Posted on 08/05/2009 6:58:17 PM PDT by Constitution Day
For nine years, Layvonne McAuley worked her job processing returned merchandise at the Rocky Mount QVC Distribution Center.
When she swiped her security card to go to work Wednesday, it didn’t work.
She was among several hundred workers who were accused of possibly making improper withdrawals from the company’s 401(k) plan.
McAuley is livid. “This is so unjust,” she said. She said she wrote the hardship letters for the withdrawal of her own 401(k) money when she needed money for medical bills and tuition for her children. McAuley said she was embarrassed to talk to other employees about her need for the money.
“My daughter had $3,000 worth of dental work that is having to be done, which QVC is not paying,” she said. Nobody helped her write the hardship letters, which she faxed herself to the company from a grocery store, McAuley said. “I didn’t fake anything,” she said.
Some of the employees, who gathered a block away from the plant on Wednesday, said they suspect the company’s real motive is to find bogus reasons to lay off employees. “We believe there are 250 employees who are under investigation,” McAuley said. “It’s just a soft way of them lowering their employee staff.”
She said security was all over the place at the QVC headquarters on Wednesday morning. “We had so many new faces in the building, the courtyard. I didn’t know who it was – if it was FBI or secret agents. It was intimidating,” McAuley said.
Those employees whose badges did not work were directed to the human resources department. They were handed letters with the allegations and asked to set up an appointment to provide documentation to show their innocence.
In a prepared statement, QVC said: “QVC is investigating alleged irregularities regarding employee 401(k) hardship withdrawals at our Rocky Mount Distribution Center. Due to the current investigation, we cannot provide any additional information at this time.”
QVC Spokewoman Tara Hunter said she could not divulge any other details of the investigation, including the number of employees impacted.
Mike Shamrell, a spokesperson for Fidelity Investments, said he could confirm that QVC is that company’s client as it has been reported. He said he was not allowed to comment about anything else, including what hardship allowances are allowed by the employees’ plans, and whether Fidelity approved of the hardship withdrawals. “Generally, we don’t discuss any of our business activities with clients,” he said.
A letter dated Aug. 4 to the employees states the company’s case: “As you may have heard, QVC is looking into alleged irregularities regarding employee hardship withdrawals from the company’s 401(k) plan at our QVC Rocky Mount Inc. Distribution Center. This is a matter of great concern to our site and the company.”
The letter, signed by Nick Brecker of VP Total Rewards that handles human resources for QVC, gives the employee two days from the receipt of the letter to schedule an appointment with a human resources official.
“If you fail to schedule such an appointment, we will accept your inaction as your decision to voluntarily resign your employment,” the letter states.
The letter also tells the employee that if it is determined that the hardship withdrawal was improper, “you may be subject to corrective action, up to and including possible termination of employment.”
The employees are not being paid for the days they are not working.
Pamela Rand and other employees said this is causing a hardship on her family.
“I think it’s messed up,” she said.
The letter to the employees said they are allowed to pick up their paycheck today, adding “otherwise, we ask that you not frequent QVC property until your scheduled interview.”
Rand said in May, she took out a hardship 401(k) loan for $780. “My loan was to prevent eviction,” Rand said. She added that her landlord wrote the letter to justify the hardship, and Fidelity approved of it. As she looked around at other employees who had gathered outside of a flea market a block away from the plant, she said she was unaware that these co-workers also had applied for the hardship withdrawals. “I didn’t know their situation,” she said. “They didn’t even know I did a hardship (loan). But today they do because my badge was disconnected.”
Yashica Lynch was shocked at being shut out of work on Wednesday. “Nobody went in this morning expecting to voluntarily resign,” Lynch said. “We do not know who initiated this. Is Fidelity pursuing this investigation, or QVC?”
The REAL story behind this, from an insider at the QVC distribution center, is that someone in HR was taking bribes to falsify claims for 401(k) hardship distributions. Apparently there was security of all kinds there today weeding out who got the boot and who was allowed to report to work.
I have shopped on QVC, I quit when they covered Obama live...that was the END.
I have never bought anything from there. Don’t know why, just haven’t.
Why would you have to provide a hardship letter?
If you want to withdraw your 401K money you declare it as income taxable with a 10% penalty.
Simple and legal. Why would QVC care???
It’s a large company so discrimination testing should be no issue.
I am not sure.
However, I do believe that all 401(k) plans can set their own withdrawal rules, as determined by the plan administrator.
NC ping?
I find it hard to believe that it took 250 withdrawals to figure somethinmg was going on. given that the overall economy sucks, I can understand a lot of hardship cases. I wonder if the real reason is the QVC stock is about to go in the dumper and an inside person told people to get out what they could; especially if the 401(k) money was in company stock. Doesn’t explain small withdrawals, but it would large ones.
I’ve read of execs who up and quit companies in order to save rather large 401(k) accounts by transferring them out prior to their companies going in the toilet.
You raise a good point, but I don’t know about any inside information.
These, as I understand, are not exactly white-collar jobs.
This is rough! I hope the people with valid hardships are not terminated.
bttt
Yes.. some allow loans but not withdrawals. You pay yourself interest but the money you take out no longer has the earnings power it would if it’s in the account.
It’s also possible that QVC is going bankrupt and is in secret proceedings .
But 250+ out of 900? (see quote below) That's about 28%. Sounds quite suspicious to me.
Rocky Mount QVC employees under investigation
The plant, which employs about 900 people in the Rocky Mount and Edgecombe County community, has imposed a salary freeze, cut back on overtime and hours and started paying employees bi-weekly, instead of weekly, employees said.
That is true.
I took out a loan on mine so that I could bump up the down payment on my house, years ago.
Maybe they are trying to get some money out before the company goes under. The job market is not good. It would not be easy to get another job and move the 401k.
You said a mouthful there. The unemployment rate in the county this is located in is over 16%, the last I heard.
[I am not sure.
However, I do believe that all 401(k) plans can set their own withdrawal rules, as determined by the plan administrator.]
Fidelity would know the rules for this and deny the withdrawals if they were not allowed.
The TPA processed these. It sounds like the company os lookinf for an excuse to downsize people who are in the program so they could replace them with cheaper labor without going through an age discrimination case. I’d bet that most of the 250 were in the top 50% of seniority.
I’d also wager that this plan requires a one-year waiting period to participate, so the firm doesn’t have to match.
The fishiness seems to be on QVC’s side.
I don’t know, as I only have some limited inside information.
The truth will out, no matter who is at fault.
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