A Las Vegas construction company that a state agency found underpaid workers on a bollards installation project on the Strip has been barred from public works contracts for three years.
Muller Construction must also provide more than $92,000 in back pay and $130,000 in penalties for failure to pay prevailing wage to 28 workers who were fabricating bollards in the company’s parking lot, according to a letter from the Nevada’s Office of the Labor Commissioner.
The decision, announced Thursday, contrasts with an audit performed by Clark County in early 2018 that concluded Muller Construction underpaid 14 workers by nearly $3,300, but overpaid 14 by close to $5,500.
In their findings, however, state auditors determined one worker for Muller Construction was owed more than $19,000, according to a copy of the audit obtained by the Review-Journal.
State auditors began the investigation into Muller Construction about a year ago after the Nevada Foundation for Fair Contracting, a nonprofit labor management watchdog that accused the company of underpaying workers, first lodged a complaint with the county. The foundation then argued the county’s subsequent audit into the matter had not been thorough enough.
Robert Kern, a lawyer representing the company, said he would appeal the labor commissioner’s decision, arguing that the agency’s conclusions were improper on at least two fronts. The commissioner didn’t hold a hearing to consider evidence over the disputed assertion that the company’s parking lot acted as a public works site — Kern said it didn’t — and the office missed a deadline for issuing a decision to overrule the county.
“It strikes me as irresponsible and unprofessional and I don’t know why they’re going this way,” Kern said. “This could very well destroy a company completely if it stands, and that’s not something you should do lightly, and certainly not something you should do without evidence.”
An email to the Office of the Labor Commissioner was not immediately returned Friday.
Muller Construction had been awarded a $5 million deal in June 2017 by the county commission to install hundreds of bollards along the Strip. Bollards are four-foot steel posts rooted into sidewalks to protect pedestrians from vehicles. They are anchored 15 to 18 inches beneath the ground by interconnected, steel frames. They are strong enough to stop a flatbed truck traveling 55 mph, county officials say.
Six months after the contract was awarded, the non-profit fair contracting foundation – a group whose officers are also leaders with a local laborers union – claimed workers were misclassified and not being paid for the construction trades they were performing, which would violate the state’s prevailing wage law.
In response, the county examined the company’s project payrolls and found that some workers were underpaid and others were overpaid. At the time, Kern pointed to an accidental misinterpretation of state administrative code to explain the error.
Muller Construction had completed 10 other county public works projects since 2015 without a prevailing wage violation, county spokeswoman Stacey Welling said.
Still, the county opted to re-bid the project and, in June, awarded Unicon LLC nearly $4 million to install about 600 more bollards. About 1,600 bollards in total have been installed on the Strip by the two contractors, county spokesman Erik Pappa said Friday.
No ulterior motives claimed
Tommy White, chairman of the Nevada Foundation for Fair Contracting and also an official with the Laborers Local 872 union, said he believed the union has a contract with Unicon LLC. It did not with Muller Construction, though he denied those relationships motivated the foundation’s complaints.
“We believe what it does is, it keeps contractors honest,” White said about the labor commissioner’s decision. “It’s not about going after non-union contractors or union contractors; it’s about contractors using taxpayer dollars to do work in our county (and) keeping them honest.”
Muller Construction, however, has accused the union of defamation in state court, saying the allegations about underpaid workers was an effort to stir negativity about the company in the eyes of the public.
The lawsuit remains unresolved and on April 1, the company filed a demand for a jury trial, court records show.
Kern acknowledged Friday, however, that the labor commissioner’s ruling “will be devastating to our case.”