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Lawsuit: Arizona Minimum-Wage Initiative Stiffed Petition Firm for $65,000

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An Arizona employer is stiffing a small-business owner on a completed job, affecting dozens of low-income employees.

Sounds like the kind of greedhead Arizonans for Fair Wages and Healthy Families is targeting with its campaign to raise the minimum wage, right?

Wrong — the employer is Arizonans for Fair Wages and Healthy Families. The campaign refuses to pay the last $65,000 of a $965,000 bill to Sign Here Petitions, the company that hired the people who gathered the signatures that put the measure on this November's general-election ballot.

Sign Here owner Bonita Burks sued the campaign on September 21 to recover the balance due. In the meantime, Burks says, she has been unable to distribute final paychecks to the 45 to 50 petition gatherers she hired to get Prop 206 onto the ballot.

It's not as if the minimum-wage campaign can't afford to pay Burks, a Maricopa resident who has owned her own business for 12 years. Though the campaign ran short of money over the summer, its spokesman, Bill Scheel, confirms that Arizonans for Fair Wages expects to receive an influx of $1.5 million in donations any day now.

Scheel says the campaign intentionally shorted Burks' company because it didn't do its job well enough, resulting in tens of thousands in unexpected expenses.

If Arizona voters approve the minimum-wage measure in November, the state's minimum wage would go up to $10 an hour next year and rise to $12 in 2020. Waitresses and others who expect tips would see their wages increase from $5.05 to $7 by 2017, and to $9 by 2020. The ballot initiative also mandates that workers can take between three and five days of earned sick leave annually.

Much of the money for the campaign has come from out-of-state donors as part of a national effort by activists and labor unions. Living United for Change in Arizona (LUCHA), the largest donor, is itself being funded by the Washington, D.C.-based Center for Popular Democracy. The Commercial Workers union Region 8 States Council and California-based Fairness Project are also major contributors.

As New Times reported in August, a member of the political-strategy firm hired by the campaign, Javelina, loaned the campaign $100,000 after it ran short of cash while defending itself from a legal challenge that could have kicked the measure off the ballot.

Scheel, a cofounder of Javelina and spokesman for the campaign, said in August that he gave the campaign the loan on August 4 to cover unexpected expenses from a legal challenge by the Arizona Restaurant Association.

The restaurant owners behind the ARA, an influential organization led by Steve Chucri, one of five Maricopa County supervisors, doesn't want to see minimum wage go up and sued the campaign in an attempt to deny voters the right to decide the question. The ARA's lawyers argued that many of the campaign's signature gatherers were felons or had filled out their forms incorrectly, meaning tens of thousands of signatures should have been tossed. The workers are typically paid $3 to $5 for each signature they collect.

The ARA identified up to 85,000 signatures they claimed were no good, and expected to find even more invalid ones. At least 150,642 valid signatures were needed out of the 271,883 turned in by the campaign.

Yet before a deeper probe of the campaign's signature-gathering process occurred, Maricopa County Superior Court Judge Joshua Rogers dismissed the ARA's complaint because it hadn't been filed on time. The Arizona Supreme Court upheld the ruling on appeal.

The campaign had apparently run out money before the lawsuit was filed, though. On July 19, about two weeks after the July 7 deadline to turn in signatures to the state, Sign Here and the campaign — represented by Scheel — drew up a one-page amendment to their original contract. In the amendment, Burks made clear that the campaign owed $186,884.60 and would assess a late fee of $1,000 per day starting on July 18.

The campaign "understands and agrees that the final invoice amount is requires for [Burks] to pay individuals already-earned monies," the contract states, adding that if Burks is sued by the signature gatherers, the campaign will cover the costs.

Scheel signed the amended contract.

About a month later, Burks says, Scheel promised falsely that the money was on the way.

Burks provided New Times with a screenshot that shows a text exchange with Scheel on Friday, August 19:

"Bill, Please send me a text once the wire has been. Thank you," Burks texted.

"The wire has been initiated," Scheel texted back.

But the following Monday, the money had not materialized in Sign Here's account.

"Sorry," Scheel informed Burks in another text. "We have been on conference calls with the national funders all morning. We've been instructed to hold off any further wires till after the Supreme Court rules on the appeal, which we hope will be Friday."

The state Supreme Court upheld Rogers' ruling on August 30, clearing its final hurdle to make the ballot.

Scheel says Sign Here invoiced the campaign a total of $965,000, of which the campaign paid $900,000.

"We paid 93 percent of everything that was due," he says.

The campaign contracted with Sign Here for more than just making the ballot, he argues: "It was about making sure circulators were qualified. She promised 80 percent validity — it came in at barely 50 percent. That's not acceptable."

The lawsuit cost the campaign $70,000 in legal fees, and Burks' company "nearly put the campaign in jeopardy," he says.

Scheel admits that he doesn't know whether Judge Rogers would have thrown out enough signatures to void the measure, had the ARA's challenge been filed on time.

"No one ever did the math on our side," he says.

But that isn't the issue, Scheel maintains. Burks didn't properly vet the signature gatherers, which cost the campaign $70,000 by leaving a potential vulnerability for the ARA to exploit.

The campaign recouped $33,500 of the legal fees via a settlement with the ARA, Scheel says. Arizonans for Fair Wages could have asked for up to $55,000 in legal fees, but decide to settle rather than prolong the fight, he says.

Scheel also confirms, as he told New Times in August, that the campaign is about to receive $1.5 million in donations from its national backers to pay for marketing and promotion of the measure in the final weeks before the election. Some of that money has already trickled in, he says, and the campaign has used it to pay 15 of the signature gatherers who haven't received checks from Sign Here.

Burks did such a poor job, Scheel says, that according to the campaign's calculations, she owes the campaign $35,000.

"She's a small-businessperson who unfortunately and sadly dropped the ball," he says.

Burks says she's upset and frustrated by the situation. Signature gatherers keep contacting her, asking when they'll get their last checks.

"They're hurting bad," she says. "My phone's blowing up every day."

By her account, adding in the $1,000-a-day late fee, Arizonans for Fair Wages now owes her company $143,000.

"I'm standing firm: You owe the money, you need to pay it," she says.

Burks says she doesn't have the money to pay the petition gatherers the remainder of what they're owed and says she made "no profit" on the project. Campaign officials took advantage of Sign Here to make a strong final push to collect more signatures before the July 7 deadline, even though they were broke at the time, she adds.

"They told me in the last week: Get as many as you can because our volunteer efforts suck," she says. The workers came up with an additional 35,000 signatures.

"My team and I, we worked so hard in the 120-degree heat," she says. "I was paying bonuses. I haven't made one damned dime on it. I really wanted to see it happen, for the people."

At least one signature gatherer is suing Burks in Maricopa County Justice Court.

Donna Fox worked for Sign Here before returning home to Kingsport, Tennessee. She has been staying in Scottsdale for the past couple of weeks, making the nearly 2,000-mile trip to resolve the issue.

Fox says her work for Sign Here was impeccable, and that Burks' company owes her $1,320 for her last week's work. She is suing for three times that amount, as allowed under state law.

She could probably make a deal to get her money from Arizonans for Fair Wages, Fox says. "But I don't trust them."

Even if she wins her suit, Fox says she's not sure whether she'll ever see her money. But she's hoping Burks wins her suit against the campaign, which Fox believes treated Sign Here badly.

"This is like Donald Trump strategy," Fox says of Arizonans for Fair Wages. "You can do the work, but we're not paying you. They don't walk the walk they're talking. This is nothing more than business for them."

As for Burks, with whom Fox says she shares a friendly, albeit contentious, relationship: "I chew her out all the time. I tell her she's a complete shithead because she led people to believe the check was in the mail."

The campaign offered to settle the suit for $32,500, Burks says, but she turned them down because it wouldn't cover the money she owes to the petition gatherers.

"My circulators really need their money to pay rent and put food on the table," Burks says. "I believe Arizona Fair Wages just don't care about the people who worked so hard to get their issue on the ballot."

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