Subscribe for 99¢
Human Development Corporation logo

A Human Development Corporation logo from the organization's Facebook page touting its status as a Community Action Agency.

ST. LOUIS • Dozens of employees of a collapsed social services nonprofit say that not only were they not paid for their last weeks of work, but also that money taken from their previous paychecks for health insurance, child support and taxes wasn't forwarded to the agencies due the payments.

The employees have met with board members of the nonprofit Human Development Corporation of Metropolitan St. Louis, written letters to government officials and, finally, filed a class action lawsuit in federal court in hopes they can lay claim to the corporation's last few dollars, or, if not, hold board members individually liable.

Some employees say that because of the nonprofit's actions, they owe hundreds or even thousands of dollars in child support payments, medical bills or other expenses.

"It's kind of like a snowball effect. Every time you turn around there's something HDC isn't paying," said Michele Graham, who worked as a family support specialist for a year before being laid off, and is still unpaid for her last two weeks of work.

Shamantolian Johnson, 41, can't find the life insurance plan for his mother, Gwendolyn, who died in July of liver cancer after working at the nonprofit for nearly 30 years. Now he questions whether the policy even exists.

Sherry Stennis, 56, a grant specialist, owes close to $4,000 in medical bills, on top of the roughly $1,000 she is owed in pay.

And Yolanda Holmes, 40, an outreach energy assistance supervisor, owes $49,000 in medical bills after a driver ran a stop sign in St. Louis. She and her 15-year-old daughter were rushed to the hospital.

"I was thinking that insurance bill would be taken care of," she said. Then she got another letter saying her policy ended in July. "My mouth just dropped open. According to our paycheck, we paid for that insurance."

The federal suit said former workers Michael Win, Yolanda Holmes, Sundy Whiteside, Eleanor Kim Banks and more than 70 co-workers worked without pay, weren't paid after they were laid off and lost withholdings never actually used as intended.

The lawsuit was filed Friday in St. Louis by attorneys Russell Riggan and Andrew Kuhlmann.

It calls the Human Development Corporation's collapse a "massive failure of corporate governance."

If the court declares it a class-action suit, Riggan explained, other employees will be allowed to join.

Board President Charles Barge Jr. said he hadn't seen the lawsuit but that, indeed, the nonprofit stopped paying insurance when it closed doors and did not pay taxes on at least one set of paychecks. "Money ran out," he said.

He said the board has voted to begin liquidating assets. "I want to get the employees paid more than anything else," he said.

The nonprofit had been one of the largest federally authorized Community Action Agencies in the state, with a staff of about 80 and services to nearly 100,000 area residents a year.

It received about $12 million a year in federal grants to provide employment, health, rent, utility and emergency food assistance for low-income residents in the cities of St. Louis and Wellston.

It closed its doors at the end of August. Letters between the board and the Missouri Department of Social Services reveal more than $1 million in overdue payments to employees, contractors and creditors.

Of that, the nonprofit failed to pay at least $650,000 collected from the state that should have been used to cover utility costs for thousands of low-income St. Louisans, the documents show.

In September, President and CEO Ruth A. Smith stepped down, following accusations that she had paid her live-in boyfriend $10,000 a month to do maintenance and janitorial work.

The state has since transferred program responsibilities to Community Action Agency of St. Louis County Inc.

Some of the agency's debts, Barge said, have now been paid off. But employees, he admitted, still haven't gotten checks.

Last month, 30 of them met to put pressure on the board.

They penned letters to U.S. Sen. Claire McCaskill, Gov. Jay Nixon, city Aldermanic President Lewis Reed, Mayor Francis Slay and all of the agency's board members, said Kim Banks, who said she was appointed by the group as a spokeswoman for the effort.

"We sat back for a month and a half, and said, let's just wait and see if the board is going to try to do what's right by us," she said. "I am frustrated."

As far as employees can piece together, she said, withholdings stopped getting paid at the end of July.

"Everyone who's had either a doctor's appointment or surgery in the month of August is now receiving a bill from that particular visit," she said.

And meetings with the agency board were not helpful, she said: "Because one thing I can say is they were pretty clueless. They kept telling us, 'We had no idea it was this bad.'"

Spokespeople for Anthem Blue Cross and Blue Shield in Missouri told the Post-Dispatch the company last received full payment from the nonprofit in July, and cut services.

"It is the employer's responsibility to communicate to employees that their health benefits are no longer covered by the employer," an Anthem spokeswoman said in an email.

State leaders added that there's little they can do.

"It's an issue between the corporation, the board and its employees," said Seth Bundy, spokesman for the Department of Social Services.

In fact, he said, the nonprofit owes the state more than $680,000 for energy bill payments.

"It's a sad story. It really is," said attorney Riggan. "Unfortunately, this kind of stuff seems to have all too often, especially in this economy."

3 O'Clock Stir e-newsletter

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.