A thriving liquor business co-owned by Democratic Rep. David Trone, a multimillionaire wine magnate from Maryland, has privately laid off employees without providing critical outplacement services, while the congressman continues to publicly promote pro-worker protections in the House during COVID-19.
Business at Total Wine & More, the largest independent alcoholic beverage retailer in the country, is booming, according to more than three dozen documents detailing the private company’s internal financials obtained by The Daily Beast.
As Americans remain advised to stay at home to help mitigate the spread of the coronavirus pandemic, Total Wine & More, a multi-billion dollar company, has seen large growth. Sales are up 19.2 percent from the same time period in 2019, according to the organization’s internal consumer sales tracker and insight reports.
Asked about the decision to lay off employees in a financially thriving company during the country's public health and economic crisis, a representative for Total Wine & More said they are starting a realignment to better meet the company’s priorities, and stressed that Trone is not involved in operational decisions.
A spokesperson for Trone’s congressional office said, “We have no comment—this office doesn’t have anything to do with any business or company.”
Still, since arriving in Congress in 2018, Trone has fashioned himself a champion of the working person, introducing legislation to strengthen workers’ protections to give them “fair warning” in the event of sudden changes like layoffs.
But at his own business, one worker told The Daily Beast, no warning, fair or not, was given.
On March 16, when many residents were just beginning to socially distance out of an abundance of caution, the company also saw a massive uptick in demand: 74 percent growth in sales across all products from that same time the previous year, according to internal figures. On the week of April 20, the company saw over 42 percent growth in sales from the same week in 2019.
Those strong financials, coupled with positive messaging internally from senior leaders touting success, provided some reassurance to employees that jobs at Total Wine & More would likely be secure, even as the country’s unemployment rate reaches nearly 15 percent nationally.
But there were murmurs of potential restructuring in the works for several weeks.
“Vagary after vagary,” a Total Wine & More employee, who works full-time in the Bethesda headquarters, told The Daily Beast. “My thinking was when you are making that type of money, you have some corporate moral obligation to not kick people to the side.” The employee was granted anonymity in order to speak candidly about private conversations.
Trone, a wealthy Democrat who has donated to and endorsed former Vice President Joe Biden’s presidential campaign, recently highlighted the need for Congress to approve the $3 trillion coronavirus stimulus relief bill, which the House passed on Friday night.
“This problem we have with COVID, as we all know, is just absolutely unprecedented, health damage, lives destroyed. But also the business infrastructure just destroyed. We’re on our way right now to 20 percent unemployment,” Trone said on Friday in an interview with radio station WFMD out of Frederick, Maryland. The stimulus relief bill would extend unemployment benefits to January 2021.
In 2016, Trone broke House race records by spending $13 million on an unsuccessful Democratic primary bid to succeed now-Sen. Chris Van Hollen in Maryland’s 8th congressional district, which was won by Rep. Jamie Raskin. In the 2018 midterms, he won in the neighboring 6th district by spending nearly $12 million of his own money on the primary. He spent an additional $6.4 million in the general election, according to the Federal Election Commission. Some residents argued at the time that the business owner was trying to buy a congressional seat.
By the time he reached Congress, one of Trone’s first priorities in the House was championing legislation to “strengthen worker protections by providing them with fair, advanced notice from layoffs or business closures.” In November 2019, he introduced the Fair Warning Act alongside Rep. Tim Ryan (D-OH), with the same goal.
“Workers deserve better than losing their jobs with what feels like no warning,” Trone said in a statement at the time the bill was introduced.
“A top priority throughout the #COVID19 pandemic is ensuring that workers and families are able to navigate this crisis. Today, I connected with labor leaders from across the state to hear about how the government can provide support for the labor community during this time,” Trone tweeted in mid-April.
That combination—a financially thriving business co-owned by a leader promoting his “fair warning” bill—made the reality of being suddenly laid off with little support hard to fathom, according to the employee.
On May 15, around mid-morning, the employee was notified of their layoff through a video call, with a stated end date of June 1. A human resources representative, who was also on the call, said the employee would be receiving vacation hours and health insurance through the end of that month. No other outplacement services, such as a severance package, were offered.
The human resources representative then followed up in an email with a FAQ PDF document about the company’s realignment, noting explicitly that it was “confidential” and for “internal use only.” That memo, also obtained by The Daily Beast, listed four questions and answers; two questions pertained to layoffs.
“What if I do not want to apply for a new role?” the bolded question read. “No further action is needed and your last day with Total Wine will be June 1,” the pre-written answer followed.
“If I am laid off on June 1, what happens next?” the last question asked. “You will receive your remaining PTO balance as a lump sum in your last paycheck. You will also be eligible to continue your current benefits through June 30. Additionally, you will be able to file for unemployment.”
Later in the afternoon, the employee attended a virtual town hall to discuss, in part, the restructuring, including the elimination of certain positions. The employee indicated that senior leaders said they would try and help employees, but remained vague about actions. During the town hall, leaders did not mention the total number of employees that were being let go, but noted it would be “minimal.” They did not elaborate further.
In a statement, Edward Cooper, vice president of public affairs & community relations, said the layoffs were a necessary adjustment to adapt to the changing needs of the business.
“Total Wine & More is a private, family-owned business. The day-to-day management decisions of the business are made by an executive management team in the corporate office in Maryland, which does not include the owners,” said Cooper.
“In response to the dramatic changes to our business over the last few months, the management team has started the process of realigning a small number of the company’s resources in the corporate office to meet the company’s changing needs and business priorities,” Cooper said. “Our goal is to shift as many of our corporate employees into these new critical areas as possible. The process just started in the last few weeks and is still underway.”
“The nature in which it happened came off as extremely callous,” the employee said. “The organization kept people completely blind.”
According to the employee, no official correspondence about the decision to let employees go, or the lack of severance among other outgoing help, was sent. “They did do a hell of a job at leaving a limited paper trail,” the employee said.