Las Vegas company ordered to pay $3.6M over pay practices
Las Vegas-based Unforgettable Coatings Inc. was ordered by a federal court to pay an estimated $3.6 million for unfair pay practices, but the company denies wrongdoing.
Las Vegas-based Unforgettable Coatings Inc., a painting firm whose work has included portions of Allegiant Stadium, was ordered by a federal court last month to pay an estimated $3.69 million in fines over its pay practices.
The company, which uses non-union labor, was accused of violating the Fair Labor Standards Act by the Department of Labor for falsifying pay records to prevent workers from collecting proper overtime payments, falsifying payroll records to omit some workers, and requiring some workers to volunteer their time on weekends to work without pay, according to a DOL press release.
The decision by U.S. District Court Judge Kent Dawson was issued as a result of a five-month investigation by the DOL into Unforgettable Coatings, with the first complaint filed in March 2020.
In addition to Nevada, the paint and specialty coatings company headed by Cory Summerhays operates in Arizona, Idaho and Utah.
The DOL said its probe, which included the cooperation of the local district of the International Union of Painters and Allied Trades and Arriba Las Vegas Workers Center, covered violations from September 2016 to December 2020 and impacted 593 employees. Unforgettable Coatings was ordered to pay $1.81 million in unpaid overtime compensation and an additional $1.81 million to compensate the employees, who weren’t paid in a timely manner, as well as other fees totaling about $68,100.
“The wage theft committed by Cory Summerhays and Unforgettable Coatings Inc. was egregious and willful,” DOL Principal Deputy Wage and Hour Administrator Jessica Looman said in a statement. “The employer denied nearly 600 workers in four states their hard-earned overtime pay, attempted to hide their greed and illegal actions, and retaliated against workers who asked why they were being cheated.”
Unforgettable Coatings said it accepted the settlement offer without an admission of guilt or wrongdoing. Summerhays said in a statement that the company was willing to go through litigation before the DOL put this offer on the table.
“The day the DOL conceded to walk away with no conclusions of guilt we optimistically set plans to move on,” Summerhays said.
He said Unforgettable Coatings’ use of non-union labor may have contributed to the DOL investigation.
“One of the lessons learned through this process is that we cannot assume an objective assessment of a business will always occur; rather, government agencies at times may rely on the agenda of labor unions in their attempt to take down non-union businesses. Many small businesses cannot survive such a tandem agenda. But we did not falter and nor will we; UCI is here to stay. We’re just happy to have this long ordeal behind us,” Summerhays said.
Former employees of Unforgettable Coatings celebrated the ruling, in statements issued by Arriba, a grassroots organization that protects the rights of low-wage and migrant workers.
“It’s an overwhelming moment that brings tears to your eyes,” Isaac Umana, a former employee, said in a statement issued through Arriba. “Today we proved that the workers, united, will never be defeated. Cory Summerhays was an abusive employer who always said that he had the best lawyers, but I knew justice was on our side. It’s a major victory.”
Other DOL allegations against Unforgettable Coatings include the company reducing all wages for workers by 30 percent as well as cutting hours and intimidating workers if they were believed to be cooperating with the department’s investigation.
It’s not the first time the paint company has been ordered to pay money over its pay practices. The DOL said in a news release that it recovered $47,393 for 21 Utah workers over overtime wages, after a 2013 investigation.
“A reasonable employer might try to avoid repeating a bad and costly decision,” the DOL stated. “Cory Summerhays … chose instead to double down, and then some.”
Summerhays denied that the company has tried to take advantage of its employees, saying the allegations are “antithetical” to the company’s values.
A former employee contradicted Summerhays’ statement in a note issued through Arriba.
“When I spoke out about underpayment and working conditions at Unforgettable Coatings, Inc., I was treated like a traitor and faced ongoing consequences for my whistleblowing,” said former employee Jonas Reyes. “The employer retaliated against me, and used my immigration status to try to silence not only me but other co-workers as well. But I decided that I couldn’t accept that treatment for myself or others. We fought and we won.”
As a result of the order, Unforgettable Coatings is also required to show payroll and employee time records to the DOL for the next three years upon request as well as inform employees both in English and Spanish of DOL regulations on overtime pay and workers’ rights.
Summerhays was optimistic that the company will continue its operations, despite the fines and admonishment from the DOL.
“It’s a lot of money,” he said. “This is a case, however, involving six companies in several states. We continue to have no debt; all will be well. We still provide the best quality service we can and at affordable prices for our clients. We deeply appreciate our customers who supported us despite the polarizing untruths in certain media. Nothing will deter us from our commitment to serve our employees well, knowing they will in turn serve our customers well.”
Contact Sean Hemmersmeier at email@example.com. Follow @seanhemmers34 on Twitter.