CINCINNATI — A federal lawsuit could bring a new round of money trouble to Union Institute & University, where employees received payments April 10 to make up for two paychecks missed in the month of March.
The lawsuit, filed April 11 by Union Institute employee Marie McGonegle, alleges the school violated state and federal law by not paying hourly workers after Feb. 24 and salaried workers after March 10. It seeks liquidated damages of up to three times minimum wage for employees who opt into the case.
Union Institute employees received payments this week to cover their past-due wages from March, according to internal emails provided to the WCPO 9 I-Team by Union Institute employees. President Karen Schuster Webb told employees to expect a combined paycheck for April wages.
“We are continuing to play catch-up the best we can,” Webb wrote in an April 12 email to workers. “The April 7th and April 21st payroll will be paid to all employees at the end of April. The exact day is not yet known, but as soon as it is, I will relay that information to you.”
The lawsuit names only McGonegle as a plaintiff, but it seeks to form two groups of employees that would pursue state and federal claims against Union Institute. Those claims could be amended to cover late payments in April and beyond, said Matthew Okiishi, an attorney who filed the lawsuit on McGonegle’s behalf.
Webb has not responded to questions about the lawsuit or payroll problems, which her emails blamed on unpaid tuition and delays in receiving federal funds.
One of Union Institute’s lenders, Phoenix-based ERC Advance Funding, told the I-Team last week that it provided a $1 million loan and offered additional financing. In exchange, the company said it would claim a percentage of a roughly $3 million payment Union Institute is expecting from employee retention tax credits.
“We get paid back when they get the IRS check,” said Eric Stenson, CEO of ERC Advance Funding’s corporate affiliate, Stenson Tamaddon LLC. "I think it could be a useful partnership because we have hundreds of employees and would like to do some continuing education for them.”
