Duraco workers on quest to recover money after factory closing

A giant photocopied bounced check hanging on the wall at the Rolling Meadows' office of the Chicago Workers Collaborative serves as a frustrating reminder for Kim Cambra.

Cambra maintained the computer systems for Duraco Products Inc., a Streamwood factory that molded plastic gardening items like watering cans. The 500,000-square-foot factory closed after filing for bankruptcy in February. Cambra enjoyed her job, which she depended on to keep food on the table as a single mother of two. Her wages also helped her with mortgage payments on the family's home in Elmhurst.

Then last September, a $968.45 paycheck bounced, leaving her behind on her mortgage payments and without money for her children's Christmas gifts, she said.

But she says it wasn't the first time it happened. Cambra and a group of her former co-workers say the factory's owners, Michael W. Lynch, of Lake Forest, and his brother, Kevin P. Lynch, who's lived in Chicago and Prospect Heights, routinely withheld paychecks or issued ones than bounced beginning in 2008, when the company first filed for Chapter 11 bankruptcy. The workers have filed a lawsuit in hopes of getting their pay.

Workers said they threatened to quit after they didn't receive their paychecks, but were told if they did they wouldn't be paid back wages. For workers like Cambra, the need for back wages provided motivation to stay. Overall, Cambra claims Duraco owes her $6,250 in unpaid wages.

Cambra's working again, but she still needs the money, as she's late with the mortgage payments and the bank could foreclose.

"These guys actively coerced us and convinced us to keep working and gave us these checks to lead us on, drag us on, and we can all testify to that," she said.

The Lynch brothers couldn't be reached for comment. Attempts were made to contact them through their attorneys, who did not return calls.

When the lawsuit was first filed, Michael W. Lynch denied any involvement with payroll and said he was only assisting his brother in operating the company. He added that he and his brother didn't take a salary in recent years.

Cambra and 33 other former Duraco workers filed the lawsuit in March against Duraco and the Lynches seeking to recover $200,000 to $500,000 in lost wages and damages.

At the company's peak, it employed about 200, but that number had been dwindling with time. Cambra said some workers were fired. Other were fed up and left after not being paid, she said.

One of those workers who said she left after the Lynch brothers stopped paying her is Brenda Rodriguez.

"I was tired of listening to everyone complain," said Rodriguez, who spent six months as a machine operator at Duraco. "Some people would cry, some people were worried that they might lose their house. They didn't have any food to feed their kids."

Rodriguez, who lives with her parents in Hanover Park, said she's owed $750. She had ambitions of saving for college, but she's currently unemployed. She contacted the Chicago Workers Collaborative, an organization that works with low-wage workers and immigrants on employment rights, and said she is prepared to wait out the lengthy legal process.

"I'm just patient right now. If nothing happens, I don't get anything out of it, at least I know I tried," she said.

The Chapter 11 filing, under which a company seeks to continue operating, was converted when the company closed down to a Chapter 7 bankruptcy, in which the company's assets are liquidated to pay debts. Secured creditors, such as lenders, are paid before unsecured creditors, who include workers and suppliers.

After creditors are paid and debt is settled, there won't be any money remaining to pay workers' wages, said Christopher J. Williams, executive director of the Working Hands Legal Clinic in Chicago, which is representing the workers in court. The Lynches said in court documents that Duraco's assets were under $50,000 and its liabilities were between $1 million and $10 million.

Owners of an incorporated business are generally protected from personal liability. Williams said the workers are trying to hold the Lynch brothers culpable, going after their personal assets based on the record of bounced checks and testimony from employees. Bankruptcy documents show Duraco claims about $2.7 million in debts, but that list doesn't include any money owed to full-time employees. The company is up for sale. Court documents dated May 4 show that a sale for a price of $2.3 million has been approved.

Duraco was once one of the largest employers in Streamwood, standing on the 1100 block of East Lake Street. The company routinely made Crain's list of the largest privately-held companies in the Chicago area, though revenue has been steadily declining in recent years. Crain's reported the company had $71.5 million in revenue in 2005, before the Lynches purchased it. Michael Lynch has said that the company was losing money when they bought it and that they tried to save the business.

The employee complaints don't end with bounced paychecks.

Ex-employee Bill Van Dusen of Elgin, part of the group that filed the suit, said Duraco failed to give him health insurance, despite having a portion of his wages deducted as health care premiums. He said he found out he was uninsured when he went to Sherman Hospital in Elgin for the treatment of chronic nose bleeds.

Van Dusen, who worked for Duraco for 12 years in the IT department, said the company owes him $33,000 in back wages and that he ran up another $22,000 in medical bills. Hospital officials reduced that amount after he told them about the situation, he said. He's now living off his retirement savings.

Tim Bell, senior organizer at the workers collaborative, called it one of the worst cases he's seen.

"The economy is so bad right now that people are willing to work on the hope of getting paid," he said.

In their search for assistance, the workers have asked the Illinois Attorney General to launch an investigation to see if criminal charges might be warranted. A spokeswoman for the attorney general's office said that the office will monitor the progress of the workers' lawsuit while determining if further action is warranted.

The workers also have filed complaints with the Illinois Department of Labor. Recovering back wages is difficult, but the workers said they are dedicated to spending the time, probably years, to see the legal process through.

Duraco workers weren't the only one affected by the company's collapse. Staff Force, a temporary-staffing service out of Schaumburg sent workers to the Streamwood factory for years. However, Kevin Dautel, who runs the firm, said he began receiving complaints about working conditions. He said Duraco then stopped paying his company. He talked to the Lynch brothers, who assured him that he would be paid, he said. That never happened, he added.

Dautel said the final straw came on a frigid day last December. His workers called and complained the heat was shut off. He drove to the factory, saw the conditions and said he decided to pull his workers out.

"They were dressed inside with full outdoor clothing," Dautel recalls.

Streamwood Village Manager Gary O'Rourke confirmed that the factory's gas was shut off for a day in December. The gas was switched back on after payment was received.

Dautel said that he's had to pay his workers from his own pocket. Court bankruptcy documents list $43,903 owed to Staff Force, though that figure is being disputed by Duraco.

The workers say they are committed to wait through the lengthy court process, and said they hope no one else has to endure the hardships they say they've suffered. They said they want to send a message that wage theft is unacceptable.

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