Employees, former owners left in lurch after major Twin Cities produce company folds under new owner

H. Brooks and Co., the 116-year-old fruit and vegetable distributor in New Brighton, fired its workers and ceased operations earlier this summer, just weeks after its sister company — St. Paul-based J&J Distributing — went belly up.

Now former H. Brooks employees say their employer stole money from them, including wages, health care premiums and contributions to their retirement accounts.

"There is a lot of criminality going on there, for sure. There is a lot of fraud," Jon Lemley, a former H. Brooks worker, said. "If I was taking somebody's money, I would be in jail."

The rapid demise of two of the Twin Cities' leading produce wholesalers at the hands of a new owner has left a trail of frustration among suppliers, employees and the companies' founding families.

J&J shuttered operations in March, less than two years after Jason Jaynes, an investor based in Edina, bought both companies and partly merged them under a new name, New Harvest Foods.

Jaynes shifted his resources to H. Brooks in New Brighton, but it didn't take long for creditors and unpaid bills to find him there. Court records show a string of additional lawsuits, including from the employees' pension fund manager and life insurance fund, since then.

Jaynes could not be reached for comment for this story. A Star Tribune reporter was denied access to H. Brooks' main office. A handwritten request for comment left with the front door attendant went unanswered. No one answered the door at a home registered in his name in Plymouth.

Jaynes has failed to plead or respond to multiple lawsuits against him. Lawyers at the Edina firm Hellmuth & Johnson who represented him earlier this year withdrew their counsel weeks ago. They declined to comment.

From January to May, employees say H. Brooks withheld payroll deductions from paychecks but did not send the money to the appropriate institutions — such as the providers of health insurance and retirement accounts, and the processors of child support.

Many employees didn't realize it until it was too late. H. Brooks then laid off everyone in June, according to court documents and the employees.

Lemley received $20,000 in unexpected medical bills for treatment he and one of his sons received this winter when he believed his family was covered by the H. Brooks health insurance plan.

When Lemley called Blue Cross Blue Shield, the insurance company told him that his employer had stopped making payments on the company's policy in January — leaving the workers uninsured for months without their knowledge.

Jake Sander's paychecks from March through May withheld his child support payments as usual. But the county attorney's office later notified him that those funds never arrived.

H. Brooks' workers have not yet received a final paycheck for the last two weeks of May — just before management shut down operations, employees say. Their employer-sponsored retirement accounts are also frozen after H. Brooks stopped making scheduled contributions.

A trustee for the Central States, Southeast and Southwest Areas Pension Fund alleged in a June lawsuit that H. Brooks failed to pay more than $300,000 in required monthly pension contributions between November 2020 and April 2021.

Two weeks later, a Teamsters life insurance fund sued Jaynes and H. Brooks in federal court for failing to make contributions between January and May of this year. The court, in early August, ruled Jaynes and the company were in default for failing to respond to the summons, as required by law.

The questions every worker is asking: Where is Jason Jaynes, and where is their money?

Sander said he sat down with Jaynes earlier this summer to ask where his child support money had gone. Jaynes told Sander that he didn't know, but told him it's being worked on.

For the past two months, Sander said he sends one or two text messages a week to Jaynes asking the whereabouts of their paychecks, when their 401(k) accounts will be unfrozen and where the money is for his child support payments. "I never hear a thing back," he said.

"It makes you wonder if any taxes were ever sent. When tax time comes, are we even going to get a W-2?" Sander said.

Sander said he asked Jaynes about taxes and was told, "Well, it should've all gone through."

That doesn't reassure Sander. "Child support should've gone through, too, so where is all that money?" he said.

The workers are in a long line of creditors who say Jaynes owes them money, including numerous fruit and vegetable wholesalers across the country.

Many of the roughly 100 employees who worked for H. Brooks have filed wage theft complaints with the Minnesota Department of Labor and Industry. The agency has also heard from workers of the former J&J Distributing.

"Our Labor Standards unit has no closed cases for either of those employers," Jenny O'Brien, spokeswoman for the agency, wrote in an e-mail. "We cannot comment on open cases, or confirm or deny an open case exists."

The previous owners of both produce companies are also in court trying to get the businesses back. Both families sold Jaynes their companies in July 2019 and have yet to be paid the majority of the sale price.

The former owners of J&J Distributing, James Hannigan and his children Kevin Hannigan and Stephanie Melstrom, sold J&J for $9 million. Phillip Brooks, the former owner of H. Brooks, sold his family-run business for $4.9 million, court records show.

Lemley still blames himself for not spotting the warning signs earlier.

In January, the company ended its relationship with a payroll technology application that provided employees access to their pay records, deductions and withdrawals. Management told workers it was because the app was broken. The next paycheck came with no line items, just a check for the same amount as before.

"When our checks started showing up blank for deductions, I should've started questioning a little bit more," Lemley said. "The money was there. He deducted it out of our checks and just kept it."

Lemley said he liked working at H. Brooks and the workers genuinely wanted it to succeed, but since it shuttered in late May and these issues have surfaced, he found a new job.

He's now on payment plan for the $20,000 medical tab that should've been covered by his employer's health insurance plan — a plan that he and his colleagues contributed to out of their paychecks. "I'm just trying to stay ahead of the bills so it doesn't hurt my credit rating," Lemley said.

Sander's dad and three sisters also worked at H. Brooks. They've also all taken new jobs. Other former workers, who said they didn't want to be identified, are still seeking new employment citing low pay in many places.

"This whole thing has been bizarre," Lemley said. "It makes you look at your fellow man and realize there are still people out there that would totally screw you over and screw your family over. It hurts, you know. It is a weird thing."