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June 3, 2020

Bankruptcy court orders Hair Cuttery parent to pay $1.1M in back wages

Photo | Flickr/Mike Mozart A Hair Cuttery location in North Haven.
By Sean Teehan

A U.S. Bankruptcy Court judge ordered the parent company of Hair Cuttery to pay $1.1 million in back-wages to employees, including workers from 13 Connecticut locations.

A ruling from the U.S. Bankruptcy Court for the District of Maryland last month, said Creative Hairdressers Inc., the parent company of Hair Cuttery, didn't pay its approximately 10,500 employees in 750 locations their final paychecks when they closed March 21.

"[Back-wages] remain unpaid because the governmental restrictions that were implemented in response to the COVID-19 crisis resulted in the sudden and unforeseen closure of the Debtors’ salons and corresponding depletion of virtually all of the Debtors’ liquidity," a court filing said.

In addition to back-wages, the court ordered Creative Hairdressers to pay more than $3 million to cover unpaid employee obligations (like 401(K) and bonuses).

In a statement, Creative Hairdressers President Phil Horvath said he supports the decision.

“We are extremely pleased to have reached a positive outcome that enables us to pay our talented salon professionals, field leaders and resource center associates, and then reopen our doors and save thousands of jobs for our outstanding salon staff,” Horvath said.

While Creative Hairdressers has filed for Chapter 11 bankruptcy, it hasn't permanently shuttered Hair Cuttery locations. The same bankruptcy court approved the business' motion to sell most of its assets to Atlanta-based HC Salon Holdings Inc., including the majority of its 750 salon locations.

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