One of a mini-series, on the peculiar medical-media use of an editor in order to bill the Big Pharma client (because, you know, editors wouldn’t be employed by med-media firms, along with the following possible financial mishaps, if the med-media firm couldn’t bill the Big Pharma client for that work)
[This adapts, and adds to, a mini-essay I posted on my personal Web site in 2011. Also, below I use the term “med-media firm” or “med-media” as a modifier; here, this refers primarily to medical advertising/promotional firms. See also “What is editing? Part 2 of 2: Is medical editing a blind alley? [BETA]” for an explanation of some of the logic to how med-media firms use freelance editors. Edit 5/30/14: For a follow-up to this entry, see here from May 2014.]
Takeaway: For a time through early 2007, med-media firms wanted freelance editorial work done well and quickly by temps they hired from the placement firm GLG; but after a while, they opted not to pay for this work on time. This became a practice so widespread across firms and stretched out over so much time (varying among med-media firms) that it forced GLG into being in violation of state law regarding disbursing paychecks, in cases for many months, and caused it to go out of business.
The variety of publishing I’m deeply familiar with is (or it certainly was before 2008) a highly changeable, if not unstable, industry, to say nothing of the passing political behaviors within given workdays and the more business-oriented (but in key ways questionable) machinations that can occur there. Many of the companies listed on my resume (especially those from the 1990s) have gone out of business (sometimes due to the supplanting factor of the Internet), or been bought up by (or merged with) another company, or moved a considerable distance away.
But the weirdest experience I ever had with a business’s fate in the media industry was when a placement agency, “The Gary Laverne Group” (a pseudonym; “GLG” hereafter), imploded. It was on a track to do this for a year or more, but once numerous of its paychecks to several employees started bouncing or were withheld by its management (and, later, GLG started being sued—apparently by an employee—for nonpayment), it fairly quickly collapsed.
This is also an example of how, as slow and tedious as the process can be, discovering the nature and cause of a business meltdown in a concrete, patient, and relatively respectful manner is better than high-handed incriminations, broad condemnations, sophomoric rhetoric and refusals to recognize complexity, and/or the like. For one small example, one or more GLG workers, frustrated in dealing with specific consequences of its meltdown, would dismiss it baldly as “sleazes,” but I instinctively held to the idea that steadily and firmly working with the company, to get square (though as a sort of stolid, persistent creditor), was a better policy.
It’s hard to say how much I would blame or criticize GLG in this matter today; in general, I have no real issue with GLG today. I have found in reviewing my clot of records on this mess that I was more patient with Gary of GLG than I might have been with a similar imposition in more recent years (2009-11), but I was, throughout, practical and resolved in some kind of proportion to the mysteriousness and vexatiousness of the situation. And I think Gary
Further, a longer-range objective of this account is to look critically at another, much larger firm that utilized GLG’s services for some years (and abused it just before GLG’s demise). With this larger firm, my emotions have been stirred and unsettled, partly because of its practices in 2010 (which had nothing to do with a placement agency) that seemed to echo practices it engaged in that were inferable in 2007, which latter had the consequence of helping to kill GLG in 2007.
I. GLG and its financial failure
Getting on board with GLG
GLG was owned and primarily run by two principals, “Gary” (age maybe 45 in 2007) and “Laverne” (age maybe 40 in 2007). It had been started in about 2000, after both Gary and Laverne had (to my knowledge) worked for another placement agency, Horizon Graphics (and had started it?), which had been located in Boonton , N.J.
As for Laverne, coincidentally, I had first spoken with her in March 1994, after having submitted my resume to Horizon and gotten a form-card response in 1993. By March 1994, having left what would be my last full-time staff publishing job, I was itching to get into freelance work and no longer be an editorial staffer, if possible. Horizon Graphics used to advertise for editors a lot in New Jersey
In 1994, Laverne wouldn’t interview me to include me in their roster of workers yet, because I didn’t meet the firm’s requirement of having three work references [this situation is briefly alluded to in the “Sequelae” subsection near the end of the blog entry “Anecdotal Evidenz: A health-insurance odyssey, amid my dealings with CPG (1993-94), Part 2 of 2,” of May 2]. She said, and this is a direct quote from old notes, Horizon could be “kind of held liable” if a worker didn’t pass muster with references. As it happened, I had to wait until early 2001—about seven years later—before I had, as Horizon required, the three publishing references who could be contacted and freely attest to my virtues as an editor (and, as it happened, these references came from, essentially, the educational and reference publishing subfields).
By then, Laverne was gone from Horizon; there were another few regular employees there I dealt with, and after Horizon took me on in 2001, they employed me—placing me at a range of companies, usually medical-advertising/promotional firms (“med-media firms,” hereafter)—until 2004, when they went dormant, partly (and presumably) because they suddenly lost an appreciable chunk of business with a certain large med-media firm in 2003. My densest and most valuable experience during my 2001-04 time with Horizon was with different divisions of the just-named large med-media firm, with which I put in so much time from fall 2002 through late summer 2003 that I was almost a full-time worker there, though at different divisions.
After Horizon went dormant, and wondering why I couldn’t try to work for the large med-media firm directly as a freelancer (the way a print publisher could employ you directly as a freelancer, and pay you so that, incidentally, you got 1099s instead of W-2s), I sent querying-for-work letters to Jen C., a supervisor of mine when I was there through Horizon [see toward the end of the blog entry “Getting bearings: Work flirting and the professional woman’s firewall,” from June 15]. She eventually tipped me off to GLG. Once GLG hired me, and it had no issues about references (I think I provided two, but it’s possible GLG didn’t even contact them), I started working at the large med-media firm again in April 2004. I would work through GLG at many med-media firms from 2004 through late 2006, and I believe I made more money in that period, year for year, than through Horizon.
By the way, Laverne was at GLG, but she wouldn’t have remembered me from 1994. Both she and Gary were generally fine to work with, when work arrangements were suitable enough. Regarding how GLG placed me at firms, there would occasionally be odd little issues; Horizon had been more erratic in terms of (obliviously) suggesting firms that would not be a good fit for me, such as regarding professional experience, but GLG’s awkwardness along similar lines wasn’t quite so bad. And the worst arrangement was GLG’s having me work at a Manhattan Manhattan
GLG’s collapse: why
The way GLG collapsed in 2007 can be attributed to a number of things. But it is ironic that GLG imploded so ignominiously about seven years after it started, and (ironic from my viewpoint) after Laverne (at Horizon) had held firm with me on three references about 13 years beforehand. But in part, this reflected changes in the overall med-media industry, which this blog entry is just one of several here, discussing.
Laverne left GLG in spring 2007, at (about) the same time (in April) as Gary announced to me that GLG was closing (indeed, its company phone line would eventually be disconnected, and its Web site would be removed; my last dealings with Gary would be through a cell phone and what was apparently the e-mail address of a relative of his. A fax number he would use with me in later 2007 did not belong to the GLG office I had faxed to for years.
I’m not sure what Laverne’s and Gary’s relationship with GLG was in terms of their having been invested in it—via deferred pay, stockholding, or whatever—but it was clear that Laverne vacated the scene in spring 2007 and I only dealt with Gary as he had the unenviable task of straining to get money from multiple clients, dealt with the increased demands of his funding company, and came to realize that legal threats were on the horizon, from different sources. He probably assumed all financial liability for the company as he allowed Laverne to cash in on her share and leave (this would be a reasonable assumption, though who really knows what happened as Laverne left). In effect, he retreated to a bunker to deal as responsibly as possible with the long, ambiguous denouement of GLG, while Laverne went on with her career.
What Gary
Here is the basic problem GLG ran into—while in general and historically, it seemed to be one “agent” of choice for editorial talent for a fair number of north Jersey med-media firms. (There are numerous placement firms that fill this role, for different med-media companies; it seemed GLG was maybe the agency of choice for the med-media firms I worked at from 2004 through 2007. But other placement firms, still operating, run the gamut from The Creative Group, a subsidiary of the nationwide Robert Half International [which thus has seemed constitutionally unable to collapse as GLG did] to more local affairs like The BOSS Group and CGR7; the latter two a friend of mine has worked with, but I never have.) Placement agencies typically use the services of a funding company, which seems to be a sort of bank for businesses, to provide cash to back up payroll checks while the placement agencies experience what seems a fairly typical lag in receiving payment from their clients for the work a placed worker has already done. (The sites I checked out in 2007 are http://www.flexiblefund.com/, http://www.businessfunding.org/, and http://www.commercefunding.com/ [the company behind this last site may have somewhat different business aims today than the firm had in 2007].)
For example, a med-media firm needs an editor; the placement agency sends it an editor, who works there for three weeks, and the work is done. The placement agency is employing the editor as a staffer, with payroll checks made out for this staffer with taxes taken out; the placement agency is required by law to pay the staffer in a timely fashion, so it gives the employee the check per whatever its payroll schedule is. But the med-media firm that used the editor may hold off on paying the placement agency for the worker soon enough for the placement agency to have that money to back up the payroll check; therefore, the placement agency utilizes a funding company to provide cash to back up the checks. [See my blog entry “In editing, what is a freelancer? Versus a temp? And other considerations” from June 19.]
The funding company (I would expect) charges not-low interest for this service; when the placement agency gets paid by the client, the placement agency (on whatever kind of schedule) pays the funding company back the money, with interest. This all would seem to be standard business, to the extent I learned and inferred about it starting in 2007 when the GLG meltdown imposed on me grotesquely and I slowly but inevitably determined what was going on.
The point here is that several clients of GLG became so far behind (by their will, I would assume, at least in some cases) in paying GLG—and GLG ran out of money even from its funding company to such an extent—that GLG could not pay its paychecks on time. Paychecks bounced; it eventually withheld paychecks, up to several months—all in violation of state labor law. It tried to press, and/or wheedle, and otherwise get its clients to pay what they owed more quickly (but would not resort to suing the clients). The clients, to all appearances, felt no compunction on paying GLG later than usual; apparently their contracts with GLG didn’t forbid this. But their paying GLG late, pretty obviously, forced GLG to become in violation of state law regarding paychecks being disbursed in a timely fashion, and eventually GLG closed, with one of its two principals leaving relatively early in the 2007 breakdown, while a lawsuit hounded Gary, and while I myself started, then stopped, a laborious formal complaint with the state Department of Labor.
GLG’s breakdown in 2007 occasioned an unusual situation in which, when a division of the large med-media firm I mentioned earlier sought me for work in March 2007, because I was pursuing a relatively aggressive method of trying to get my payment from GLG before doing any further work through it, GLG allowed me to work directly with the med-media firm, which that firm allowed, seemingly in an ad hoc way. That coincided with the med-media firm’s having moved into a new office complex in which its various divisions were now spatially and, in some way, more practically consolidated, and it would start using outside, temporary (GLG-type) editors less; and an occasionally used freelance editor like myself would be hired directly, even if temporarily, and not through a placement agency.
As a general policy (which has been shared by other placement agencies), being hired directly by a med-media firm, shortly after your having worked there through a placement agency, used to be expressly forbidden by GLG without your paying a special large fee for this. Now, as an ad hoc decision, GLG was letting me start to work directly for this med-media firm. Of course, I had already been doing this sort of thing, working not through a placement agency (independently of any say GLG would have had, as the facts and legal circumstances allowed), with several other med-media firms in 2006. (Ironically, at one of these other firms, a coworker was there through Horizon Graphics, which apparently had resumed operation after going dormant in 2004. Also, when Gary or Laverne heard I was working at one of my independently obtained gigs in 2006, he or she asked me what the firm was, as if he or she wanted GLG to worm its way between me and the firm as a placement agency employing me.)
What my editorial work for the particular large med-media firm in question would lead to would pose some strikingly unusual problems of its own. But in 2007, as my star rose (in a small sense) as a direct employee of the large med-media firm, GLG’s star dropped as, seemingly, the type of small placement agency represented by it and Horizon, catering to certain types of large corporations, became more of a perilous proposition.
GLG’s collapse: early signs to interpret
GLG’s fall, it would become evident, started no later than 2005, when a check I received from it bounced, in November 2005. A check of almost $300 net pay incurred more than $100 in overdraft-related fees tied to my checking account, which, when I alerted GLG to the problem, it paid. (I would find that the bouncing of a paycheck happened with at least one other GLG worker in that same period of late 2005-early 2006.) I became nervous about being able to trust GLG for steady income, and, on working hard to bring in freelance work in which I was employed directly by med-media firms (some of them on the small side), 2006 became my most successful year ever in terms of number of firms worked for in a given year and in total amount of income. But GLG remained my main employer, and the biggest gig it found me was with a firm in Berkeley Heights , N.J.
But later in 2006, checks from GLG started reaching me late by more than the usual amount of time. I think things got to where, instead of two given work weeks’ being put on the expected check, some of the time would be delayed, until I might get a check that contained an unusually large amount, catching me up to where I should have been if GLG followed its normal payroll schedule. I would comment on this situation to a workplace-derived friend [Sqodox, referred to in the long, indented section below] in October 2006 (when I gave him the news in an e-mail that I received a check that reversed a situation of my being anomalously “two weeks behind” in receiving a check, so that now I was back to being “just a few days behind [the date I should have received a given check,] where I would normally be in getting their checks”; italics added). But this way of GLG’s paying out checks—only when it had the money in its account to do it—would start to fall by the wayside.
By the end of 2006, I had another paycheck from GLG bounce, and then further checks were actually being withheld (they were printed by GLG’s checks-producing firm PayChex, but were being held by GLG because there was no money behind them). By early February 2007, I was owed four biweekly checks from GLG, some covering an appreciable period at the end of 2006 (meaning, in part, that while I dealt with my tax returns for 2006 pay, I had not received this pay, and this situation was going on for several weeks into 2007). The total gross amount for the four checks was over $5,000. I was still working for the firm in Berkeley Heights
Long story short, I opted to do something I never had to do regarding an employer—certainly one that accounted for so much income—in my life: I refused to work for GLG until all the paychecks were in my hands. I made this clear to GLG in a painstakingly planned e-mail. “Going on strike” and facing down GLG this way—even while I was on such diplomatic terms with GLG that I could still discuss things with Gary in a businesslike way, while in February 2007 he seemed fatally out of touch with the monstrous situation he was in—all of this was such a stressful thing for me to do that I became horrifically sick in February, even entailing my getting emergency medical care. (I vomited so much, over several instances, that I needed an infusion of Ringers solution.)
[Here is a set of information I included in a document I first compiled on the GLG mess in 2007, and made available to a very limited number of people then. In 2011, I prepared a version of it suitable for access online via my Web site, but I don’t believe I made it publicly available then. The following is a small set of material from that document, on the experience of fellow temps employed by GLG, all pseudonymed: Liz, Nancy, Jane, Sqodox, Mitch, Belinda—freelance or temp editors all of whom I met and/or worked with at different times, and who had worked at medical-media forms as placed by GLG.
From November 2005 through February 2006, I was surprised to find that a number of these people had had experiences of paychecks being delayed, up to five weeks or more. There were at least three women this happened to; meanwhile, my checks weren’t being delayed. These people included Liz, a former staffer at a large ad agency (within the Interpublic conglomerate) and now a temp, who had to wait five weeks or longer, through early December 2005; Nancy, who had to wait several weeks—through January 2006—to get paid for work as a GLG temp (I believe at a division of the large medical-media firm I refer to in this larger Anecdote 4 document) in a period in November-December 2005; and Jane, who had worked many months at a pharmaceutical company as a GLG temp, whose checks recently were delayed till she complained to GLG.
With this news (in late 2005-early 2006) of so many editors’ having paychecks delayed while mine were still on time (though one did bounce), I did not feel smug, or “Better you than me.” I wondered if it was women who GLG was targeting for delaying checks, on the assumption that they weren’t main breadwinners in their households. To at least one of these people, I said she or they had a right to complain to the state Department of Labor.
I am not sure, but I think I heard (by earlier 2006) that someone else had a check bounce in that period of late fall 2005-early winter 2006.
Then in about spring 2006, I found that someone I knew for several years, Sqodox—who had been a fellow temp with me through Horizon Graphics in 2001-03 and whom I had recently encouraged to sign up with GLG—was having his first check delayed (for work at the pharmaceutical company that Jane had worked at)—by about four weeks after the pay period ended. Then GLG told Sqodox (I paraphrase), “Your checks should now come on time”—though the situation was more or less as follows: because the first check was delayed a few weeks, each subsequent one, even if it was two weeks after the previous one, was equally offset by a few weeks in relation to the pay period it was for.
The week of February 5, 2007, I encountered another person who had recently worked for GLG, Mitch, who was a former teacher. He said he had worked at MedThink (a pseudonym for a medical-promotions agency in Livingston , N.J.
Mitch also said that MedThink had gotten angry about GLG hounding them to pay its bills, because MedThink suspected GLG was trying to use their (MedThink’s) payments to back GLG checks for employees who were working for other clients that were behind in paying their bills. In fact, Mitch said that, in light of this, MedThink had considered hiring the GLG temps directly, away from GLG (as temps of MedThink, I believe).
Mitch told me a particularly ironic story about another GLG temp, Belinda, who had been a fellow temp when Sqodox, fellow temp Zdovox, and I had worked at MBS/Vox [see my July 5 blog entry, “Start of a Biopsy (this won’t hurt a bit)”]. Belinda had been a full-time staffer at MBS/Vox from about mid-2003 to about 2005, hired at the tail end of the temp phase she was in with Sqodox, Zdovox, and me. She was kept waiting for checks from GLG for so long that she almost lost her privately-paid-for health insurance as a result. Think about that: we were doing medical-editing work, not work on speculative ventures of trade books or limited-interest, leisure-pursuit consumer magazines; and the money-mishandling by medical-media firms could lead to one temp’s being at risk of losing her health insurance.]
I would not get the last of the four checks—which covered a pay period into early 2007—until June 2007. If this situation seems as if I was suckered, I think I was one of the numerous GLG employees who was paid earlier than some of the others (and in fact, the first two of the owed checks were sent to me fairly much in adherence to the schedule I outlined in my demanding February 2007 e-mail). And however much my being paid “earlier” was due to my diligent-or-strenuous, if not aggressive, holding GLG’s feet to the fire on the paychecks, I think no one among GLG’s other placement employees was as steady, thorough, and insistent about this (within externally imposed limits, because for a time GLG would be solidly out of touch with me). This is not bragging but reflects how this sort of situation was shockingly new to me (as well as legally highly questionable on GLG’s part), while I could only learn what the problem was and what to do and how to do it empirically, by bits, and meanwhile in a bit of a panic over not having my income come in.
I did not utilize a lawyer partly because I found that, as a payroll employee, my only recourse was to file a complaint with the state—as GLG was in direct violation of state law. As a matter of statutory guidelines or otherwise instituted rules, I had to pursue a complaint through the Department of Labor before opting to sue. Some other employee, however, initiated a lawsuit (I remember talking to a fellow GLG editor [Mitch, described in the long indented section above] who mentioned he was considering this route, but I don’t know if it was he who actually filed the suit I heard about). This fact of a pending lawsuit led Gary to pay me through bank cashier’s checks, since, as he explained to me in May 2007, his company account was “vulnerable” (i.e., one would assume, subject to garnishment or the like). Also, his funding company was requiring of him that payment by clients go directly to the funding company first, to satisfy what it was owed, then the remainder went to Gary, who then would pay the employee.
For the last two owed checks, he would send me the original paycheck’s stub—having been duly produced months before by the firm PayChex—along with a new cashier’s check. The time from my 2006 bounced check to final payment was roughly six and a half months, and the time from my February 2007 “going on strike” to final payment was four months.
This all reflects the practical headaches I went through. Why didn’t Gary Gary
II. The place of GLG among med-media firms through 2007, and what this means for today’s med-media business
“Follow the money.” —clandestine advice from FBI associate director Mark Felt, a.k.a. “Deep Throat,” to Bob Woodward and Carl Bernstein during their journalistic investigation into the Watergate conspiracy
As I said, an important feature of GLG’s failure is that its med-media clients were taking the liberty of paying GLG increasingly late. But this was for work that they typically wanted done at their own pace, and well. This while GLG seemed the premier placement agency (or at least one of them) to scout up temporary but good editors for the constellation of northern New Jersey
Thus, while GLG was looked to for trustworthy and capable workers, who were paid (what was in my view) high hourly rates, the med-media firms, seemingly increasingly in the latter half of the past decade, tried to delay paying GLG for longer periods, thus triggering GLG’s becoming delinquent in sending out its paychecks, making GLG in violation of state labor law. (When I told Gary in 2007 that I’d heard that the company in Berkeley Heights I’d been working at for him for months had two policy-outlined periods of delay for paying freelance workers, of four weeks and six weeks, Gary said he would be lucky to be even subject to the six-week delay with that company.)
Strangely to me, Gary Gary
In February 2007, as I’ve suggested, I felt he was almost delusional in not recognizing what was happening with his company; he thought my issue in addressing the fact of not getting paychecks was simply my experiencing “stress.” (He would probably think differently a few months later when his company was closed, and he was only reachable by cell phone and at his wife’s e-mail address, and he was keeping money out of his business’s bank account.) In February 2007, he seemed to be running on wishful thinking, as if after the current situation of multiple clients’ being in arrears was cleared up, he could again freely get business from these clients, with GLG on better financial footing. (The Berkeley Heights client was especially gross, with its flagrantly paying late as a relatively long-term matter [and at least once, one of its accounting staff essentially stiff-arming Laverne when she phoned]—and yet it did this while still allowing me to come in to do its editorial work—which in my view was in the context of its being, not just in editorial work, an especially tawdry med-media “chop-shop.”)
[By the way, on the Berkeley Heights firm: I have somewhere in my files some kind of documentation to the following effect that I got off the Internet, but I don’t have it at hand (in general, I still have all the paperwork from the 2007 GLG mess, including correspondence with the state). But I found out in about 2009 or 2010 that the Berkeley Heights firm, which was not supported by a conglomerate and I think was privately owned or otherwise not supported by traded stock or the like, had to get some important recapitalization in 2007—apparently starting around the time I was putting the brakes on working there when taking GLG to task over its paychecks—that involving getting investment from equity firms or such, in order to “re-inflate” its revenue stream or such. This made a lot of sense given what it was doing with GLG temps, that it had such poor cash flow that it had to pointedly stiff GLG for months. But imagine being fully expected by this firm to come in to work when it had no intention of paying GLG’s bills for me right away, and was desperately scrounging up capital from new investors.]
When it comes to the question of whether fraud was going on here, there was a certain bitter irony for Gary Gary
More gallingly, I would assume that some of the clients involved, in defending their practices in this matter, would say it was entirely GLG’s fault that it was bouncing checks: it “should have had the money to cover the checks,” and they would have ignored the fact that their slow payment of GLG led to a situation where GLG had stretched its abilities to benefit from its funding company to the point that the funding company would eventually hold GLG’s feet to the fire as if GLG were a crassly delinquent debtor.
[The rest of the original form of this story is kept in reserve.]
