Welstad resigned in June after admitting to taking a $3.5 million loan that Labor Ready's board of directors regarded as unauthorized.
As of 1999, Welstad owned 74 percent of all preferred stock. In August, the Company repurchased all of its preferred stock. The Company's 2000 proxy statement filed September 15 does not mention Welstad's owning preferred stock nor does it say how much was paid for the repurchase or the source of the funds used in the repurchase.
"The timing strongly suggests a repurchase of Welstad's stock may have been arranged in connection with his departure from employment," the request says. "If so, such a repurchase should have been disclosed like any other golden parachute."
The request, which was filed on September 20 by attorneys Andrew J. Kahn and Richard G. McCracken of San Francisco-based Davis, Cowell, & Bowe, asks the SEC to require Labor Ready to disclose the appropriate information. The Company's annual shareholder meeting is on October 25 in Tacoma, Washington.
Labor Ready, Inc. is one of the largest and fastest growing temporary employment agencies in the country. It operates 839 offices in 49 states, Puerto Rico, Canada, and the United Kingdom.
The Building and Construction Trades Department owns Labor Ready stock and is the umbrella organization for the 15 international building and construction trades unions in the United States and Canada, representing 1.5 million construction workers. In April, the unions launched the "Temp Workers Deserve a Permanent Voice @ Work" campaign to shed light on the abuse of temporary agency workers in the construction industry.
September 20, 2000, Press Release from the Building and Construction Trades Department.
For more information, contact Lindsay Barenz at (202) 842-3100.