Feds Petition D.C. Judges to Find ‘Santa Barbara News-Press’ Owner in Contempt of Court

A contempt of court ruling may be in the cards for Wendy McCaw, the Santa Barbara News-Press owner and co-publisher who shamelessly filed for bankruptcy earlier this summer. She owes nearly $3.5 million to her former newsroom employees and a former unit of the Teamsters in recompense for flagrant violations of labor law dating back 16 years.

Since last November, the National Labor Relations Board (NLRB) has been petitioning the Washington, D.C., District Court to issue a contempt of court ruling against Ampersand Publishing LLC, the company set up by McCaw to run the News-Press, for its “inexcusable neglect … indeed its willful refusal” to comply with a 2012 board order that was upheld in the D.C. Circuit Court of Appeals in 2017.

“Orders are not issued by courts for parties to obey at their leisure,” the board states.

The petition was automatically put on hold after Ampersand filed for bankruptcy on July 21 this year. But in a memorandum dated August 21, the board asked the district court to lift the hold and proceed with a contempt of court finding, including “prospective fines” and attorneys fees. In the past, some employers found in contempt have been slapped with daily fines until they complied with board orders.

“The NLRB’s primary purpose in seeking a contempt finding is to vindicate the integrity of its own authority as well as that of the D.C. Circuit…,” the board stated. “Contempt proceedings … have the primary purpose of upholding the dignity and authority of the court.”

Ampersand has until September 12 to file a response, and the board has until September 19 to reply. Soon after that, the district court is expected to rule on the question of whether to lift the bankruptcy hold and proceed with deliberations on a finding of contempt against Ampersand or McCaw.

McCaw, Obey the Law!

On behalf of dozens of my former colleagues, the union we organized, and the community we served; and as a reporter and union leader who was unfairly fired by McCaw, I fervently hope the judges will do the right thing. Maybe the courts will finally catch up to our local plutocrat, ensure that my colleagues are paid what they’re owed, and — for once — collect some meaningful penalties. How can you be found guilty of breaking labor law for years on end and get away with never making your employees whole?

Ampersand’s Chapter 7 bankruptcy filing for liquidation is not an ordinary case. Everybody in town knows that McCaw, a Hope Ranch resident, bought the paper in 2000 as a billionaire twice over and could pay off her debts without blinking an eye. We look with considerable skepticism at McCaw’s 2014 transfer of the News-Press building in De la Guerra Plaza and the printing press on Kellogg Avenue in Goleta (total assessed value: $27 million) to other companies that she set up, apparently so they wouldn’t be on the books or on the hook at Ampersand.

By the way, I don’t stand to get a cent from McCaw, though I believe she fired me and seven other reporters illegally in retaliation for union activism, just months after we voted to join the Teamsters in September 2006. We lost our case to a panel of anti-union appellate judges in 2012. 

But McCaw finally was found guilty of breaking the law, having, in the board’s words, committed a host of “flagrant unfair labor practices” beginning in 2007. In the saga of the News-Press Mess, as it is locally known, it took a decade, amid a thicket of appeals by McCaw’s union-busting lawyers and Republican politicking against the labor board in Congress — but in 2017, the D.C. Court of Appeals ordered McCaw to bargain with her employees in good faith, sign a union contract with her newsroom, and stop “interfering with, restraining, or coercing” employees who were simply exercising their rights as union members.

Specifically, the court found, McCaw illegally gave the Teamsters the runaround in contract negotiations, fired two more workers, suspended merit pay after the union vote, and hired temps to displace reporters.

McCaw did not comply with the court order. Then, in 2019, an appellate court upheld a board ruling requiring her to pay $2.2 million to make her employees whole and compensate the Teamsters for expenses incurred during years of bad-faith bargaining at the News-Press.

The Teamsters unit we joined, the Graphic Communications Conference, recently split off from the Teamsters to form the Printing Packaging & Production Workers Union of North America. With interest, the amount McCaw owes her employees and the Printing Packaging & Production union has grown to nearly $3.5 million.

In bankruptcy court documents, McCaw claims that Ampersand has only $532.96 in the bank, plus $116,000 in assets, including accounts receivable, office furniture, vehicles, and artwork. The News-Press historical archive, saved on microfiche and in newsprint clippings, is listed in court documents as an asset with an “unknown” value.

The total amount that McCaw owes to 818 creditors, including former subscribers, employees, businesses, nonprofits, schools, and government agencies, is $5.1 million, the record shows. Also included in the total is a $1.5 million loan that McCaw made to the News-Press in 2014. The total apparently leaves out nearly $1.3 million in interest that McCaw owes to her former employees and the union.

On Thursday, an initial meeting of McCaw’s creditors was scheduled to be held at the U.S. Bankruptcy Court: Central District of California, by phone, beginning at 9 a.m. But at that time, because of the public’s interest in the case, Jerry Namba, the court-appointed bankruptcy trustee, says he will announce a postponement to 1 p.m.

Namba will run Thursday’s meeting, at which McCaw’s creditors can question a representative of Ampersand about McCaw’s assets. Creditors are not required to attend, and no decision in the case will be made. The meeting is public. The call-in number is (866) 918-7970, using the code 5723963.

Melinda Burns is an award-winning investigative journalist with 40 years of experience in the business, including 21 at the News-Press. As a community service, she offers her reports to multiple publications in Santa Barbara County, at the same time, for free.