As recently as February, Mayor Jerry Dyer was smiling and taking pictures with Bitwise Industries co-CEO Jake Soberal.
Bitwise launched a new program to help small businesses adapt to new technology in the post-pandemic world. The city offered a grant for the program. Dyer was on hand.
“This center will provide local business with FREE training and the skills necessary to get through this digital economy,” Dyer wrote on Twitter at the time.
Nearly four months later, Dyer sent a letter to Soberal and co-CEO Irma Olguin Jr., warning them that Bitwise may be in violation of state law regarding layoffs. He also told the company they are late in paying their city business taxes.
“Bitwise related entities have not reported any gross receipts nor paid City business taxes since September 2021. Please provide an accounting to the City Controller within 30 days of receipt of this letter, failure to do so may result in further action,” Dyer wrote in a letter Wednesday.
The city passed through a $1 million grant from federal ARPA funds. In a prior statement, Dyer said the city distributed half of that so far.
A Bad 10 Days for Bitwise
Through GV Wire’s reporting in the last 10 days, it has been revealed that Bitwise:
- Is late on paying Fresno County property taxes;
- Late in paying its rent;
- Has not properly paid employees;
- Allegedly withheld 401(k) contributions from employees;
- Faces a lawsuit from a business partner, accused of breach of contract for receiving a loan using its property as collateral;
- Sought short-term, high-interest rate bridge loans from local business leaders.
On Monday, the company furloughed its 300 Fresno-based employees, and hundreds of others around the country. The company said it is not a layoff, but has been silent since the announcement.
That includes no longer using a public relations firm that has handled its media in recent years.
Skeptical of Furlough
In the same letter, Dyer expressed skepticism that Bitwise furloughed employees. The mayor used quotation marks around “furlough.”
Dyer said that Bitwise failed to inform its workers nor the city of the employment action. State law, known as the WARN Act, requires at least 60-day notice. However, there is some question whether such action applies to just layoffs, or in Bitwise’s case, “furloughs.”
The California Employment Development Department says Bitwise failed to inform state officials as well, required by law.
“The City reminds Bitwise that regardless, it has legal obligations to its employees, and to the City. Bitwise and its affiliated entities are encouraged to immediately comply,” Dyer wrote.
Councilman Mike Karbassi has called a news conference for Thursday afternoon to discuss the issue.