Hickey Freeman workers could lose health insurance after iconic company fails to pay its bills

About 200 Hickey Freeman employees could lose health insurance coverage next week after the company failed to pay premiums.

They learned of the impending termination this week and complained to the National Labor Relations Board, alleging that they had mishandled salary deductions and acted immediately.

“This has been a constant problem for several years now,” said Gary Bonadonna, a local labor leader with Workers United. “They hold on to the money or do whatever, they are the ones who do with it. But it doesn’t reach the right places.”

The union claims other deductions are similarly being withheld, including union dues.

But the Rochester-based menswear owes its insurance provider the most, more than $3 million in combined employer and employee contributions, according to the union. And the Amalgamated National Health Fund comes out.

“It’s not their money to play with,” Bonadonna said of Hickey Freeman. “It’s directly from the workers’ salaries. They are just a conduit… It is nothing to even think that they will hold on to this money and use it for whatever purposes they want. It’s like, it’s, it’s unfathomable.”

Hickey Freeman CEO Stephen Granovsky does not dispute the violations. But he says it’s not a matter of paycheck withholdings. He referred to partial payments being made, adding that employee contributions cover a fraction of the bill. So, he said, it is unknowable which dollars are paid or owed.

The insurance debt piled up during the pandemic, Granovsky said, when sales were down 75%.

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He declined to go into detail about the company’s finances, but said he had “mishandled” the relationship with the insurance fund over the delinquency and needed to fix it. He said he was “blindsided” by the decision to terminate.

Both he and union officials said they are working feverishly to ensure employees’ coverage does not lapse.

“I don’t know how you run a business or make a living,” Bonadonna said. “So, you know, we’re concerned … it speaks to larger financial issues.”

Granovsky maintains the business outlook is solid. There are two or three obstacles, “commitments” built up during the pandemic that remain challenging, he said. But the company’s two major rivals folded during the pandemic. Now the problem is labor shortages – and producing enough product to meet demand.

The company sold its North Clinton Avenue headquarters and production facility in June 2022. Home Leasing paid $4 million, according to city records, which allowed the company to pay off a delinquent tax bill and other debts. The company is consolidating operations in one-third of the building and will continue operations. The developer plans to convert the remaining space into 134 affordable apartments for seniors.

Historically, the relationship between Hickey Freeman and his union has been a good one. Officials could not recall a time when tensions reached this point.

“The workers, the members here, I mean, some people I’ve known my whole life,” Bonadonna said, speaking of Hickey Freeman as a family that spans generations. “It’s an iconic company. Everyone is rooting for them. Elected officials do everything in their power to support the company. We’re so proud of the materials, the products they make, and all the hard work, you know, that the union members do.

“So to say it’s disturbing is such an understatement.”

He describes the current situation as ‘definitely wrong’, and even goes so far as to claim it is ‘criminal’.

Some may question why the union has endured the erratic financial practices he describes for so long.

“I’ve always thought, you know, prioritized preserving jobs,” he said, “working it out, believing that of course we’d fix it here and, uh . . .”

Bonadonna paused, and his tone changed: “It will never be fixed. This company, they are thieves.”