The Republican-owned hotel company reportedly owes $1.2 million for employee health insurance.
The Greenbrier Hotel in White Sulphur Springs, West Virginia, is in “significant delinquency” with its health insurance company, according to a letter from the Greenbrier Workers Union Council.
The council also said the hotel, owned by the family of West Virginia Gov. Jim Justice, has never returned health insurance premiums that are routinely deducted from employees' paychecks.
West Virginia Governor Jim Justice speaks onstage during the second day of the Republican National Convention at Fiserv Forum in Milwaukee, Wisconsin, on July 16. Justice's family owns the Greenbriar Hotel. West Virginia Governor Jim Justice speaks onstage during the second day of the Republican National Convention at Fiserv Forum in Milwaukee, Wisconsin, on July 16. Justice's family owns the Greenbriar Hotel. Chip Somodevilla/Getty Images
According to the Consolidated National Health Fund, Greenbriar is behind on four months' worth of payments totaling about $2.4 million, with another $1.2 million due soon.
“Greenbrier's defaults put our members' health care benefits in serious jeopardy and are morally and legally wrong,” the union council's letter said. “Our members have worked hard every day and fulfilled their obligations by paying their contributions to Greenbrier. Greenbrier has failed in its obligations to its employees.”
If Greenbrier doesn't resolve the issue, it could face legal action over the lost health insurance.
“If Greenbriar doesn't seek a resolution soon, it could become a matter of 'if' and not 'when' when it comes to the legal dispute,” Alex Bean, a financial literacy lecturer at the University of Tennessee at Martin, told Newsweek.
“The allegations are that Greenbriar is behind on payments to its health insurance company and this could cause major problems for employees and the medical care they currently receive. More importantly, the union is criticizing the fact that the company continues to withhold a certain amount from employees' paychecks for health insurance, despite the behind payments.”
But this isn't the only sign of trouble for the Greenbrier: Recent advertising suggests the historic hotel may be up for auction this month.
In July, Justice Companies was informed by JPMorgan that the hotel's $142 million loan, following its sale to Beltway Capital, was considered in default.
Newsweek has reached out to Justice and The Greenbrier via email for comment.
On Monday, lawyers representing Greenbriar filed for a preliminary injunction to block the forced auction.
Greenbriar is majority owned by Justice's children, Jay and Jill Justice.
If an auction takes place, it is scheduled for August 27, the date when all arrears must be paid to the health fund.
The Greenbrier's owners argue in Monday's filing that the 2014 trust deed is invalid because it was signed by Jim Justice, not Jay and Jill Justice, who own the majority ownership interest in the hotel. They also argue that the auction violates an oral agreement between JPMorgan and Jay Justice.
“Defendants seek to expedite the sale of Plaintiffs' unique real property that contributes significantly to the economy of Greenbrier County. Defendants are attempting to foreclose on the deed of trust when they have no legal authority to do so,” Justice family lawyers wrote in the complaint.
The owners also expressed concern about how job losses at Greenbrier would affect the local economy.
“The threatened sale would cause irreparable harm to Plaintiffs,” the lawyers wrote. “Greenbrier's reputation and business would be damaged. Local jobs would be lost. And the economic fabric of Greenbrier County would be damaged in a way that would be difficult or impossible to repair.”
During peak season, the Greenbrier employs about 2,000 people. Before a judge bought the property in 2009, the hotel was on the brink of bankruptcy.
Bean said the loss of money they've contributed is especially worrying for employees who don't currently have health insurance.
“The question is whether employees will lose their insurance, but where exactly will some of their paychecks go?,” Bean said. “In past cases involving these issues, legal action has typically been swift and can have serious repercussions. Greenbrier will have to reach a compromise with employees if it wants to avoid the situation becoming even worse and serious consequences becoming apparent.”
