If you ask Morgan Hill resident Peter Kohlstadt, the scandal
surrounding the bankruptcy of solar power systems manufacturer
Solyndra has as much to do with the sanctity of state and federal
labor laws as it does with the questionable use of tax dollars, or
the viability of cutting-edge green technology in the American
economy.
If you ask Morgan Hill resident Peter Kohlstadt, the scandal surrounding the bankruptcy of solar power systems manufacturer Solyndra has as much to do with the sanctity of state and federal labor laws as it does with the questionable use of tax dollars, or the viability of cutting-edge green technology in the American economy.
Kohlstadt worked at Fremont-based Solyndra LLC for about four-and-a-half years as an engineer in the company’s product development group. Part of his job at the solar energy startup, barely a year old when Kohlstadt started working there, was testing the company’s newly-designed rooftop panels (shaped more like tubes) that harness more of the sun’s energy than more traditional systems.
On Aug. 31, Kohlstadt was one of 1,100 Solyndra employees to be let go, effective immediately, with no warning. Two days later, he filed a lawsuit against the company, alleging they failed to give him the 60 days’ notice of layoff required by law, and withheld hundreds of hours worth of vacation pay he had accrued over the previous four years.
Since Kohlstadt filed the suit in the U.S. District Court of Northern California, Solyndra filed for Chapter 11 bankruptcy, and about 100 other former Solyndra employees in the same predicament have joined the complaint that Kohlstadt brought on behalf of all 1,100 former employees.
“We busted our butt for that company,” Kohlstadt said. “They knew (bankruptcy) was a possibility, but they weren’t looking out for their employees.”
According to the federal Worker Adjustment and Retraining Notification Act, any employer enacting mass layoffs of their workforce must provide at least 60 days’ written notice to the employees who are to be let go, the class action lawsuit states.
Plus, and more importantly to Kohlstadt, the laid-off employees are entitled to the vacation benefits they accrued while employed at Solyndra. For Kohlstadt, that comes out to about 240 hours’ worth of pay which, at his “typical Silicon Valley engineer’s” wages comes out to somewhere between $10,000 and $12,000 he is owed. (Kohlstadt declined to identify his exact salary or the amount of damages he is seeking.)
Solyndra’s sudden downfall immediately made national headlines. The company was the recipient in 2009 of a $528-million loan from the federal government. The loan was funded by President Barack Obama’s economic stimulus effort, but administered under an existing $30-billion program in the Department of Energy that started in 2005 to provide financing for the then-burgeoning renewable energy industry.
Private investors kicked in another $1 billion or so to Solyndra’s venture.
Accusations of political favoritism and cronyism as Obama’s motivation for authorizing the Solyndra loan spread quickly through the media. Proponents of green technology have cited the calamity as a setback to the promise of high-tech innovation in the American clean energy industry.
Kohlstadt said he was “hit twice” by Solyndra’s failure – once as a taxpayer supporting the federal loan, and again as an employee who was laid off without the compensation he is due.
Solyndra is now the subject of a federal investigation. Its executives are scheduled to testify in U.S. Congress today, but they will invoke their Fifth Amendment right not to incriminate themselves, according to various media reports.
Kohlstadt has been appointed to the creditors’ committee in Solyndra’s bankruptcy case. That means he has a voice in shaping the company’s plan – subject to court approval – to repay the long list of investors, sub-contractors, banks and, Kohlstadt hopes, fired employees.
The day he and most of his co-workers were laid off, Kohlstadt was on his way to work when he received a phone call from a colleague, letting him know a staff meeting was scheduled for 9 a.m.
Solyndra executives announced the bad news. Their latest effort to secure more financing failed, and the company could no longer afford to compete with cheaper products made overseas.
“It was only a five- to 10-minute meeting, and afterwards everybody was dead silent,” said Kohlstadt, 49, who lives in northeast Morgan Hill. “We went to our office, packed all our stuff in boxes, and went to (human resources).”
The only compensation the 1,100 now-jobless employees received from the company was wages for the vacation hours they had accrued during the previous 90 days, which was about “three or four days” worth, Kohlstadt said.
Now on unemployment, Kohlstadt is looking for a new job while sending his two children, ages 8 and 11, to St. Catherine School. Fortunately, his wife, who had been unemployed before Kohlstadt was laid off, recently found a new job.
The layoffs were “a complete shock” to Kohlstadt and his co-workers. There were small cost cutbacks along the way, but nothing to indicate a total collapse of the company was imminent.
It was a “hectic” yet promising work environment, constantly buzzing with activity and fueled by the excitement that the company was at the forefront of developing solar power technology, explained Kohlstadt, who previously worked for Intel.
The fact that Obama visited the Fremont facility in May 2010 lifted their spirits even higher.
“We knew the technology was good,” Kohlstadt said of Solyndra’s solar panel design, which is used by large companies to power massive facilities.
However, starting in about 2009, Kohlstadt noted that communication between the company’s executives and the rank-and-file started to deteriorate.
“We were kept in the dark” about conflicting sales reports, for example, he said.
Kohlstadt is represented in court by Outten & Golden, a New York firm that specializes in unlawful termination and WARN cases. The firm did not return a phone call requesting comments on the case and on the law.
In a news video clip posted on the firm’s web site, attorney Rene Roupinian explains one exemption to the WARN law is the “faltering business” clause. In such cases, if a company knows it is on the verge of collapse, but is at the same time grasping for last-minute finance salvation, it could jeopardize its efforts to acquire that money by sending out 60-day layoff notices, Roupinian explained.
Kohlstadt worries that’s the “loophole” that Solyndra will use in court, but he doesn’t think it’s right. “Nobody’s held responsible,” he said.
Solyndra, which still employs about 100 people, did not reply to an e-mail requesting comment.
Kohlstadt couldn’t have predicted the national attention that has even reached his angle of the Solyndra fable – he appeared recently on the Fox News program “On the Record with Greta Van Susteren.” From the day after he was laid off, he has been focused on retrieving what is owed to him. Still, the fact that his case could have far-reaching results for businesses, their employees and taxpayers isn’t lost on Kohlstadt.
“If it turns out well, I hope it’s a signal to other companies, that they have to respect the law. If it turns out bad, we know that companies can do whatever they want.”
