Heidi’s Workers Calling in Sick to Protest Sporadic Paychecks

Several employees of embattled Heidi’s Frogen Yozurt Shoppes said Wednesday that they are engaging in an indefinite sickout because they have been paid only sporadically since early November.

All but two or three of the approximately 10 staffers at Heidi’s headquarters in Laguna Hills called in sick Wednesday and will continue to do so until they are paid, several workers who requested anonymity said.

Shortly before noon, the only people in the office were Heidi A. Miller, company founder and president; Brian Pallas, executive vice president; the company’s purchasing agent, and a regional manager.

Pallas, however, denied that employees were engaging in an organized boycott.

“It’s business as usual,” he said. “People are working--some work out of their homes, some are traveling. . . . Some are out in the field. . . . There are a lot of people (out) with bronchitis.”

Miller and Pallas have agreed to sell the chain to Steve’s Homemade Ice Cream of New York. The sale could end months of turmoil at Heidi’s, which has debt of $3.6 million and assets of $1.6 million, Steve’s executives said.

Two weeks ago, Steve’s executives gave Heidi’s employees assurances that Heidi’s would try to pay them by last Tuesday, Heidi’s workers said. Steve’s executives could not be reached for comment Wednesday.

The Heidi’s employees said workers were not paid Tuesday.

Pallas acknowledged that some of Heidi’s staffers “haven’t been getting full paychecks.” But he said that others “are getting substantial salaries.”

Pallas said Heidi’s had trimmed its corporate staff by about half in layoffs Dec. 1 and Jan. 1.

Meanwhile, Tokyo-based Nissin Sugar Manufacturing Co. recently filed a lawsuit in federal court in Santa Ana to recover $888,888 it paid to Heidi’s last year as a franchise development fee. Nissin had planned to open more than 350 Heidi’s stores in Japan. The suit accuses Heidi’s of fraud.

And the state Department of Corporations has asked Heidi’s to cease all offers to sell franchises in California “because its franchise registration omits many material items,” said Judy Hartley, senior counsel with the department. “To use the documents currently on file with this office would constitute a fraud.”

Heidi’s agreed to comply with the department’s request because “they know we’d be all over them if they didn’t,” Hartley said.

Steve’s executives have said they are in the process of filing papers to be able to sell franchises in California.

Miller declined Wednesday to discuss the company’s problems.

But in a letter, she complained that “we are victims of greed and deceit in a world where, unfortunately, capitalism rules. Heidi’s has . . . been subjected to vultures preying on Heidi’s undercapitalization.”

In the letter, Miller said that Heidi’s buys its yogurt from two suppliers--Honey Hill Farms in Concorde and Continental Culture Specialists in Glendale. The Times Orange County Edition reported that Honey Hill was the firm’s sole supplier.

Also on Wednesday, Heidi’s filed court documents denying that the company and its executives defrauded a former suitor, Johnston Foods. Johnston Foods sued Heidi’s in December to recover $150,000 loaned to the yogurt chain. But according to Heidi’s court papers, Johnston’s failed to satisfy its obligations in the scuttled merger deal.