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How United Furniture went from state-funded darling to coldly laying off 2,700 workers

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How United Furniture went from state-funded darling to coldly laying off 2,700 workers

United Furniture Industries — the Tupelo-based furnishings manufacturer that recently laid off its entire staff via email and text message – received more than $3 million dollars in taxpayer money through business incentive grants since 2009.

The furniture company regularly got sums every few years — ranging from $200,000 to $1.3 million — in exchange for the promise to create jobs.

It was the largest employer in Monroe County. Now, its owner is missing and its former employees are filing lawsuits and hunting for new jobs.

“It’s a disgrace is what it is,” Jackson-based attorney Phil Hearn told Mississippi Today. Hearn is leading a class-action lawsuit on behalf of hundreds of workers.

United was an anchor of the furniture manufacturing hub of Northeast Mississippi — among the dozens of companies benefitting from decades of tax breaks to do business in-state. The companys buildings in Lee County were free from local and state property taxes, another incentive perk. It also likely saved massive amounts of money on its payroll taxes as part of a job creation rebate program and tax credits from a special program for upholstery companies.

When then-Gov. Phil Bryant announced that United would get more than $1.3 million to support an expansion in 2013, he called the manufacturer “a valued business partner for the State of Mississippi.”

In 2015, the company got $500,000 more with similar fanfare. Then, $200,000 the next year and another promise of 100 new jobs. Both the most recent grants were awarded through the state’s “ACE” program – commonly referred to as “deal closing funds” when competition is fierce.

Every celebrated announcement touted jobs, partnerships and keeping Mississippians at work in the furniture industry.

But with one email to 2,700 employees overnight a few days before Thanksgiving, that long-standing partnership shattered. The company wasn’t just closing – it was already closed. No federally-mandated warning to employees that layoffs were coming. No announcement of a sale. No filing for bankruptcy.

Just closed.

Hearn said in his three decades as an attorney handling employee rights cases, he’s never seen anything like this: a total disregard for labor laws, no planning, and limited information available to workers.

“I’ve been with the company through several owners and names,” line worker Jeff Jones told the Daily Journal. “We’ve always bounced back. In the email they made it perfectly clear there’s no bouncing back from this.”

Jones worked for United Furniture for more than 30 years.

Hearn said the state’s history of supporting the company gave employees a sense of security that made the sudden collapse even more shocking.

“It can be difficult to evaluate some of these incentive programs for various reasons,” said State Economist Corey Miller. “A number of companies that get them get more than one incentive, and it’s difficult to untangle the impact of each one.”

Miller said in the case of United, the company’s sudden fall doesn’t mean the millions the state put up to support the company were for nothing.

“I don’t think they necessarily weren’t worth doing,” Miller said. “I haven’t evaluated the whole situation, but it’s possible because they were around for a while, people had jobs, that the state got some return on investment.”

United Furniture was created after a merger between three companies in 2000: Comfort Furniture, Parkhill Furniture and United Chair. Comfort Furniture, the leading of the three, was founded in Mississippi in 1983.

Over the 2010s, the company regularly received state-funded support in grants through the Mississippi Development Authority. In addition to grants, the company was also certified to participate in the state’s Advantage Jobs Incentive Program, which allows companies to have up to 90% of payroll taxes withheld for up to a decade dependent upon the number of jobs it created.

In 2020, the revenue department projected the total cost of the program would be about $18 million and covered a dozen companies in 10 counties – including in counties that were home to United facilities.

Another tax credit program, specific for upholstery companies such as United, allows them up to $2,000 job tax credit per position created since 2010 and covers up to 100% of their income tax liability.

But any details about if United – or any one company – took advantage of either programs and to what extent isn’t public, according to the state Department of Revenue.

By 2017, United had about 3,500 employees and facilities in Nettleton, Tupelo, Okolona, Sherman, Vardaman, Amory and out-of-state facilities in North Carolina and California. The company took over a Belden factory that belonged to a competitor, buying out the Lane brand for an undisclosed amount.

But in July of this year, United announced it was laying off 300 people and closed its Amory plant because it was turning the facility into a distribution warehouse. After the layoffs, the company still had 17 facilities (including one in Vietnam) and about 2,700 employees.

“Our team is committed to the long-term success of our company,” then-Chief Executive Officer Todd Evans said in a statement at the time. “That commitment requires right-sizing at the present time. We are confident that the product, sales, and operational plans that we have established will provide for a successful future.’’

But that success didn’t come.

Miller, the state economist, said the United situation seems like more of an outlier — not an indication Northeast Mississippi’s furniture industry as a whole is in danger.

There has been some slow down industry-wide, Miller said. Companies aren’t seeing the same high demands for home furnishings they were during the pandemic. But most companies aren’t at a crisis level.

The larger economic impacts to the Monroe and Lee counties will depend upon how quickly workers are in new jobs, Miller said.

Nettleton-based furniture manufacturing company Homestretch Furniture hired 15 former United workers at a recent job fair. Ashley Furniture, another company with local manufacturing, has also recruited workers.

MDA declined to make any comments specific to United or its past grants, but Deputy Director Laura Hipp said in a statement that the state agency will “work with local economic development partners on how the needs of the area can be supported.”

Hearn, the attorney, said he’s seen entire families devastated: five brothers who all worked for United, a mother and two daughters – one pregnant – now without health insurance.

His clients largely fall into two categories: eager for another furniture job because it’s all they know, or eager for a change because they’re terrified the same thing will happen at another plant.

His clients range from executive-suite workers to line workers and truck drivers.

“They all have one thing in common,” he said. “They’re scared to death.”

Had United followed Worker Adjustment and Retraining Notification (WARN) laws, it would have given employees 60 days notice before the massive layoffs.

The decision to shutter the company came from Stage Capital LLC, the company’s owners. Head of Stage Capital, David Belford, has been missing since the email closing the company went out.

Hearn said he’s heard company rumors the millionaire – or possible billionaire – ran off to Paris.

United is now facing three class-action lawsuits – which a judge could roll into one case – that accuses the company of failing to follow the WARN Act and still owing workers their last week’s paycheck.

“I’ve never seen anything so callous,” Hearn said.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi Today

Medicaid advisory committee again delayed over concerns about federal law compliance

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mississippitoday.org – Gwen Dilworth – 2024-11-12 12:59:00

The next meeting of a committee tasked with advising the Mississippi Division of Medicaid will be delayed further while the agency sorts out a possible discrepancy between state law and new federal regulations, despite the fact that the state is not required to comply with the new rules until July of next year.

The Division of Medicaid requested an official opinion on the conflicting federal and state guidelines for committee appointments from the Attorney General’s office on Nov. 1, according to the agency’s website. The division did not respond to Mississippi Today’s questions about why it sought the opinion.

The committee, made up of doctors and other Medicaid stakeholders, has not met statutory requirements for years. It has not produced mandatory annual reports since 2018 and has not held its required quarterly meetings since December 2023. 

Pediatrician Dr. David Reeves chaired the committee from July 2021 to the end of last year. No one told him the committee needed to produce annual reports, and when he followed up about a special meeting planned for January of this year, agency officials told him the committee’s term had expired, Reeves told Mississippi Today.

After committee members at the December 2023 meeting made a motion to recommend a policy that would allow eligible low-income pregnant women to get prenatal care earlier, then-Medicaid Executive Director Drew Snyder and committee member and Gulfport Memorial President and CEO Kent Nicaud said the agency had not had enough time to study the issue and suggested the committee reconvene in January. 

But Rep. Missy McGee, R-Hattiesburg and chair of the House Medicaid committee, had asked committee members and the Division of Medicaid to offer an opinion on the policy in advance of the 2024 legislative session in August 2023, Mississippi Today reported

The special meeting called for January never happened. The Legislature eventually passed the policy, called presumptive eligibility for pregnant women, in late February without feedback from the committee. 

Committee meetings this year were first stalled because appointments were not finalized until August of this year. Then, the agency canceled an October meeting without rescheduling it to give the division time to transition to new leadership after former Executive Director Drew Snyder announced his resignation

New federal regulations that require members of the Medicaid Advisory Committee – formerly known as the Medical Care Advisory Committee – to be selected by the director of the Division of Medicaid went into effect in July. But, the new rules are not applicable until 2025 to give states time to make changes.

In contrast, Mississippi law states that at least 11 committee members be appointed by the governor, lieutenant governor and Speaker of the House. Members serve four-year terms, concurrent with legislators.

“There is reasonable concern that some or all of the current Committee appointments may not be valid because members were appointed by state officials pursuant to Mississippi statute that may be contrary to federal regulation,” said Deputy Administrator of Health Services Tracy Buchannan in a letter to appointed committee members Nov. 1. 

The new federal policy seeks to heighten the role that beneficiaries play in shaping Medicaid programs and policy by mandating the creation of a Beneficiary Advisory Council composed of Medicaid members, their families and caregivers. Some of the members will serve on the Medicaid Advisory Committee. 

Mississippi Medicaid spokesperson Matt Westerfield previously told Mississippi Today the Division of Medicaid expects to begin selecting members for the council in coming months.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Despite bribery charges, Mississippi prosecutor, other officials can remain in office

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mississippitoday.org – Caleb Bedillion, The Marshall Project – 2024-11-12 11:00:00

Sweeping corruption charges have rocked local government in Mississippi’s capital city, with potentially significant implications for the local legal system. 

During arraignments on Thursday, federal prosecutors charged Hinds County District Attorney Jody Owens, Jackson Mayor Chokwe Antar Lumumba and Jackson City Councilmember Aaron Banks with a string of bribery and corruption charges.

All three pleaded not guilty and were released pending trial.

The charges stem from an undercover sting operation in which FBI agents posed as real estate developers and allegedly provided bribes to win the support of local officials.

Former Jackson City Councilmember Angelique Lee and local businessman Sherik Marve’ Smith previously pleaded guilty to corruption charges as part of plea agreements. 

All three officials charged Thursday have influence over the local legal system in Mississippi’s largest city and county. Owens is the county’s prosecutor, with sweeping power over felony prosecutions in a county that has struggled with violent crime, a backlog of cases and a troubled jail. 

Lumumba appoints the Jackson police chief. Lumumba has fought against the creation of a state-controlled police force with jurisdiction within certain areas of the city, as well as a special state-controlled court for those areas. His beleaguered legal position may only strengthen the efforts of statewide leaders to exert more control over local policy within the state’s capital city.

Banks, as a councilmember, votes to confirm or reject Lumumba’s appointments, including police chief. The city council also sets the budget for city government departments, including the police department and the municipal court. The Jackson City Council can also impose other policies, including a controversial youth curfew policy that came earlier this year.

Can Owens, Lumumba and Banks remain in office while facing criminal charges?

Yes. While the Mississippi constitution forbids anyone who has been convicted of almost all felonies from holding elected office, nothing requires a person to resign or take a leave of absence from their job before a conviction. 

Owens on Thursday indicated no plans to resign. Instead, he said he would fight what he called a “flawed FBI investigation” and said, “I’m going to get back to protecting Hinds County and being the district attorney that you elected me to be.”

Owens’ predecessor, Robert Shuler Smith, faced multiple state criminal prosecutions during his tenure in elected office and never resigned. None of the charges brought against him by then-Attorney General Jim Hood ended in a conviction.

In 2016, then-state Rep. Nick Bain filed a bill that would have created a process to remove local officials from office following an indictment, but that bill never advanced. 

The state constitution allows people convicted of manslaughter and state or federal tax crimes to hold elected office. 

What happens if Owens resigns?

Owens was most recently elected in 2023 for a four-year term that began January 2024 and will run through the end of 2027. If he’s not convicted before then, he can complete the entire term and even qualify for reelection again. If he were to be convicted or plead guilty before the end of 2027, he would be removed from office.

On Thursday, U.S. District Court Judge Daniel P. Jordan set a trial date for Jan. 6, but delays in criminal cases are common.

If Owens resigns or is removed with more than six months remaining in his term, Gov. Tate Reeves will appoint someone to replace him until a special election can occur. Special elections to replace a district attorney generally occur as needed in November of each year. 

If Owens were to resign now, that means a gubernatorial appointee would serve as Hinds County’s district attorney for a year until a special election in 2025. Any qualifying candidate could run in the special election to fulfill the term, including the gubernatorial appointee. 

If Owens were to resign or be removed from office with less than six months remaining in his term, the governor would simply appoint someone to fulfill the term and the winner of the regularly scheduled general election would take office at the beginning of the next term. 

What would happen if Lumumba or Banks were to resign or be removed from office?

The current terms of both Lumumba and Bank conclude next year, with municipal general elections set for June and new terms beginning in July.

Lumumba said on Thursday that he will continue to run for reelection. Banks declined to answer questions about whether he intends to remain in office or to seek another term.

If either Lumumba or Banks were to resign with less than six months remaining in their term, state law requires that the Jackson City Council would replace either with interim appointments who would serve the remaining months of the terms.

If either man were to resign or be removed before the end of 2024, the City Council would have to order a special election to fill the vacant posts.

Can voters recall elected officials in Mississippi?

Mississippi does have an obscure and very roundabout recall process, but only for county officials, despite several unsuccessful efforts to expand the law. State Sen. Jeremy England, a Republican from the Gulf Coast, has filed some of those bills, and said he did not think a district attorney could be recalled under the current law, but they could have been recalled under a bill he has filed before. 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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On this day in 1914

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mississippitoday.org – Jerry Mitchell – 2024-11-12 07:00:00

Nov. 12, 1914

Civil rights leader William Monroe Trotter pictured in 1915. Credit: Wikipedia

Civil rights leader William Monroe Trotter led a delegation that confronted President Woodrow Wilson. 

Raised in Hyde Park, Massachusetts, Trotter had more education than the president. He had graduate and postgraduate degrees from Harvard University, where he became the first Black member of Phi Beta Kappa. 

“New Englanders liked to talk as if ‘the Negro problem’ afflicted only the South,” The New Yorker wrote of him, “but Trotter looked around his beloved Boston and saw segregation in the city’s churches, gyms, and hospitals. This ‘fixed caste of color’ meant that ‘every colored American would be a civic outcast, forever alien in public life,’ he wrote.” 

In 1901, he started The Guardian with the motto: “For every right, with all thy might.” The newspaper called itself “an organ which is to voice intelligently the needs and aspirations” of Black Americans.” 

Both he and his wife, Deenie, published The Guardian each Saturday, only missing two issues: “The Trotters had no children and did not want any; The Guardian was their child.” 

In their pages, Trotter leveled vicious attacks against Booker T. Washington and his accommodation policies, calling him “the Great Traitor.” When Trotter began to question Washington at a gathering of 2,000, a fight broke out, which became known as “the Boston riot,” and he was arrested, spending 30 days in jail. The wealth his family once enjoyed turned to poverty because of the money he sunk into his newspaper. 

“It has cost me considerable money, but I could not keep out of it,” he wrote. “I can now feel that I am doing my duty and trying to show the light to those in darkness and keep them from at least being duped into helping in their own enslavement.” 

He turned his attention to political candidates he felt would support African Americans and began backing Wilson, whom he met and shook hands with in 1912 “with great cordiality.” 

A year later, he and Ida B. Wells and other civil rights leaders expressed dismay over the reinstitution of Jim Crow and even shared a chart that showed which federal offices had begun separating workers by race. 

In 1914, Trotter and other Black leaders appeared at the White House with 20,000 signatures, demanding an end to Jim Crow in federal offices. The leaders told Wilson they felt betrayed because they had supported him in the election, and he had since reinstituted segregation in the federal government that included separate toilets and dismissed high-level Black appointees. 

“Only two years ago you were heralded as perhaps the second Lincoln,” Trotter said, “and now the Afro-American leaders who supported you are hounded as false leaders and traitors to their race.” 

He reminded the president — who had been busy championing his “New Freedom” program to restore fair-labor practices — that he had promised to aid Black Americans in “advancing the interest of their race in the United States. … Have you a ‘New Freedom’ for white Americans and a new slavery for your Afro-American fellow citizens? God forbid!” 

Wilson responded that “segregation is not humiliating but a benefit” and that he had put the practice back in place because of friction between Black and white clerks. Trotter challenged this claim, calling Jim Crow humiliating to Black workers. 

Wilson stuck to his guns, telling Trotter that if he and other Black Americans think “you are being humiliated, you will believe it.” The exchange lasted 45 minutes, and the president challenged Trotter’s “tone” as offensive: “You have spoiled the whole cause for which you came.” 

The civil rights leader responded, “I am pleading for simple justice. If my tone has seemed so contentious, why has my tone been misunderstood?” 

The argument landed on the front page of The New York Times. During World War I, the State Department refused to give Trotter a passport to Paris. To get around the restriction, he took a job as a cook on a freighter to France, and when he began reporting on the plight of Black soldiers, French newspapers shared his reporting, and he spoke there about discrimination against African Americans. 

When Trotter returned home, he was welcomed by 2,000 supporters. He unsuccessfully championed a section added to Wilson’s 14 Points for peace that would say, “The elimination of civil, political, and judicial distinctions based on race or color in all nations for the new era of freedom everywhere.” 

Trotter helped found the Niagara Movement, a forerunner of the NAACP. The civil rights organization adopted his proposal to address segregated transportation as a grievance, but the group rejected his proposal to make lynching a federal crime. 

He championed cases the NAACP was slower to pursue, including Jane Bosfield, a Black woman was told she could only work for a Massachusetts hospital if she ate separately from her white fellow workers. 

When the racist movie, ‘The Birth of a Nation’, appeared on a screen, the national NAACP tried to raise money for a rival film to counter those lies, but Trotter believed in direct action. His protests succeeded in shutting down a play that was the basis for the movie, which depicted Klansmen as heroes. After failing to halt the debut of the film in Boston, he teamed up with Roman Catholics to get a revival showing canceled. 

His tactics were later used by the modern civil rights movement “to integrate lunch counters, buses, schools, and other essential spaces,” The New Yorker wrote. And his mindset “incubated the politics of Malcolm X and of the Reverend Martin Luther King Jr.” 

A multicultural center at the University of Michigan bears Trotter’s name, and his first home in Dorchester is now a National Historic Landmark. He made the list of the 100 Greatest African Americans.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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