Dallas Weekly previously reported on Save-A-Lot’s exit from Martin Luther King Jr. Blvd. back in mid-February. Now, employees are stating that company policy is being circumvented by temporary store owner and operator Yellow Banana LLC and their requests for severance pay have been denied. The tension between employees and Yellow Banana coincides with friction between Save-A-Lot parent company Moran Foods and new building owner Scottie Smith.
Dorthy Bisco was an employee of Save-A-Lot for 15 years. At 71, she began working at the location on Martin Luther King Jr. Blvd. when she was 56 years old. “I didn’t get paid severance, I was laid off when Yellow Banana closed the store,” Bisco says, stating she did not get the opportunity to transfer.
In lieu of severance, Bisco was offered a ‘Separation Agreement and General Release’ from Yellow Banana LLC. The document – which stipulates that the company will pay the employees a one-time allotment of $2,000 in lieu of PTO or severance – spends the vast majority of its language outlining agreements which clear the company of any wrongdoing, barring employees from citing many foundational labor laws in any legal action taken against Yellow Banana in regards to their past employment.
Yellow Banana eventually paid out employees $2,000 without requiring a signature for the agreement.
However, under Save-A-Lot policy, longtime workers like Dorthy may be entitled to much more in their severance pay following a store closure with no option to transfer.
Employees are eligible for severance pay following their fifth year at the company. Save-A-Lot’s internal policy outlined this, but Dorthy is unsure if this remains true under Yellow Banana. “They didn’t give us a handbook, so I don’t know how that works with Yellow Banana.”
Severance pay at Save-A-Lot is equivalent to one paycheck a year for each year worked with the company following the fifth. Under this policy, Dorthy would be entitled to around $7,000.
“I was only with the company for six years, so I’m not entitled to that much. But some people have been working at the company for almost 30 years,” manager Eric Patt says. “That’s a significant amount of money.”
The managers of the Martin Luther King Jr. Blvd. and Lancaster Rd. locations, Eric Patt and Eric Humphries, were both hired while Save-A-Lot’s severance policy was still in effect.
The bigger concern for the managers is the payout of their unused paid time off, which wasn’t usable given the chaotic day-to-day operations of the store. “I told Joe, ‘I received my last check and I had a PTO request on here that hasn’t been paid out,’” he said “The employees had PTO paid out, but no severance. Managers got no PTO and no severance.”
Patt continuously pursued the payment as Joe Canfield of Yellow Banana claimed to be facilitating the process with their human resources manager. Ultimately, however, managers were not paid out unused PTO from 2023 despite previous assurances to the contrary. Patt provided emails corroborating this. Lancaster Rd. former manager Humphries also attests to this, saying that Canfield seemed to stall until the next year rolled over and the accumulated PTO was dropped back down in January.
Though email correspondence may be legally binding, it needs four key elements to constitute as a form of contract:
1. An offer
2. Acceptance of the offer
3. Consideration
4. Stated intent by both parties to create a legal relationship
However, Humphries states that employees were still being paid out of Moran’s accounts despite Canfield and Yellow Banana handling administrative duties, further muddling responsibilities between companies. Even more complicating, Yellow Banana owes Moran Foods $30 million for payroll, repairs, and other expenses. Overall, several factors affected both the store’s performance and the workload of employees and managers.
Both the Martin Luther King Jr. location and the store on Lancaster Rd. were fraught with issues such as low stock, unreachable goals and metrics, and late shipments. These issues, principally, were the responsibility of Yellow Banana, which operated the stores from October 2021 until late 2023 when Moran Foods stepped in.
Understocking by Yellow Banana did not translate to lower pressure on the store managers. If anything, Patt and Humphries’ jobs became that much more demanding. “Literally, all summer, our stores were sitting empty,” Humphries says.
Section 17.46.10 of the Deceptive Trade Practices Act (DTPA) states false, misleading, or deceptive acts or practices in the conduct of any trade or commerce are unlawful and are subject to action by the consumer protection division, specifically in regards to “advertising goods or services with intent not to supply a reasonable expectable public demand, unless the advertisements disclosed a limitation of quantity.”
So, if a company was continuously understocked despite the distribution of serial advertisements that featured products in vastly greater quantities or wider varieties, that company could be vulnerable to a consumer lawsuit filed under the DTPA. While employees typically do not file under consumer law, there’s a solid legal argument for consumer law being utilized to protect workers.
Additionally, aside from over a year of understocking setting the stores too far back financially to recover, a burglary in 2023 left significant damages to the store. Greater losses were suffered due to the lack of a security system and cut phone lines at the location.
These factors contributed to vast underperformance as the stores typically missed metrics by over $20,000 a week. Some weeks, the MLK Save-A-Lot made only $5,000 of their projected $60,000 – $85,000, according to the store’s most recent owner. Associated manager bonuses were meager, as they were dispensed based on the store’s performance. Save-A-Lot/Yellow Banana was also behind on bills for product and repair vendors. Some repair and utility services were delayed due to deficits with approved contractors.
Concurrently, now-owner of the vacant building on 3021 Martin Luther King Jr. Blvd. Scottie Smith, had thousands of dollars worth of fixtures in the store taken by Moran Foods LLC’s hired procurement team. “They tried to take some of the fixtures, shelves and refrigerators and stuff like that. But in real estate transactions, anything fixed to the property stays.”
As Smith was planning to establish a new grocery store at the same location, the fixtures stolen from his property, such as shelves and refrigerated displays, were going to be repurposed for use in the new store. Additionally, pallet jacks were taken when contracts established all equipment central to the store’s operation as property of the building owner.
“I made some phone calls and they ended up leaving, but they did take a few things from the stores.”
Brettney Moore from Legal Aid of Northwest Texas didn’t offer much optimism with getting PTO paid out for managers. “In that situation, you’re more legally protected if you take the PTO, regardless of the state of the business you’re working at,” Moore says. She explains that workers are afforded more protections legally for having taken PTO in times that might’ve negatively impacted the business, rather than having it paid out later due to greater pressure in your workplace.
While the employees’ options are limited in how to proceed legally with Yellow Banana, as litigative action would be costly and could take months to years to pursue, Moore agrees that employees set up to fail could be experiencing a hostile work environment. However, given the potential of a bad actor, a consumer lawsuit might be more viable as a path forward in a situation like this.
“With a hostile work environment, there has to be some sort of direct harm to an individual employee,” Moore says. “When there’s a bad actor […] a suit would be brought by a class of people against a company regarding its wrongful business practices. A hostile environment [created from those practices] could be one part of a suit, though. That could be a factor in a broader case against a business.”
Despite a litigative approach offering a potentially challenging road ahead – as Yellow Banana’s parent company 127 Holdings LLC’s founders are Yale-educated law professionals – the company has already suffered significant legal trouble and controversy. Last year, Sanson Produce sued the company for over $350,000 in unpaid bills. Residents of Lorraine, Ohio were left battling food scarcity as the company left workers in the dark leading up to their exit from the area.
But aside from impossible employee metrics that set workers up to fail, baiting with low-price products in a food desert would be a significant slight to a majority non-white district. Especially communities as historically underprivileged as those surrounding the MLK Jr. Blvd. and Lancaster Rd. Save-A-Lot stores.
As options have been dwindling in food insecure areas of Dallas, consumers of Save-a-Lot at Lancaster and MLK were subjected to low-functioning operations as Yellow Banana understocked stores and stretched workers thin.
Yellow Banana and Moran Foods have not responded to requests for comment.