A Tampa-based company looking to innovate the laundry space has been sued for allegedly withholding more than $60,000 in unpaid wages.
A lawsuit was filed against Washlava and its owner and president, Todd Belveal, on Sept. 22 by former employee Kelly Friar.
The lawsuit states Friar originally began working for the company in October 2019, after leaving a job she had been at for nearly a decade. She joined the Washlava team as chief marketing officer and also served in a sales role until a director of sales was hired in January. She alleges she received the position after Washlava received nearly $6 million.
Belveal said after that funding round, the company was valued at $36 million and was on "solid financial footing" when offering Friar the position, the lawsuit states. She made $2,644 weekly, totaling a $137,499 annual salary.
But Belveal held a leadership meeting in April and said the company was "in a sticky situation" and needed to get capital quickly, after meetings with potential investors in February and March were unsuccessful, the lawsuit states. At the end of the month, Belveal held a Zoom meeting in which he allegedly said employees would need to take a "voluntary 100 percent salary deferral" for the month of May while he worked out a capital deal.
Additionally, the lawsuit states that in April, Washlava applied for and received funds from the Paycheck Protection Program but Friar and other employees did not receive paychecks. "This is certainly because defendants Washlava and Belveal's financial struggles were separate and distinct from those experienced by so many businesses legitimately caused by the Covid-19 pandemic economy," the complaint says.
Based on her knowledge, Friar said the company was making more than $500,000 in annual sales revenue. Washlava received $1 million in 2016, more than $5 million in 2019 and partnered with LG Electronics.
In June, Belveal allegedly told employees they would need to continue the salary deferral, stating the nonpayment was a result of "the typical nature of a startup company."
Belveal sent a second deferral notice to Friar for June, July and August, stating she would receive payment no later than Sept. 1. According to the lawsuit, Belveal told Friar shortly after that he was hoping to sell the company, "which would likely mean plaintiff would not ever receive full payment for the full-time work she performed" for several months but that he would "put in a good word for her."
In that same conversation, he allegedly stated should Friar pursue payment of her unpaid wages, he would file for bankruptcy.
According to the lawsuit, Belveal told Friar he had $1 million in a safe deposit box and money in the Bahamas as it was "the smart thing to do," but stated he would "watch Washlava run into the ground" before investing any more personal funds in the business.
On Aug. 31, Sean Pomeroy, the managing director of higher education, called a meeting to ask for the alleged overdue compensation. Belveal allegedly stated he was more focused on an asset acquisition deal. Friar and Pomeroy then said they needed to be given a plan moving forward. Belveal allegedly said he didn't feel a personal responsibility for the money that was allegedly owed. The following day, Belveal allegedly told Friar he planned to indefinitely furlough her so she could collect unemployment.
Pomeroy filed a lawsuit against Washlava and Belveal on Sept. 16 for allegedly not paying for 17 work weeks, including any overtime wages. A representative for Pomeroy did not return a request for comment.
"As a small company, we value and respect every member of our team and it was especially disappointing to learn of this lawsuit from a member of our leadership team," Belveal said of Friar's lawsuit in an email to the Tampa Bay Business Journal. "The complaint includes numerous inaccuracies and misrepresentations. We will provide clarity regarding this matter in our formal response to this lawsuit."
"While the company will not comment at this time regarding any of the specific allegations that have been made, we can say that Washlava’s business, like so many other small businesses and startups, is doing its best to navigate the unprecedented challenges created by Covid-19," Belveal said.
Friar is seeking compensation for lost wages, including severance, benefits and other remuneration; reinstatement to a position comparable to her prior position, or in the alternative front pay; compensatory damages, including emotional distress; prejudgment interest on all monetary recovery obtained; all costs and attorney’s fees incurred; and all further relief as the court deems.
"It is unfortunate that in his comment Mr. Belveal appears to hide behind the Covid-19 disruption to justify not paying several full-time employees any wages at all for four months while perpetuating the false promise of impending payment," a statement to the Business Journal from Friar's attorney said. "Many of our local community's startups genuinely struggle because of the current pandemic business environment and yet continue to comply with state and federal law."
This story was updated from a previous version.
