Interfaith Worker Justice

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Wells Fargo Workers Claim Retaliation for Playing by the Rules

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From The New York Times:

by Stacy Cowley

At least 5,300 Wells Fargo employees have been fired for ethics violations like setting up illicit accounts without customers’ knowledge to meet sales targets. Now there’s another group of aggrieved Wells Fargo workers: people who say they were fired or demoted for staying honest and falling short of sales goals they say were unrealistic.

That second group of workers, who claim that they played by the rules and were punished for it, are starting to coalesce around two lawsuits that were just filed and that seek class-action status. The first was filed in Los Angeles last week by former Wells Fargo workers who say that while their colleagues created unauthorized accounts to meet cross-selling quotas, they were penalized or terminated for refusing to do the same. The bank’s chief executive, John Stumpf, has often stated his goal that each Wells customer should have at least eight accounts with the company. That aggressive target has made the bank’s stock a darling on Wall Street, the lawsuit notes.

On Monday, a federal lawsuit with analogous claims was filed in the United States District Court for the Central District of California, seeking to create a class of current and former Wells employees across the country who had similar experiences.

“These are the people who have been left holding the bag,” said Jonathan Delshad, the lawyer representing the workers in both suits. “It was a revolving door. If you weren’t willing to engage in these types of illegal practices, they just booted you out the door and replaced you.”

In a statement on Monday, Wells Fargo said: “We disagree with the allegations in the complaint and will vigorously defend against the misrepresentations it contains about Wells Fargo and all of the Wells Fargo team members whose careers have been built on doing the right thing by our customers every day.”

One former employee planning to join the lawsuit is Dennis Russell, 62, who said he was fired in 2010 after a five-year career as a telephone banker at Wells Fargo’s call center in Orange County, Calif. Mr. Russell handled incoming customer service calls and was expected to refer 23 percent of his callers to a sales representative for additional product sales, he said.

But the customers Mr. Russell spoke with were usually in dire financial shape, he said in a telephone interview on Monday. Looking at their accounts, he could see mortgages in foreclosure, credit cards in collections and cars being repossessed for overdue loan payments.

“The people calling didn’t have assets to speak of,” Mr. Russell said. “What products could you possibly offer them in a legitimate way?”

The two fresh lawsuits echo many of the allegations in a 2015 lawsuit filed by the Los Angeles city attorney’s office. Wells Fargo settled the case this month, agreeing to pay $185 million in fines, including a $100 million penalty levied by the Consumer Financial Protection Bureau, the federal watchdog agency that conducted its own investigation.

But some Wells Fargo employees tried, years earlier, to sound the alarm — with personally disastrous results.

Yesenia Guitron, a former banker, sued Wells Fargo in 2010 — three years earlier than the bank has admitted it knew about the sham accounts. Ms. Guitron became alarmed when, two months into her job at Wells Fargo, she noticed that a fellow banker at the company’s St. Helena, Calif., branch was opening and closing customers’ accounts without their permission.

Intense sales pressure and unrealistic quotas drove employees to falsify documents and game the system to meet their sales goals, she wrote in her legal filing.

Ms. Guitron said she did everything the company had taught employees to do to report such misconduct internally. She told her manager about her concerns. She called Wells Fargo’s ethics hotline. When those steps yielded no results, she went up the chain, contacting a human resources representative and the bank’s regional manager.

Wells Fargo’s response? After months of what Ms. Guitron described as retaliatory harassment, she was called into a meeting and told she was being fired for insubordination.

In 2012, the United States District Court for the Northern District of California sided with Wells Fargo and ruled that even if its sales targets were unreasonable, the bank had the right to use them as an employment yardstick. Ms. Guitron appealed the decision and lost again — leaving her with a bill for more than $18,000 in court costs.

“She put her neck on the line” and they punished her, said Yosef Peretz, the lawyer who represented Ms. Guitron. “She’s a single mom with two kids, barely making it, and her reputation was poisoned. No one would hire her.”

Ms. Guitron left the banking industry and now works in property management, he said.

Christopher Johnson, 38, a plaintiff in the lawsuit filed on Monday, said he hesitated to get involved in the legal case because it brought back memories of “a very dark time in my life.” He was fired in 2008 after working for Wells Fargo for five months.

In trainings, the company repeatedly emphasized the importance of its ethics code and urged employees to call its confidential hotline if they observed anything inappropriate, Mr. Johnson said. But just two weeks after he started working as a business banker in a Wells Fargo branch in Malibu, Calif., his manager began pressuring him to open accounts for his friends and family — with or without their knowledge. When he refused, he was criticized for not being a team player.

Mr. Johnson soon learned that his colleagues routinely opened unauthorized accounts for customers who they thought wouldn’t notice, like elderly clients or those who didn’t speak English well. Disturbed by this practice, he did as he was instructed during training and called the company’s ethics hotline.

Three days later, he was fired for “not meeting expectations,” he said. Broke, Mr. Johnson was evicted from his house and spent the next seven months living out of his truck. He put all of his possessions in a storage unit, then lost them to auction when he was unable to pay the storage bill.

Mr. Johnson, who now works as a writer, said he had stepped forward at his mother’s urging: “She was like, ‘Your story needs to be told. You got fired because you tried to do the right thing.’”

Mr. Russell also lost his home after he lost his Wells Fargo job. Unable to find a new position in the industry, he now works part time for a church in Costa Mesa, Calif., helping with its outreach programs for the homeless.

Last week, he watched — in disbelief, he says — as Mr. Stumpf was grilled by the Senate Banking Committee and insisted that Wells Fargo never wanted its employees to do anything unethical to meet their sales goals.

“It’s a crock,” Mr. Russell said. “They established the culture that made this happen — it comes down from the top.”

During the hearing, Mr. Russell said, “I was sitting there in a rage. The people who had a conscience, the employees who refused to go along, they deserve vindication.”

Workers’ efforts to band together to litigate cases against employers are often derailed by mandatory arbitration clauses that require them to address disputes privately and individually. Wells Fargo has such a clause in some of its employment agreements, but it was added only recently, in December 2015, according to Mark Folk, a spokesman for the bank.

Mr. Delshad, the lawyer pursuing the workers’ cases, said he thought the covered class could grow to “tens of thousands of people” nationwide.

“We’ve had former workers, and some current ones, calling our office all weekend,” he said. “We have a whole bunch of new plaintiffs to be added to the suit. It’s just unbelievable, the amount and scope of this fraud.”

Read more from The New York Times

Predictable Schedules Are the New $15 Minimum Wage

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A food service employee takes an order from a customer.


From The Atlantic:

by Adam Chandler

If it takes three examples to label something a fad, then San Francisco, Seattle, and New York City have collectively been some of American labor’s most prolific trendsetters. In recent years, the three coastal cities were among the first and highest-profile polities to instate a $15 minimum wage, efforts that begot statewide regulations in California and New York and inspired legislation around the country. This urban triumvirate is also part of a handful of American cities to adopt paid-sick-leave policies in recent years.

This month, following San Francisco’s lead, lawmakers in Seattle and New York City have set out to address another progressive cause: hourly workers’ schedules. On Monday, Seattle’s city council unanimously passed a proposal that will require employers to post the schedules of hourly employees at chain restaurants and large retailers no less than two weeks ahead of time. According to the city, Seattle’s Secure Scheduling Proposal is meant to benefit workers who face “erratic schedules, unreliable incomes, involuntary part-time status, not enough time to rest between opening and closing shifts, and coercion from employers to take shifts.” Employers, with some exceptions, will be required to compensate employees with “predictability pay” for last-minute schedule changes. The measure will go into effect next July.

The Seattle vote came just days after New York City officials announced its intentions for a similar plan, which focuses specifically on workers in the fast-food sector in what the city called a “natural next step" following the passage of a $15 minimum wage. Notably, New York's plan would apply only to fast-food workers. “In New York City, we know that most of our fast-food workers are not unionized,” said Freddi Goldstein, a deputy press secretary for Mayor Bill de Blasio. “They don’t have the support of unionized labor and collective bargaining behind them, which obviously helps a lot of our workers come to a better place in the workplace.” She added that the city is studying and consulting with Seattle and San Francisco as it maps out the policy.

While wages and overtime have long driven advocates to gather at the barricades, the issue of erratic scheduling is a concern that has emerged relatively recently, enabled in large part by the rise of scheduling software. Tracking the plight of hourly workers in 2014, Jodi Kantor explained in The New York Times how algorithms allow employers to gauge how and when workers are needed:

"Along with virtually every major retail and restaurant chain, Starbucks relies on software that choreographs workers in precise, intricate ballets, using sales patterns and other data to determine which of its 130,000 baristas are needed in its thousands of locations and exactly when. Big-box retailers or mall clothing chains are now capable of bringing in more hands in anticipation of a delivery truck pulling in or the weather changing, and sending workers home when real-time analyses show sales are slowing. Managers are often compensated based on the efficiency of their staffing."

For many workers, this software has also exacerbated the particulars of a long-standing system in the service industry whereby workers remain on-call (and unpaid) until they are needed, and scramble accordingly; technology has enabled major retailers to turn this practice into a science. (In recent months, several large companies have eliminated the practice.)

But like minimum-wage initiatives, the scheduling ordinances have vocal detractors. Opponents of San Francisco’s measure, which was enacted in 2014, claim that the new policy has led to job cutbacks and reduced hours as well as less flexibility for the service-industry workforce. Ahead of Seattle’s vote, retailers were particularly outspoken about their resistance to the scheduling bill. “In our opinion, the proposed Seattle ordinance would do nothing to improve upon our relationships with employees, and would impose administrative requirements that could make it more inefficient to run the business,” wrote an executive from Costco, a company frequently praised for its progressive business practices. Among those also standing in opposition to the ordinance were Starbucks, Home Depot, JC Penney, and others.  

Read more from The Atlantic.

Mass. lawmaker will keep up the fight against wage theft

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From The Boston Globe:

by Massachusetts State Senator Sal DiDomenico

WISH I could say I was surprised by the recent Globe investigation into the exploitation of immigrant workers (“The work they need, the perils they face,” Page A1, Sept. 18). Unfortunately, I’m all too aware of the unethical, unsafe, and illicit practices that are pervasive throughout the Massachusetts economy and the construction industry in particular.

I’ve heard from far too many workers who have been misclassified as “independent contractors,” cheating them out of minimum or prevailing wages and leaving them on the hook for medical costs when injured on the job. I’ve spoken with countless immigrants who have been exploited by their employers, going weeks without pay and left unable to care for themselves and their families.

Wage theft comes in different forms, but they all have the common denominator of hurting workers, families, and our communities.

That’s why I filed legislation to prevent this illegal practice and promote employer accountability by giving the state greater power to go after corrupt employers and providing the attorney general with additional tools to hold violators fully accountable.

I was proud to work with my Senate colleagues and friends in labor to get this bill passed in June, but our work isn’t over until this bill becomes law. I plan on filing it again next session, and my colleagues and I in the Legislature will once again have the opportunity tackle this problem. It’s time to stop talking about protecting workers and put our words into action.

Read more from The Boston Globe

Wage theft a growing concern in Cincinnati region

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The Enquirer/Patrick Reddy

From the Cincinnati Enquirer:

by Fatima Hussein

Brennan Grayson and Manuel Perez represent the region's low-wage and undocumented workers, who are often taken advantage of by the region's largest employers.

The respective director and membership coordinator for the Cincinnati Interfaith Workers Center, located in the Peaslee Center in Over-the-Rhine, have fought to improve conditions for workers in a variety of roles for the organization.

Last February, Grayson and Perez, along with several volunteers at the workers center, helped pass a local ordinance that prevents city contractors from engaging in wage theft.

Under the measure, if the city or another agency determines a company has committed wage theft, city officials would be able to have the money returned and the company would be barred from doing business with the city.

"Cincinnati’s ordinance is a model for all Ohio cities and sends a message that economic development projects will protect the dignity of wage earners," Grayson said.

The pair spoke with The Enquirer about the issues low wage and undocumented workers face in the area:

Question: What is the biggest issue your clients or workers who come to youface?

Answer: We run a worker rights hotline, 513-621-5991. Most people are looking for help with getting paid for their work. When people work but don't get a legal wage for all their work, that's wage theft.  For example, in 2012 the U.S. Department of Labor recovered $212 million dollars in unpaid wages theft, nationwide, but only $139 million was taken nationwide through street, bank, convenience store robberies. It is the crime wave no one is talking about.

Q: Explain what wage theft is and whether it is happening more often or not? Who is particularly susceptible to falling victim to wage theft?

A: Wage theft is the illegal withholding of wages that are rightfully owed to an employee. This can take the form of being paid less than the minimum wage, being shorted hours, being forced to work off the clock, not being paid overtime, being misclassified as an independent contractor so that overtime requirements do not apply, or, as is often the case when an operation winds down or an employee is laid off: not being paid at all.

Q: What was the biggest case your organization took on this year?

A: In the spring, the workers' center collaborated with a local union to uncover massive wage theft in the development of the Princeton pool. This resulted in over $140,000 in recovered wages.  But for us, all the cases are important.  Even small claims are big to us. The janitor who is ripped off, not paid for cleaning the Immaculate Heart of Mary parish offices, or the ironworkers who (say they didn't) get paid for reinforcing ironwork at the new apartment complex in Clifton, or the framers who help refurbish the many row houses in Over-the-Rhine into high-end condos. Some of the most important breakthroughs come through these smaller cases.  The cases that loom the largest are those we haven't won yet, like (allegations of) the tens of thousand in unpaid wages for framing work at the luxury Hunt Road apartments in Blue Ash.  Developers want their name in lights when the build something, but want to run and hide when the workers on the project don't get paid.

Read more from the Cincinnati Enquirer

State fines Texas-based construction company $767K for misclassifying workers

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From Pacific Business News:

by Duane Shimogawa

The state Department of Labor and Industrial Relations has fined Texas-based R&R Construction Services $767,095 for the misclassification of its workers as independent contractors that are part of the Maile Sky Court hotel-condominium redevelopment project in Waikiki.

The state said Monday that R&R has 20 days to appeal the citations.

“Law-abiding contractors who pay their fair share face unfair competition, and workers suffer when deprived of their rights and benefits,” Linda Chu Takayama, director of DLIR, said in a statement. “The visitor industry and a pleasant visitor experience is important to Hawaii, but Hawaii’s working people and law-abiding contractors need to benefit fairly.”

R&R allegedly misclassified 65 construction workers as independent contractors and, by doing so, it avoided requirements to provide unemployment, workers compensation, temporary disability and prepaid health care insurances, according to the state.

About a couple of weeks ago, the state said it was looking into this issue, with Labor Department personnel along with officials from the U.S. Department of Labor Wage and Hour Division and the Hawaii Department of Commerce and Consumer Affairs taking part in a site visit at the condo-hotel after receiving tips of the possible misclassification of workers.

The U.S. Department of Labor’s Wage and Hour Division, which enforces the wage and record-keeping provisions of the federal Fair Labor Standards Act, and the Hawaii Department of Commerce & Consumer Affairs, which enforces licensure, also have opened investigations regarding the employer.

“Legislators significantly increased the penalties for violations of workers’ compensation and temporary disability insurance laws by passing what became Act 187 just this year,” Chu Takayama said. “We believe that the increase in penalties from $1 per day to $100 for temporary disability insurance and worker’s compensation from $10 per day to $100 serves as a powerful incentive for employers to provide these coverages instead of just waiting till they are caught.”

Read more from Pacific Business News.

Immigrants Aren’t Taking Americans’ Jobs, New Study Finds

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From The New York Times:

by Julia Preston

Do immigrants take jobs from Americans and lower their wages by working for less?

The answer, according to a report published on Wednesday by the National Academies of Sciences, Engineering and Medicine, is no, immigrants do not take American jobs — but with some caveats.

The question is at the heart of the furious debate over immigration that has divided the country and polarized the presidential race. Many American workers, struggling to recover from the recession, have said they feel squeezed out by immigrants.

Donald J. Trump, the Republican nominee, has called for a crackdown on illegal immigrants, saying they “compete directly against vulnerable American workers.” He promises to cut back legal immigration with new controls he says would “boost wages and ensure open jobs are offered to American workers first.”

Hillary Clinton, his Democratic rival, takes an upbeat view, saying immigrants contribute to the economy whether they are here legally or not, by providing labor for American employers and opening businesses that create jobs for Americans rather than taking them.

The report assembles research from 14 leading economists, demographers and other scholars, including some, like Marta Tienda of Princeton, who write favorably about the impacts of immigration and others who are skeptical of its benefits, like George J. Borjas, a Harvard economist. Here’s what the report says:

• “We found little to no negative effects on overall wages and employment of native-born workers in the longer term,” said Francine D. Blau, an economics professor at Cornell University who led the group that produced the 550-page report.

• Some immigrants who arrived in earlier generations, but were still in the same low-wage labor markets as foreigners just coming to the country, earned less and had more trouble finding jobs because of the competition with newer arrivals.

• Teenagers who did not finish high school also saw their hours of work reduced by immigrants, although not their ability to find jobs. Professor Blau said economists had found many reasons that young people who drop out of high school struggle to find work. “There is no indication immigration is the major factor,” she said.

• High-skilled immigrants, especially in technology and science, who have come in larger numbers in recent years, had a significant “positive impact” on Americans with skills, and also on working-class Americans. They spurred innovation, helping to create jobs.

“The prospects for long-run economic growth in the United States would be considerably dimmed without the contributions of high-skilled immigrants,” the report said. It did not focus on American technology workers, many of whom have been displaced from their jobs in recent years by immigrants on temporary visas.

Read more from The New York Times.

Perfection Foods Company, in North Philly, sued for exploiting workers

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From Al Día News:

by Liliana Frankel

Former employees of the gourmet hors d'oeuvres production plant Perfection Foods are suing the company, saying they were paid less than minimum wage for work weeks as long as 72 hours.

Many of the workers who’ve stepped forward so far are Central Americans. Though potentially hundreds of workers, including many contracted through temporary employment agencies, may be owed back wages, so far the plaintiffs are a relatively small group. Lawyers from Community Legal Services’ Employment division are hoping to be in touch with as many workers and ex-workers of the plant as possible before the end of September.

“The laws say that you deserve to be paid minimum wage and overtime no matter your immigration status,” said Nadia Hewka, one of the attorneys handling the case. “Even those who may have worked under a different name or an alias are still entitled to be paid for all of the hours that they worked and for overtime.”

How can people stay there? I don’t understand why people don’t demand their rights, why they don’t speak out. Sometimes I feel guilty, remembering that I didn’t say anything. But I didn’t know anything about this place, I didn’t know that they were exploiting us.

Scarlet (not her real name) is one of the plaintiffs in the case. She came to the United States from Honduras in 2013, and had to find work right away, as she was in debt from her journey and was also supporting her mother and daughter, who'd stayed behind in the countryside. A friend’s brother told her about Perfection Foods, and soon she was on her feet in the plant’s freezer room every day from 6 in the morning till at least 6 at night—and sometimes later.

“At 5 pm—supposedly—everyone had to leave, because the [Health and Safety] inspector was arriving,” she said. “So what they [the managers] did was tell us to go to the dressing area where we put on our work clothes and wait till he left.”

Once they’d seen the inspector’s car leave the lot, the employees emerged from bathrooms and dressing rooms, punched in again, and continued working until 6, 7, 8 at night. This overtime, though supposedly recorded through the punchcards, was never reflected in the quantity of cash she received at the week’s end: about $170. Even if Scarlet had only been paid for a 40-hour week, that salary is equal to $4.25 an hour, significantly less than minimum wage.

“Everyone complained, ‘Oh, I didn’t get anything, this money isn’t enough, what will I do with it?’” Scarlet recalled. As soon as she could find another job, she quit. “How can people stay there? I don’t understand why people don’t demand their rights, why they don’t speak out. Sometimes I feel guilty, remembering that I didn’t say anything. But I didn’t know anything about [this place], I didn’t know that they were exploiting us.”

In Pennsylvania, the minimum wage is $7.25 an hour, and overtime pay for hours worked beyond the 40-hour workweek should be at least 1.5 times that. But at Perfection Foods, not only were employees paid significantly less, sometimes their hours and deductions weren't accurately recorded. What’s more, Scarlet says that while working at the plant, she was forced to punch out on her timecard if she needed to eat lunch or use the bathroom.

Even if Scarlet had only been paid for a 40-hour week, that salary is equal to $4.25 an hour, significantly less than minimum wage.

Scarlet had never worked in an industrial setting before her job at Perfection Foods, “a very bad experience.” After she was finished at the plant, she never considered going back; in fact, the thought of it had her “biting her nails.” Instead, she found work cleaning houses, a job which pays nearly five times what she was making before.

It’s important, she said, “that your work be valued. My new boss never bothers me, never,” even though there’s always work to do.

When asked about the case, Bob Burke, an attorney representing Perfection Foods, responded that his client “denies [the plaintiff’s] allegations and will vigorously defend against the claims in court.”

Read more from Al Día News.

US Capitol workers want their voices heard over wage theft

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Tommy Wells/Flickr

From The Hill:

by Alba Morales

Last month, the U.S. Department of Labor announced that U.S. Senate federal contract workers like me had been robbed of over $1 million dollars from our paychecks by our employer, Compass Group.

DOL found that Compass had been paying us less than the legal rates for our jobs, had not being paying us proper overtime or even for all the hours we worked, and had not kept proper payroll records.

Within weeks, some of my co-workers started receiving as much as $20,000 in back-pay awards. But I only received $240, with no explanation of how it was calculated.

I’ve worked at the Senate for over a decade and I believe the company likely stole much more than a couple of hundred bucks from me.

And I’m not alone. Over a dozen Senate contract workers received little or no compensation as wage theft victims.

Worst of all, neither myself, nor any of these workers were contacted or interviewed by the Labor Department or the Architect of the Capitol, the agency that oversees the contract, as part of the investigation.

Since we did not have the opportunity to speak with investigators, DOL must have based its calculations of the back pay we are owed on information provided by the Compass. But how can this make sense when DOL also found that the company had been keeping false records?

The truth is that this is a symptom of a bigger problem: Workers and our representatives have not been invited to participate in the investigation and settlement talks even though we exposed the illegal conduct and are directly impacted by the results.

If this were a court case, the victims would have their say, but we are low-wage workers who can’t afford a private attorney.

That’s why workers are sending a letter to the Architect of the Capitol and the Department of Labor to request that our voices are respected.

For us, respect means a willingness to bring workers into the process.

We want to make sure every worker at the U.S. Senate is interviewed by Labor Department investigators and provided with an explanation of how their back-pay awards were calculated.

But even more importantly, we want to be represented during the negotiation of the final settlement. We believe that we can play a role in holding the company accountable to following the law.

Read more from The Hill

Union alleges Just Born employee posed as labor official, urged people to return to work

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Harry Fisher/The Morning Call

From The Morning Call:

by Anthony Salamone

The union representing about 400 workers at Just Born Quality Confections has filed a complaint with the National Labor Relations Board, alleging a nonunion employee posed as a union representative and urged striking members to return to their jobs.

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Local 6 filed an unfair labor practice charge, union organizer John J. Price said Friday. He said the union had received several complaints that an unidentified nonunion company employee was telling striking members "they could cross the [picket] line, that it's OK to go back to work."

While a company can notify its workers of any consequences regarding a strike, the union alleges that Just Born is misleading the workers by its action.

Harold Maier, assistant regional director with the National Labor Relations Board's Philadelphia office, said the agency will review the complaint, which was filed Thursday, but a decision on its validity could take up to 10 weeks.

Matt Pye, Just Born's vice president of corporate affairs, said the company had not seen the complaint as of Friday afternoon.

"We can't comment until we see the details," he said. "Our hope is that the NLRB will rule pretty quickly."

Workers have been striking since Sept. 7 outside Just Born's headquarters and plant at 1300 Stefko Blvd. after negotiations on wages, health insurance and pension broke down, according to the union.

The key sticking point is the pension, according to the company. The union says Just Born wants to eliminate its defined pension, while the company says it is willing to keep current workers in the pension while putting new workers in a 401(k) retirement plan. The pension has simply gotten too costly, the company says.

A brief synopsis of the union's complaint appears on the NLRB website, but Maier said the entire case was not available Friday because the agency needs to review it first for any possible redactions.

The complaint against the maker of marshmallow Peeps, Mike and Ike, and other candy specifies it is an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed" under Section 7 of the National Labor Relations Act. Those rights include forming and joining a union and collective bargaining.

Meanwhile, the company has kept up production by using nonunion workers and hiring what it calls permanent replacement workers. Just Born held a job fair Thursday that drew about 175 people and at least 600 people have applied for jobs online.

A recent ruling by the NLRB subjects employers to penalties, such as back-pay liability, if the union can show that hiring replacement workers was a punitive measure or intended to prevent future walkouts. That ruling is under appeal.

Read more from The Morning Call.

In building boom, immigrant workers face exploitation

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From The Boston Globe:

by Beth Healy and Megan Woolhouse

Luis Mayancela was 15 years old when he fell from the roof of a house in Portland, Maine, where he was helping fasten shingles. He tumbled two stories, severely breaking his leg.

His employer did not call an ambulance. Instead, a co-worker drove the Brockton High School freshman 75 miles in an old work van, across state lines, to a hospital in Massachusetts. As they crawled through rush-hour traffic, Mayancela had no idea his boss would try to dodge responsibility for the accident.

“I couldn’t breathe, much less talk,” recalled Mayancela, an Ecuadoran who took the job in 2013 to help support his family. “It’s pain you don’t forget.”

He is one of thousands of immigrants, many undocumented, helping meet the demand for workers in the region’s booming construction industry. They haul slabs of sheetrock and climb rooftops and dusty scaffolds, doing often dangerous work for contractors seeking cheap labor.

A Globe investigation found that these workers, eager for a paycheck, are often paid below the prevailing wage and illegally, in cash. They are also the most likely to be subjected to unsafe work conditions, without insurance to cover medical bills or lost pay if they get hurt. And the unscrupulous contractors who employ them are too seldom caught and penalized.

“This is not about catching a few bad actors that are dragging down the industry,’’ said Diego Low, director of the Metrowest Worker Center in Framingham, which helps workers fight for fair wages and safety. “We’ve evolved a system for providing subsidized labor to build our houses, and it’s based on the vulnerability of the workforce.”

Federal officials identified 910 “willful or repeat violations” that involved hospitalizations or deaths in the Massachusetts construction industry over the past three years, according to public records requested from the US Labor Department’s Occupational Safety and Health Administration. Of those, 98 percent took place on jobs run by nonunion contractors, OSHA said.

The real number of injuries is likely higher, advocates and government officials said, because undocumented workers on these job sites often are pressured not to report accidents.

Interviews with more than three dozen construction workers, legal advocates, and regulators, as well as construction site visits and the review of hundreds of pages of records, reveal industry practices that routinely exploit immigrant workers. They also point to companies that are repeat offenders, undercutting legitimate contractors who play by the rules.

Sometimes the victims are minors, or young men barely in their 20s.

Among the personal stories uncovered by the Globe:

 A 23-year-old roofer from Ecuador shattered his collarbone after falling from a 32-foot ladder in Waltham during Christmas week in 2014. His employer told him to drive himself home, even though he had been briefly knocked unconscious. It took five days for him to get medical care, and a year-and-a-half before receiving the surgery he needed to repair the break.

 A dozen immigrant workers repeatedly sought a combined $150,000 in back wages from a New Hampshire drywaller who, they said, threatened not to pay them if they quit. When they finally made plans to leave, he left a profanity-laced voicemail on the phone of one of the workers.

 A former Boston restaurateur-turned-contractor routinely failed to pay immigrant construction workers, even after they traveled to his home to complain and court judgments were entered against him.

“We know these workers are particularly susceptible to abuse,’’ Massachusetts Attorney General Maura Healey said in an interview. “They switch locations; they switch bosses regularly. By the time they complain to us, or we become aware of it, the bad actors may be long gone from the scene.”

Plenty of US citizens and documented workers get hurt in construction, too. But undocumented immigrants, deeply woven into the fabric of the economy in ways often overlooked by the public and political candidates, face additional struggles.

Many do not speak English and are unfamiliar with federal and state labor laws, which require employers to pay them at least minimum wage and carry workers’ compensation. These workers are often improperly characterized as independent contractors by employers who want to avoid paying their insurance and payroll taxes.

“There’s no contractual obligation between the employer and their workers,’’ said Marcy Goldstein-Gelb, longtime executive director of the Massachusetts Coalition for Occupational Safety and Health, who was recently promoted to run the national organization. “There’s no written agreement that if they speak up about health and safety, that they still have a job.”

When injured, these workers can get lost in medical limbo. If they tell doctors they were hurt on a work site but have no pay stubs or documentation to prove who their employer is, it can be next to impossible to get care, according to lawyers, advocates, and regulators.

That’s what happened to a 16-year-old Guatemalan youth, nicknamed Baby, on the work sites of a Lynn contractor. He plunged to the ground last fall from a ladder while lugging too much wood for his 118-pound frame.

His employer dropped him off at home that night instead of taking him to a doctor, according to the boy’s account to the Globe, his lawyer, and advocates. He was for months declined medical care because he had no legal guardian and no employer offering to pay his insurance, his lawyer said.

In another case, Isidoro Peralta, the Ecuadoran roofer, had to fight for medical care for a year-and-a-half after falling from a ladder in Waltham. While he waited, his collarbone healed improperly and he could no longer lift weight with his right arm. He was out of work, without pay, and in pain.

When Peralta talked to his employer at AN Construction, “Nothing happened,” he said.

Indeed, his boss, Angel Namina, denied to his insurer that Peralta was hurt on the job, according to Peralta’s workers’ compensation claim filed with the state.

The owner of the Milford construction outfit did not answer calls to his phone and could not be reached. He has failed to pay a fine for a prior serious violation with OSHA for failing to guard against fall hazards, according to public records.

Peralta’s lawyer fought the claim denial and reached an agreement with the insurer, so Peralta could have surgery. His doctor at Boston Medical Center said he had to cut apart his clavicle and repair it. Peralta said he was warned that if the doctor missed by a quarter-inch and sliced an artery, Peralta would be at risk of dying within a minute.

“I did it,’’ said Peralta through a translator, his youthful smile covering up many months of stress. “Thank God it came out OK.”

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AT LUXURY CONDOMINIUMS in Wellesley and modern apartment complexes in Chelsea, as well as building projects for colleges and major retailers, developers have been accused of looking the other way when subcontractors underpay workers and cut corners on safety.

Wage and safety violations have resulted in 1,300 complaints in the past three years just to the Massachusetts attorney general’s office. Some incidents have involved broken limbs, concussions, and wounds that went untreated for long periods because employers failed to provide the required insurance.

Many workers are urged not to say that injuries occur on a work site. Some fear losing their jobs if they complain, or worse, being exposed as undocumented, then deported.

Mayancela, who fell from the roof in Maine in the summer of 2013, was lucky in one way: He eventually received the care he needed, after being transported to Boston Children’s Hospital and later having a rod surgically placed in his femur.

Low, the Metrowest worker advocate, helped him navigate medical appointments. A Medford lawyer who specializes in such cases, Stacie Sobosik, cut through layers of subcontractors to find an employer in the chain whose insurance would pay for his coverage.


“It had nothing whatsoever to do with our company, although it dragged us through the mud for a while,’’ said King Weinstein, the Old Orchard Beach, Maine-based general contractor at the house where Mayancela fell. He said his firm ran its usual checks on the Massachusetts roofing subcontractor, Force Corp., and confirmed it had liability insurance and workers’ comp coverage at the time it was hired.

But those checks did not turn up problems at Force or with its general manager, Juliano Teles Fernandes.


Mayancela was receiving pay on the Portland job from Twin Pines Construction Inc., a company owned by Fernandes.

He and companies he has owned or managed have been cited for more than 100 violations since 2007, by federal safety regulators, including some that endangered workers’ lives, according to public records.

Over his career, Fernandes has racked up obligations and fines of $1.5 million with OSHA that have not been paid. The US attorney’s office in Boston is suing to collect those.

Fernandes and his Twin Pines firm were cited by the agency in May 2013 for serious and willful violations. That June, Fernandes let his workers’ comp policy lapse, according to public records. A month later, Mayancela fell from makeshift scaffolding in Maine.

Fernandes would claim to OSHA investigators that yet another subcontractor was the teen’s employer. But if there was such an assignment, it was informal and did not relieve Fernandes of his responsibility. The insurer for the other subcontractor — the same as Force’s — ultimately covered the claim. Force, which has had offices in Woburn, Clinton, and Lunenburg, was cited by OSHA in the Mayancela case for having a child under age 16 do hazardous construction work and for failing to keep proper date-of-birth records.

It’s illegal in Maine to hire anyone under age 18 for roofing. Yet the fine was modest: $15,350.

Meanwhile, even the serious injury of a 15-year-old and a string of fines didn’t move Force or Fernandes to change their ways. Last December, Force was sanctioned yet again, for exposing roofers to potentially fatal fall hazards, and for what OSHA called “unacceptable behavior that must change before a worker’s life or career is destroyed.’’

Fernandes could not be located at his listed addresses and declined to comment through a spokeswoman. This summer, federal authorities reached a settlement with Force to pay $2.4 million in back wages and damages to 478 workers for “willful” violations.

Force, in a statement at the time, said, “We take our commitment to our employees seriously and have cooperated fully with the DOL in its review, and are pleased to have resolved this issue in the best interest of our employees.”

Force also said, in response to Globe inquiries, that it is now requiring more safety training for workers and is “actively monitoring all job sites” for compliance. “We now better understand how critical it is to provide OSHA with feedback and contest findings in real time.”

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STACIE SOBOSIK, the Medford attorney who represents injured workers, said the most frustrating part of these cases is how general contractors persist, even after egregious workplace violations, in hiring abusive subcontractors.

“They don’t care. They’re going to keep using this company because they’re cheap labor,’’ Sobosik said. “There’s a reason that they’re so inexpensive compared to the market,’’ she said. “It doesn’t come free, that discount.”

Force recently landed a job working on a new 447-unit development at Somerville’s Assembly Row. The contractor that hired the company is Callahan Construction Managers, a Bridgewater company that has managed several of the largest residential projects in the Boston area in recent years.

Callahan, unlike Boston’s downtown commercial developers, often hires nonunion labor. The firm has been criticized by public officials in Quincy and Cambridge for allegedly failing to thoroughly vet its subcontractors.


The company’s president, Pat Callahan, said in a statement that when he hired Force, he was unaware of its issues with the Labor Department and OSHA.

“Since these matters came to light, Callahan has employed a stringent workforce monitoring process, and we are enforcing the right to inspect payroll records,’’ he said in the statement. “In the meantime, we are confident in the work Force Corp. is performing at Assembly Row.”

General contractors bid on multimillion-dollar jobs and divvy up the work to a thicket of smaller firms. It has proven notoriously difficult for authorities to police those subcontractors, according to regulators in Massachusetts, New Hampshire, and Connecticut.

“People, when they cheat the system, recognize big cost savings,” said Rudolph Ogden, an attorney for New Hampshire’s Department of Labor. He said the state is working to crack down on employers who break the law, but, “A lot of times we only hear when people stop getting paid. Or get hurt.”

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JUAN GONZALEZ, a 36-year-old from Mexico, worked for Yankee Drywall Corp. in Hudson, N.H., for nearly 15 years. His father, nephew, and cousin worked there too. He put up with the company’s difficult owners, he said, because the money was good. He started at $26 per hour and worked his way up to $33, and made enough to send some home to his mother.

“I love what I do,’’ Gonzalez said. “Create something. You can be proud.”

The company is owned by Gerald “Gerry” Crete, a gruff 59-year-old who runs the business with his wife, Martha Laramee, out of their home. They have a tidy yard and $50,000, his-and-hers, four-door Ford pickup trucks, black and white, in the driveway.

There would be weeks the workers were paid, followed by missed weeks, then promises of catching up. By late last year, Yankee allegedly owed more than $150,000 to a dozen workers, including Gonzalez and his family members.

“They used to tell us, ‘If you leave, I’m not going to give you the money. So you’ve got to show up for work tomorrow,’ ” said Iran Gonzalez, Juan’s cousin.

In late December, Juan Gonzalez received an angry voicemail from Crete, peppered with expletives, pleading with him and the other workers to return, and promising they would be paid. But the Gonzalez family had had enough: This time, they took their complaints to the authorities.

“You have to be a tough guy in this business,’’ Crete said during an interview in the couple’s kitchen in March. He called the industry “crooked,” and bitterly blamed missed payments to his crew on contractors who, he said, owed him money.

He said he owed the men no more than $5,000 each in back pay. But Juan Gonzalez said he alone is owed more than $20,000.

“I’m broke,’’ Crete said. He claimed to have filed for bankruptcy protection, but there were no such records in federal court in New Hampshire.

In April, Attorney General Healey’s office investigated and cited the company and Crete $26,000 for intentionally failing to pay employees and misclassifying them as independent contractors to avoid paying benefits and workers’ compensation.

Crete failed to respond to the AG’s demand for records, according to Healey spokeswoman Jillian Fennimore, and allegedly ignored multiple attempts to resolve the allegations.

New Hampshire’s labor department is pursuing Yankee for $171,000 in unpaid wages plus penalties. A hearing is set on the matter for October.

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EVEN WHEN AUTHORITIES do catch firms breaking the law, it can be cheaper for employers to pay fines than follow the rules. Some firms simply skip town and open under a new name.

Of the 1,300 complaints to the Massachusetts attorney general over the past three years, the office issued 455 citations against construction employers, sometimes multiple times, seeking restitution totaling $2.4 million and nearly $1 million in penalties, according to public records requests.

But companies often fail to pay even small sums. Healey’s office has collected just one-third of the $1.7 million in violations since January 2015, or $580,234. The bulk of the rest is under appeal or past due.

The AG’s office can’t readily say how much it collected prior to 2015, because the records were not computerized.

In Massachusetts, workers have to navigate a number of agencies to complain about employers who break the law. Neither the attorney general nor OSHA can easily shut down a company, even if it has multiple violations against it. The state Department of Industrial Accidents can issue stop-work orders when its investigators find companies not paying for workers’ compensation.

Governor Charlie Baker and Deval Patrick before him have heard the complaints of union executives that firms paying in the low $20s per hour or less, without overtime or insurance, are unfair competition. The residential union construction rate in Boston, including insurance and benefits, is $45 per hour, according to the New England Regional Council of Carpenters.

“This is wage theft,’’ said Manny Gines, an organizer for the union, who travels the Northeast helping workers and confronting companies that are breaking wage laws. “We really can’t compete with them if they’re not getting paid.”

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THE RECENTLY COMPLETED One North of Boston complex in Chelsea, a $110 million project with some 450 apartments, boasts luxury studios for $1,735 a month and two-bedrooms for $2,390. There are yoga and spin studios, an indoor basketball court, and doggie day care.

The general contractor was Callahan, the Bridgewater company. On one visit by the Globe, Universal Drywall of Auburn, N.H., had about 30 workers framing and building walls at the massive property; only a handful were marked as employees on sign-in sheets.

The rest were classified as subcontractors — the same practice the attorney general challenged when it sued Universal in 2014, alleging a “pattern of unfair competition” on the Chelsea job because it did not pay workers as employees. That case is ongoing, according to the AG’s office.

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