Seeing red

After being lured by the promise of summer jobs with big earnings, students at Johnson & Wales regret ever becoming involved with University Painters

by Steven Stycos

IN MARCH, James Stapleton, a senior at Johnson & Wales University, landed what he considered a tremendous summer job. Virginia-based University Painters hired him as a summer outlet manager for the Providence area.

As a business management major, Stapleton thought this was a great opportunity, he explained recently in front of his Federal Hill apartment, since he'd get "to run a business from start to finish in a short amount of time." Plus, the 22-year-old would make at least $5000, according to University Painters, and receive college credit.

But as the summer painting season winds down, Stapleton and other college students in New England say they're sorry that they ever responded to University Painters' flyers.

Despite working the 60 hours a week recommended by the company, Stapleton will be fortunate to make $2000 for the summer. And that amount doesn't include an $800 cell phone bill, wear and tear on his car, and $200 in additional expenses. Other managers for University Painters tell similar stories, and things may get worse -- the employment contract permits University Painters to fine them $3000 if they quit or are fired before September 30.

Billing itself with a registered trademark as "the Educated Choice," University Painters has grown significantly since it was established in 1991, and the company has benefited from highly favorable coverage in some college newspapers. A 1997 story in the Cavalier Daily at the University of Virginia, for example, was headlined, "Firm lets students paint wallets green."

Joshua Jablon, the founder of University Painters, told the Cavalier Daily that he started painting houses as a student at Temple University in Philadelphia in 1986, and that he "decided to franchise the small business because I felt I could teach others the trade." Headquartered just outside Washington, DC, in Alexandria, Virginia, University Painters operates in 10 East Coast states and has been known to have more than 100 student franchises.

But other college students echo the gripes expressed by Stapleton, and the problems extend beyond Rhode Island. After interviewing 11 student-managers employed by University Painters, the Hartford Courant found that most of them expected to lose money for their efforts this summer. Others complained of inadequate training, misleading recruiting, and slow payment for painters. Fourteen of University Painter's 24 New England managers quit by mid-August, the Courant found, and some are being pursued by the company for the $3000 fine.

"It basically sucks," says one manager, who asked to not be identified for fear of being fined. "They get college students looped into these contracts very fast, and if they want to quit, they can't, because they owe 'em $3000."

Reached at his Virginia office, Jablon declined to comment. But in August, he told the Courant, "This is not for the meek. It's a hard, challenging job that requires a lot more than a typical summer job. I'm not going to tell you its been a stellar year. There's a lot of guys who are frustrated in New England."

But not just employees of University Painters are upset. Since 1997, the Better Business Bureau of Metropolitan Washington has logged 15 complaints against University Painters for communication problems and poor work quality. The bureau neither endorses nor approves of businesses, but compiles information so consumers can make their own decisions.

And after hearing from Stapleton and others, John Laurent, a career services coordinator at Johnson & Wales, decided the university will no longer permit University Painters to recruit on campus. Laurent, who wouldn't comment to the Phoenix without authorization from the university's public relations department, told the Courant, "You learn that not everyone out there has the best intention for the students."

USING FLYERS, mailings and campus recruiters, University Painters enlists college students each winter to be front-line managers for the following summer. The company's Web site (www.univpaint.com) urges students to apply "for a unique summer job," handling $40,000 to $100,000 in annual sales. "The manager," the pitch notes enticingly, "will gain hands-on practical business experience in all aspects of running a business." No prior painting experience is required.

The Web site also makes conflicting claims about expected earnings. One link states that managers make between $5000 and $10,000 for a summer's work, while another section boosts of average earnings between $7000 and $15,000. Jablon refused to discuss average earnings with the Phoenix, but he told the Cavalier in 1997 that students can earn between $8000 and $30,000 in a summer.

Like Stapleton, another local outlet manager, 27-year-old Art Foster of Wrentham, Massachusetts, says he'll make less than the minimum wage for his summer work. Foster, a Johnson & Wales sophomore, received a letter from University Painters last winter and was hired after going to two interviews. Like other prospective managers, he signed an employment contract and had three weekends of training outside of Boston, in Brookline and Waltham, Massachusetts.

Foster says he then followed company instructions for drumming up business. He distributed door hangers and, prodded by e-mails from University Painters, placed signs on public property and on telephone poles, in violation of local ordinance, with his father. The Massachusetts communities of Attleboro and Franklin threatened to fine him if he continued, he says, so he stopped.

Until painting began, managers were paid $10 per estimate. Despite his effort, Foster says, he made only about $180 by doing estimates, and his revenues were undercut by expenses. As required by his contract, Foster bought a pick-up truck for $1000, a ladder rack for $300, brushes and other tools, and ran up long-distance phone bills and gas and truck repair costs -- none of which are reimbursed by University Painters.

He also hired painters, but several quit soon after. "They hated the way they were getting paid," Foster explains.

Under the University Painters system, Foster got a 3 percent commission when he landed a job. Estimates are made by the amount of time required, and when the job is finished, managers receive an additional $3 for each hour of work. Painters, however, receive nothing up front and are not paid until after they finish a job. Neither manager nor painters receive health insurance.

Two painters who worked for Stapleton, John Cole, a 21-year senior at Johnson & Wales, and Christian Knoll, a 19-year-old sophomore at Gettysburg College in Pennsylvania, say they completed their first house in June, but weren't paid until August. Then, says Cole, he couldn't work for a month, because Sherwin-Williams paint company restricted University Painters' credit, and Stapleton was unable to buy more paint.

Knoll says his colleagues and he all but finished painting a Warwick house in July, but have yet to be paid, because the job requires one more gallon of deck stain that Stapleton can't pry lose from Sherwin-Williams. Both painters say they would work again for Stapleton, but not for University Painters.

Another problem, notes Stapleton, is that if his estimate was inaccurate, the extra cost came out of his pay and the painters', not the money sent to corporate headquarters in Virginia. When a house in Seekonk, Massachusetts, unexpectedly needed two coats of paint on three sides, Stapleton had to pay for the extra paint. And because painters are paid by the job and not by the hour, they had to apply the second coat for free.

If the estimates were correct, painters were paid $9-per-hour. But in the tight labor market, Foster says, he had difficulty hiring and keeping painters. His supervisors then instructed him to hire subcontractors, but ordered him not to pay them more than 50 percent of the price for the job. Foster says he called 20 subcontractors from Attleboro to Cranston, and all but two refused the work when they learned how little he was offering. In the process, Foster rolled up $200 in long-distance phone charges that came out of his own pocket.

The failure of Stapleton and Foster to land much work was typical, and by the first week of July, Jablon started threatening his managers after they reported poor sales figures. In a July 6 e-mail, obtained by the Phoenix, Jablon warned New England managers, "If you don't do what is asked of you, I have told [General Manager] Shawn [Benevides] to Terminate your employment immediately, bill you $3000 and have a nearby manager get the production commission for subcontracting the jobs you have already lined up."

The next day, Matthew Myers, another New England general manager for University Painters, warned in an e-mail that any outlet manager who missed an appointment to make an estimate would be fined $100. Fines were not unusual. In May, 11 managers, including Stapleton and Foster, were fined $25 for filing late reports. And on July 25, Jablon made it more difficult to line up jobs, Foster says, by ordering outlet managers to increase prices by 11 percent.

The upshot, Foster says, is that after billing $22,000 in business for University Painters, he earned $100 a week while working 60-hour weeks. Stapleton says he did about $18,000 of business. Other managers interviewed by the Courant told similar stories of low earnings and unhelpful higher management.

ALTHOUGH THE painting season is winding to a close, managers still worry that University Painters may use a clause in the company's employment contract to put them solidly in the red for the summer. The contract, a copy of which was obtained by the Phoenix, states that if a manager is no longer be employed by University Painters on September 30, he owes the company $3000.

Robert Brooks, a partner in the Providence law firm of Adler, Pollock & Sheehan, who specializes in labor and employment law, calls the sanction "excessive." While penalties for quitting are not unusual, he says, courts tend to rule that they must be related to a company's training costs and lost sales. While a judge would likely enforce the provision if a manager quit immediately after completing training, Brooks predicts, the judge would be disinclined to do so if the manager was terminated for a lack of available work.

University Painters' contract also seeks to avoid any court review by authorizing any lawyer to waive a manager's defense in court. And it empowers University Painters to seize the manager's property without notice or a hearing to satisfy the financial judgment (including the fees of the lawyer who waived the manager's defense).

"That one is a new one on me," says Brooks. "It sounds ridiculous . . . My gut reaction is to say a court would not enforce that provision, but some lawyer wrote it."

The contract also bans former managers for University Painters from operating, investing in or working for a different painting company for three years in the continental United States. While non-competition clauses are common in some industries, Brooks notes, it's unusual to see one for a low-skill field like painting.

Companies have the right to protect unique computer software or a patented manufacturing process, but courts balance that with a worker's right to make a living. An employer must convince a judge that their contract is "reasonable" in length and the geographic area covered, Brooks says, and that they have a protectable interest, such as a unique way of gathering customers or painting houses.

On its face, a ban on painting in the continental US, when University Painters operates only on the East Coast, is unreasonable, Brooks says. So, he thinks, is a three-year ban.

Overall, Brooks believes, "That company is going to be hard-pressed to have a court enforce those provisions."

But one University Painter employee, who requested anonymity, thinks the company knows exactly what it is doing when it quickly signs college students to one-sided contracts. "They just think we're college kids, and they can take advantage of us," he says, "and we have to go back to school and don't have time to fight them."

Art Foster and James Stapleton

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