Cody’s Books Former Employees Charge Bookstore With Contract Violation

By Riya Bhattacharjee
Monday September 29, 2008 - 04:16:00 PM

Two former employees of the now-defunct Cody’s Books have filed a complaint with the state Labor Commission alleging that the bookstore violated its contract with the Service Employees International Union (SEIU) by not paying its workers paid time off when the store closed down in June. 

Rick Valentine and Lawrence Davidson, both longterm Cody’s employees, said company officials had ignored their repeated requests this year for paid time off, telling them that the company had no money. 

Four more former employees at Cody’s backed up their claims and three of them charged the company with not paying them paid time off as well. 

According to the contract between Cody’s Books and SEIU 1020, the paid-time-off program provides for time off for short absences including vacation time, holidays, short term illness, emergencies, religious observances, preventative health care or for personal reasons. 

Unused paid time off could be paid to eligible employees at the end of the year or rolled into the following calendar year at the option of the employee up to a maximum of 120 hours. The contract states that employees will be paid all unused accrued paid time off under their current pay rate upon termination. 

Both Valentine and Davidson complained they were frustrated with SEIU’s unwillingness to answer questions about their problem. 

Sarah Sherburn-Zimmer, SEIU representative for Cody’s employees, told the Planet that Cody’s was in violation of a labor contract since it decided not to declare bankruptcy. 

Sherburn-Zimmer said that attorneys representing Cody’s had told SEIU that the company was in the process of declaring bankruptcy on June 20, the store’s last day, and had not informed the union that it had later decided against bankruptcy. 

She said that SEIU only learned about Cody’s decision during an interview with the Planet last week. 

“It was a shame that the paid time owed to employees wasn’t paid,” she said. “They outright lied to us. They told us that employees should cash their checks that very afternoon they were closing since they wouldn’t be good after they went bankrupt. They told us they didn’t have cash on hand to pay the paid time off and that we would have to fight under bankruptcy law for that money.” 

Sherburn-Zimmer said repeated phone calls to Cody’s former manager Mindy Galoob were not returned. When reached by the Planet, Galoob declined to comment saying that she was no longer employed by Cody’s. 

Sue Tircuit, who worked at Cody’s for almost 17 years, said that she also never received any of the more than 200 hours of paid time off that Cody’s owed her. Tircuit’s pay record show that Cody’s owed her 183 hours of paid time off as of March 30. 

“At the last meeting they said that we were not going to receive paid time off and apologized,” said Tircuit, who took Internet and phone orders at Cody’s and worked at the register. “Not much help when you have to pay bills. The union should have done something about that. But nobody’s talking about it. It’s a done deal. We paid all those union dues and nobody stepped up to the plate.” 

Cody’s—which owed money to a number of schools, libraries and public agencies when it shut its doors for good on June 20 due to dwindling sales—liquidated its assets in August to pay off a bank lien. 

Robert Kidd, an attorney representing Tokyo-based Intercultural Book Company (IBC Publishing Inc.), which owned Cody’s at the time of its closing, told the Planet in August that the bookstore was not declaring bankruptcy because “it wouldn’t benefit anyone.” 

Kidd confirmed Thursday that Cody’s had still not filed for bankruptcy and denied knowing anything about the unpaid paid time off. 

“If they went bankrupt they would have to pay off secured creditors first,” Sherburn-Zimmer said. “But since they didn’t go bankrupt they have a contractual obligation with employees at Cody’s.” 

Calls and e-mails to Cody’s CEO Hiroshi Kagawa of IBC were not returned. 

Cody’s, which closed its flagship store on Telegraph Avenue and branches in Fourth Street and San Francisco in recent years, moved to Shattuck Avenue in April. Founded by Pat and Fred Cody 52 years ago, Cody’s was sold to Andy Ross in 1977 and expanded to Fourth Street and San Francisco under him. 

Ross told the Planet that Cody’s was losing a significant amount of money even before it opened its San Francisco store because of stiff competition from online book businesses. 

After closing the Telegraph store in mid-2006, Ross sold Cody’s to now-defunct Yohan Inc., a Japanese book distributor whose president was Kagawa. According to an article in Publisher’s Weekly, Yohan—a 55-year-old company which was 6.5 billion yen (around $62 million) in debt—declared bankruptcy on Aug. 1. 

The article said IBC, which was founded in 2003 and was a part of Yohan until it broke loose in fall 2007, was unaffected by the bankruptcy and currently owns Berkeley-based Stonebridge Press, which was previously owned by Yohan. 

IBC’s website (www.ibcpub.co.jp) lists Kagawa’s wife Kyoko Kagawa as a member of its executive board and shows that the company has a capital of 30 million yen (around $286,530). Kyoko Kagawa refused comment when she was reached by the Planet in Tokyo Tuesday and directed all inquiries to her husband. 

When the Shattuck Avenue store closed down Kagawa issued a statement saying that “his current business was not strong enough or rich enough to support Cody’s.” 

Valentine, who joined Cody’s in 1995 and said he worked in maintenance, purchasing, delivery and “everything else that anybody didn’t want to do,” alleged that Cody’s owed him approximately 270 hours in unpaid paid time off, which he said translated to almost $4,671. 

“You should close the store when you have the money for paid time off and severance,” he said. “You don’t close the store by having a meeting and closing the door. I put a sign on the clock saying ‘where’s my PTO’ and they refused to tell me.” 

Davidson, who was with Cody’s for three decades working at receiving and returns, alleged that Cody’s owed him around 154 hours of paid time off as of June 19th, a day before the store closed for good. 

“I had worked in every department, I was even manager at one point and I never received paid time off,” he said. “I don’t believe any of the employees got paid time off. They gave us our last pay check and that was it. Yet, it’s in the contract, it’s something we worked hard for. It’s a matter of principal. I find it extremely unsettling that everyone is sympathizing with Cody’s saying ‘poor Cody’s’ when in reality Cody’s stole from its employees. Let the City of Berkeley know how awful Cody’s treated its people.” 

Valentine said Cody’s managers held meetings every week before the store closed assuring employees that the store would remain open until December. 

“We asked them about the low stock and why we had discontinued the gift certificates and we never got an answer,” Valentine said. 

“There were all these lay offs and very few books on the shelf,” said Davidson, describing the last few months at the bookstore. “Then suddenly we have this meeting the morning of June 20 when the management apologized to us and handed us our checks. We were all so shocked I don’t think I looked to see if we got our paid time off.” 

Sherburn-Zimmer said the union had been waiting for the two employees to file wage claims against their employers since they had been under the impression for more than two months that Cody’s had filed for bankruptcy. 

“Under bankruptcy, the employees have to file the paperwork,” she said. “But since Cody’s is not bankrupt, it has freed our hands. We can file wage claims, go to the labor board and take other actions.” 

Records obtained by the Planet of the paid time off Cody’s owed its employees as of March 30, nearly three months before the store closed down, show that the company owed at least eight of its 18 employees more than 100 hours of paid time off. 

Cody’s owed two employees—including Valentine—248 hours each, and three more employees more than 90 hours each. 

Patrice Suncircle, a former bookseller at Cody’s, said the store owed her more than 40 hours of paid time off. Records obtained by the Planet show that Cody’s owed her 48 hours of paid time off as of March 30. 

“All I know is that none of us ever received our paid time off,” said Suncircle, who has worked at Cody’s for nearly two decades. “I know I had paid time off because they put it up by the wall clock. They gave us our last paycheck on our last day and said there would be no paid time off. And I never went back. There wasn’t anybody to contact.” 

Ross said he sympathized with the workers but added that getting the money from Cody’s would be tricky. 

“The claim is against Cody’s and Cody’s is gone,” he said. “Unfortunately, Cody’s demise was very slow and painful for me and the employees. My experience when I was there was that the only choices we were given were bad choices. I am sure people were entitled to their paid time off, but it’s difficult. Most of the money Cody’s got from liquidating went to the bank.”