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Mainstay Business Solutions Funder: "We Did Not Shut Them Down"

Written by StaffingTalk

Mainstay Business Solutions Funder: "We Did Not Shut Them Down"California taxpayers could potentially be responsible for absorbing a $16.4 million lien, depending on the outcome of a case getting underway in the United States District Court Eastern District of California involving a sovereign nation.

The Blue Lake Rancheria Tribal Government, which operated staffing firm Mainstay Business Solutions, alleges that an attempt made by the California Employment Development Department to collect $16.4 million in unpaid taxes violates their tribal sovereign immunity.

The outcome of the case could complicate current policy at the EDD, an organization that’s been plagued with complaints as it attempts to cope with an influx of unemployed workers since the Great Recession of 2008.

Most importantly, the court’s decision could potentially put $16.4 million on the backs of California taxpayers.

Following two years of negotiations with Mainstay, the EDD placed the $16.4 million lien on the staffing firm in April, and it’s a figure CEO Eric Ramos claims is inaccurate – by as much as 40 percent.

Soon after the lien was issued, Mainstay announced it was forced to close after its financial partner backed out after learning of the lien. Mainstay’s decision to close ultimately left thousands of California workers wondering if their jobs were in peril.

“Our question is why did the EDD take action they knew would cause layoffs and threaten the survival of hundreds of small businesses? They had the authority to avoid this and keep working with us,” asked Ramos.

Staffing Talk even tracked down a financial backer to Mainstay – Flexible Funding, a San Francisco-based company that provides funding to staffing agencies – and spoke with CEO Steven Elias.

According to Elias, his company did not force Mainstay to close.

“It was their choice; we did not shut them down. We said ‘What do you want to do?’ We absolutely did not say we would pull funding,” Elias explained. “We said, ‘As long as there’s a levy, if you want to fix it, we’ll continue to work with you.’ It was their choice to shut it down.”

Mainstay Business Solutions Funder: "We Did Not Shut Them Down"“They had some options where they could have changed things,” he continued. “They could have pulled money from their casino (to pay the lien). They could have gone to another lender. We do not lock anyone in to a long term contract. They are free to go. So they could, if they wanted to, go to another lender, another bank, another funding company.”

“They were the ones who didn’t pay their taxes,” Elias added. “I didn’t pay their taxes. They created that themselves.”

“I’ve had a good relationship with them over the years. It’s been a good, cooperative relationship. I’m not saying what’s right or wrong, but sometimes there are gray areas,” he said, adding that being a sovereign nation complicates things significantly.

Jana Ganion, communication director for Blue Lake Rancheria, declined to comment on the tribe’s decision to file a complaint in federal court.

Meanwhile, many former employees of Mainstay have had to file unemployment claims with the very agency that issued the lien to their employer – the EDD.

Confusion and inconsistencies in filing claims with the agency have even prompted the workers to start a Facebook page called “Mainstay Business Solutions Former Employees.”

On the page, they detail the trials and tribulations of filing a claim with the EDD – the very agency Mainstay is saying put them out of work.

They’ve organized and sent letters to legislators complaining about the EDD.

Questions also have risen over the competency of their former employer, as Mainstay’s last payroll checks bounced.

“Warning!” urged Gary Bekowsky on the Facebook page. “Mainstay just made a withdrawal from our bank accounts. I went to the bank today and found out that Mainstay cleaned me out (and) they made a withdrawal from my account for over $600.”

“I know they levied Mainstay’s accounts, but they did not levy the tribe, right? So why can’t the tribe, which owned Mainstay, pay the final wages?” John Garcia asked.

Mark Parker responded, “The tribe could pay, but then the EDD would come along and say, ‘Oh, then all these people really worked for you directly because otherwise why would you pay them out of your pocket.’ The reality is that the tribe has zero business or moral obligation to spend any more money on Mainstay. Not only that, if they did pay everyone out of the goodness of their hearts, then the EDD would believe themselves to have justification to go after the tribe directly.”

Perhaps the most moving post came from Jenny Augst, shortly after Mainstay made its decision to close.

“I’ve cried four times today,” she said. “Twice for the fact that I have no income. Once for the fact that I am leaving my workplace of five years which felt like a home away from home with people I love and trust, and I cried again for my co-workers out there that have tougher situations than mine.”

{ 0 comments… read them below or add one }
  1. Ella

    Looks like Mainstay has something to hide. Why else would they lie to all of their employees? Not pay any final wages. Don’t the employees have a right to know why they won’t/don’t have a job? No moral or business obligations? Really. They did work for Mainstay directly, that is the business of staffing companies. Way to cop out Mainstay.

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  2. Loren Adams

    It seems to me that where there’s smoke, there’s fire. Obviously that won’t fly in a court of law, but there seems to be an awful lot of smoke here with Mainstay.

    Like or Dislike: Thumb up 0 Thumb down 0

  3. Regan Kohler

    All this finger-pointing at who’s responsible disgusts me. It’s a classic case of “I didn’t do it!”

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  4. Toby

    I worked for them. Their whole bs about.being a better paying agency becquse they didnt have to pay taxes didnt make sense

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  5. Stephanie

    It’s frustrating. No work, no final pay check. Now I cannot roll over my 401K without Eric Ramos’s signature. They are taking money out of my account, and there is nothing I can do. It’s so frustrating. If you practice business, you need to follow the laws, tribaly owned or not.

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  6. Fedup

    Mainstay was wholly owned by Blue Lake Rancheria who should have paid us our final wages. Not only did they not pay us for work performed between April 1 through April 12, they also did not submit to respective companies the benefit monies deducted from our paychecks for 401(k), Health, Dental, and Vision Insurance from the check we received on April 5th for work performed March 16 through March 31. If that is not bad enough, any employee that participated in the 401(k) offered by Mainstay (no company contributions, fully funded by employee deductions) have been blocked from withdrawing their funds from the account because Eric Ramos, former CEO of Mainstay and current President of Business Operations for the Blue Lake Rancheria Tribe, will not sign the necessary paperwork needed to release our funds. Being a sovereign nation should not afford them the right to be thieves. I am disgusted.

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  7. stolen ID

    Just got a w2 from them with my name misspelled but my ssn. I never worked for them ever. So which illegal alien used my data.

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  8. DIR finds a hole in the tribe's scam

    As Eric Ramos continues to slither behind the veil of the tribe and flip his middle finger at former employees and government agencies alike, it looks like finally someone has figured out how to go after the 10s of millions of dollars that went missing. The Dept of Industrial Relations found a loop hole in their scheme and is driving a mack truck through it. While employees may be screwed out of their money at least the tribe and Eric Ramos wont get away with the cash scot free. I guess Mark Parker was wrong about the tribe having to pay legally for the debts of Mainstay. And as for their moral obligation, I guess that depends on what kind of morals you were raised on………

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