vaden) to waive the employee grievance procedure provided to employees, as outlined in DTC’s Employee Handbook.
“b. It suspended accrual of all employee benefits during the period of suspension, including health and pension benefits.
“c. It required Mr. (Young-Vaden) to accept re-employment after the period of suspension as “new hires” for any and all benefits available to them as employees. This provision would have eliminated vested pension benefits to which Mr. (Young-Vaden) was entitled by law. It would have also eliminated the vacation and sick time that Mr. (Young-Vaden) had accrued during the course of his employment.
“d. It also required Mr. (Young-Vaden) to accept a 10-percent decrease in pay upon re-employment.
“Those employees who signed the agreement – thereby admitting to theft from the company – were allowed to keep their jobs. Those who maintained their innocence and refused to sign, including Mr. (Young-Vaden), were terminated.
“Maintaining his innocence of any alleged theft or impropriety, and unwilling to be wrongfully deprived of his employee benefits, Mr. (Young-Vaden) refused to sign the Agreement of Suspension. He informed Gates of his decision not to sign on April 3, 2012, and he was terminated on the spot.
“Through these actions, defendants  either terminated the employment of or cut the salary and benefits of at least five of the six highest paid members of the line crew, in addition to the network administrator.
“By his actions, ostensibly based on the copper-scrap sales of 2007, Gates accomplished the expense reduction of a company-wide lay off without having to provide severance benefits to the terminated employees or incur the increased cost of unemployment insurance coverage.
“During the investigation period from March 29, 2012 until April 3, 2012, and in the time since then, defendants have uncovered no evidence of Mr. (Young-Vaden)’s involvement in the copper scrap sales, because no such evidence exists.”
The Review could not reach DTC officials for a comment as of press time.