Two more 2015 US Continental squads have joined Team SmartStop on the list of teams whose riders claim their contractual wages were not paid, and have asked for payment through the UCI bank guarantee.
USA Cycling recently confirmed that riders for Champion System-Stan's No Tubes and IRT Racing filed claims against their respective teams' guarantees.
Champion Systems-Stan's No Tubes stopped paying riders in October, said former team rider Kevin Mullervy, but riders were paid in full last week after USA Cycling released funds from the escrow account that teams are required to set up as part of the licensing process. That process requires teams to deposit 15 per cent of the season's payroll obligations in a separate account to cover potential contract shortfalls.
USA Cycling Technical Director Chuck Hodge told Cyclignews last week that the Champion System-Stan's case was a good example of the bank guarantee working as it was designed.
“That was a good one,” Hodge said. “The riders were able to get paid in full out of the guarantee. It took a while but it was smooth, and there was great cooperation. The bank guarantee did what it was supposed to. It made up for a late-season shortfall and got the riders some money.”
The remaining 2015 case, however, is a little more messy. IRT Racing, a first-year Continental program in 2015, stopped paying its riders in May, so the 15 percent bank guarantee is likely not high enough to cover the riders' as-yet-to-be-paid missing wages. That case is still being worked out, Hodge said. Accusations of contract fulfillment on both sides have clouded the situation.
Team co-owner Ray Asante told Cyclingnews a near mutiny among riders following the Tour of the Gila precipitated a change in directors while accounting irregularities and contractual issues with secondary sponsors caused a massive budget shortfall very early in the season.
“I would have been better off putting my money through a shredder,” said Asante, who, along with co-owner Lynn Perrando, eventually scrapped plans for a 2016 team because the 2015 venture proved to be so financially untenable.
Team rider Erik Slack told Cyclingnews the problems started when he tried to deposit his paycheck for April and his bank returned it for insufficient funds.
“My April paycheck just straight up bounced on me when I went to the bank,” Slack said. “It was a little different for the other guys on our team. Their paychecks went through in April. Then by May the team started getting emails from management, at first saying payment would be delayed two days, then payment will be delayed until the end of the week, and then before you know it was the end of the month. Then in the middle of May, we got an email saying racing would be suspended because riders aren't meeting expectations, etcetera.”
Slack eventually left the team in June when he signed on with Jelly Belly-Maxxis, but other riders on the team continued to race with IRT at the Cascade Cycling Classic in July.
Slack told Cyclingnews this week that USA Cycling informed him that the team's owners had agreed to the amount riders were owed. Now it is a matter of dispersing funds from the 15 percent bank guarantee.
“Now the waiting game will be what the actual percentage will be that I receive, as there are nine riders and multiple staff, with all of the claims exceeding the 15 percent guarantee,” he said.
Hodge, who took over his current position with USA Cycling in November, said that although bank guarantee claims take place fairly regularly at the Continental level, 2015 has been an exception.
“I think this has happened about every year,” he said. “Generally there is some kind of claim, but from my understanding this is a pretty rare year that three teams are going through this process.”