Victims Were Making Most Of Situations

Madison Newspapers, Inc, March 27, 1999
By Patrick Casey

State and federal labor investigators are looking into Subscription Plus, a company that sends teenagers around the country peddling magazine subscriptions, after a van crash in Wisconsin in which seven workers died.

``Our concerns here are possible violations of the Oklahoma Worker's Compensation Act and child labor laws, both state and federal,'' Trey Davis, deputy director of the state Labor Department, said Friday.

The deaths occurred when a van loaded with 14 workers rolled over Thursday on Interstate 90 near Janesville.

Davis said his agency's investigation into the company, based in an Oklahoma City suburb, is part of a multistate probe that includes the U.S. Labor Department, the Wisconsin State Patrol, the Wisconsin Department of Workforce Development and the Rock County Sheriff's Office.

``Our concern is that they have classified the workers as independent contractors,'' Davis said. ``If that were legitimate that would exempt them from the Worker's Compensation Act. The peddlers appear to us as being employees.''

Davis said the investigation has found ``no record of the company having any worker's compensation coverage in Oklahoma.'' He said that means there likely is no insurance coverage for the accident's victims.

He said the company could be fined if it is determined that it did not properly carry worker's compensation insurance.

Davis said the scope of the investigation could be widened to include other jurisdictions because Subscription Plus also operates magazine selling crews in other parts of the United States.

``They apparently are running these crews to several states. I don't know if the investigation will be expanded into the other states where they operated,'' Davis said. ``We understand they have crews in Kansas, Texas, Missouri, Kentucky and obviously Wisconsin.''

Davis said the investigation in Oklahoma likely would not be a lengthy one as long as all parties continue to cooperate.

``As far as we are concerned, we just need to make a determination if they are a contractor or employer,'' he said.

Sheehan Donoghue, administrator of equal rights and labor standards for the Wisconsin Department of Workforce Development, said her office is trying to pin down exactly who employed the sales people. Investigators also need to determine the ages, hours, wages and other work factors of the sales people, Donoghue said.

While lawmakers were generally stunned by the teens' deaths, most said they would wait for the results of the department's investigation before proposing any new legislation.

``My heart goes out to the families of the victims,'' said Assembly Speaker Scott Jensen, R-Waukesha. ``It's a sobering reminder of how fragile and precious life is.''

As one State Capitol source put it, ``Even if you put all of these firms out of business, there's still the chance that a van full of kids will get into an accident on the interstate.''

Bill Oemichen, Wisconsin administrator for trade and consumer protection, said recruiters for such door-to-door sales companies often use high-pressure tactics, trying to get young people to take jobs on the spot.

``What they're often told is, `You're hired, but we're going to have to leave right now, either tonight or tomorrow,' '' Oemichen said.

The company was incorporated in Oklahoma in 1995, Davis said. He said its franchise status was suspended Jan. 21, 1998, for failure to pay the state franchise tax.

Joann Kurjan, spokeswoman for the Oklahoma Tax Commission, said failure to pay the tax leaves the business's officers unprotected by the state and vulnerable to lawsuits.

The company's second-floor office in a small two-story building was closed Friday and its manager and other officials were not immediately available for comment.

Investigators for the Oklahoma and U.S. Labor Departments left business cards on the front door, asking for company officials to call.

Davis said the company is owned by Karlene Hillery, who apparently lives somewhere in Iowa. He said investigators should be able to talk to her by Monday.

Police said the accident victims were selling magazines for an organization called Yes.

Jason Bennett, a customer service representative with Subscriptions Plus, has said Yes is a company that sells magazines, and Subscriptions Plus processes the orders. Bennett said the company could not comment further.

Yes took out classified ads recruiting workers this month in The Capital Times and the Wisconsin State Journal, but the phone number on the bill for the ad was for Subscriptions Plus.

The owner of Yes did not return repeated messages left on his pager Thursday.

Subscriptions Plus does seek job applicants. Its Web site tells visitors they ``can earn great money while traveling the United States with all expenses paid.'' The Web site also says solicitors can go to cities like Dallas, Los Angeles, Seattle and New York, and can apply for openings online.

Holly Cherico, a spokeswoman for the Council of Better Business Bureaus in Arlington, Va., said young people who work for similar companies often work long hours, are crammed into hotel rooms and find their earnings reduced to pay for their travel and meal expenses.

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