N.H. Department of Labor

The N.H. Department of Labor in Concord.

CONCORD — A man who promised to breathe new life into an old Swanzey mill and hire more than 200 people last year argued before the state’s labor department Thursday morning that he never had any employees.

“I’m not trying to lead anybody [on]; I’m not trying to offer anybody false hope,” Angelo Nastovski, owner of BetterBone Inc., said during the hearing in Concord. “I absolutely thought that this product would take off faster than it has.”

Nastovski announced to The Sentinel last August his plans to move into the old Homestead Woolen Mill complex on South Winchester Street in Swanzey, start manufacturing edible dog chews and hire 224 people by the end of the year. Hundreds attended a job fair the following month and applied for positions Nastovski said would pay at least $19 an hour.

But the business never received its certificate of occupancy from town officials to start production in the facility, and research by The Sentinel in October revealed inconsistencies and blemishes on Nastovski’s personal and professional record.

At the end of October, the N.H. Department of Labor launched an inspection into BetterBone after receiving complaints from people who said they had worked for the company without pay. Along with finding several other alleged violations that could come with civil penalties, the department’s inspector concluded in January that BetterBone owes $28,653.89 in wages to three employees: Lora George, who said she worked under contract as the marketing director for three weeks; Holly Morin, who asserted she worked for eight or nine weeks last summer as the national sales manager; and Christy Whitcomb, who said she was hired as the human resources manager and worked for five weeks.

All three women testified Thursday as witnesses for the state, along with inspector Rob Campbell.

When the labor department issues its findings after an inspection, the business can pay the alleged back wages and assessed fines; try to solve the matter informally with the department; or attend a formal hearing.

BetterBone’s hearing was originally scheduled in March, but Nastovski was arrested by N.H. State Police less than an hour into the proceeding on a warrant out of Massachusetts for three counts of theft over $1,200, according to court documents. A news release from the Marshfield (Mass.) Police Department says Nastovski took more than $3,000 from a “senior citizen,” along with “thousands of dollars’ worth of marine equipment which he was to repair for the victim.”

Nastovski was released, and he has a status review hearing in Plymouth (Mass.) District Court in July.

At Thursday’s hearing in Concord, the labor department’s attorney, Danielle Albert, began by walking Campbell through his inspection process, including his research, interviews and how he determined the findings issued in his report.

Nastovski represented himself and did not bring any witnesses, though he submitted some affidavits for the record.

During his cross examination of the state’s witnesses, Nastovski attempted a few different arguments, most of which were overruled by the hearing officer.

He asked Whitcomb, who offered testimony by telephone, what her response was when she was told during her time at BetterBone that she wouldn’t get paid.

“We continued to try to work with you, because I initially believed that you had a product that was going to go somewhere,” Whitcomb said, adding that she and others tried to get sales for the company in the hopes that they would get a paycheck.

Nastovski argued that Whitcomb chose to stay, of her own volition, with no promise of financial gain.

“If her supposed work for us is at her will to work for us — not something that we were paying her a service for — she wanted to work for us and she was agreeing to be there and do whatever,” he said.

Zygmont asked if Nastovski was suggesting Whitcomb was a volunteer.

“No, I’m suggesting she coulda left at any time,” Nastovski said. “If she wasn’t gonna get paid within the first minute, first day, first week, she coulda absolutely have left.”

Albert objected, asserting that “whether or not the employees chose to continue working based on responses they received from the employer is irrelevant.” Hearing officer David M. Zygmont agreed.

During George’s testimony, she explained the origins of her offer letter, which outlines her start date, benefits and pay and is signed by Nastovski. George said Nastovski told her to type up an offer letter and present it to him for approval, so she got a template from her husband.

“I took the first draft to you. You struck several things that you didn’t like,” she said, alleging that Nastovski changed the benefits to kick in immediately and upped the commission from 3 percent to 6 percent.

Nastovski then asked several questions about her attempts to secure a mortgage at the time, but Zygmont objected and asked the relevance.

“This letter was not made for — and I did not write it or sign it — this letter was written so she could get a mortgage, not so she could work for us,” Nastovski said. He also asserted the signature at the bottom of the page isn’t his.

Zygmont again ruled the line of questioning irrelevant.

Later in the hearing, Albert asked Nastovski about the purpose of the September job fair, which he replied was “to get some kind of an employee list that we can call on” and not to immediately hire anyone.

She asked Nastovski if the people who claimed to have worked for him were volunteers, to which he replied no.

“They were not working. They asked if they — because it was an old mill shut down for 25-plus years — they were asking if they could just clean things up around the place,” he said.

No one was working in marketing or human resources, he said, just sweeping and vacuuming.

He said he was “surprised” to learn from Campbell during the inspection that people can’t work for a business without pay. The company kept partial employment verification forms on file, such as I-9s and W-4s, to make it easier to hire those people when the time was right, he said.

In her closing, Albert reviewed the numerous emails and text exchanges between the witnesses and Nastovski about work activity, as well as posts on the company’s Facebook page and articles in The Sentinel.

She also asserted Nastovski should be held personally liable for the civil penalties and back wages.

“Mr. Nastovski has indicated that people just came to hang out, that they weren’t working, that they were working on some kind of volunteer basis,” Albert said, “and I would submit to you that simply does not comport with … the consistent testimony provided by the four witnesses for you here today.”

Zygmont has 30 days to make a decision in the case.

Nastovski told The Sentinel after the hearing that he plans to appeal the ruling if it’s not in his favor.

BetterBone isn’t at the Swanzey mill anymore, he said, but he’s moving forward with the business and keeping it in New Hampshire. He declined to disclose the new location.

As for never starting production in Swanzey, Nastovski blamed town officials for “throwing one hurdle up after another,” referencing fire safety and building codes outlined in state law and required by the town.

Nastovski said during the hearing that Swanzey “has no idea how much we could’ve helped the community out.”

In the interview with The Sentinel, he acknowledged the potential impact in the region.

“There were some really nice people down there that, they probably lost their jobs because we couldn’t start, you know, and I feel really bad for them,” Nastovski said. “It was not our intent. Our intent was always to run a good, honest company.”

Along with the labor department’s allegations, BetterBone faces a lawsuit in Cheshire County Superior Court from New Jersey-based Selective Insurance Co., which alleges the business owes more than $28,000 in unpaid premiums on three policies.

Nastovski disputed that, too, saying the company doesn’t owe any insurance premiums.

Sierra Hubbard can be reached at 355-8546 or at shubbard@keenesentinel.com. Follow her on Twitter @SierraHubbardKS.