CITY ATTORNEY FEUER FILES LAWSUIT AGAINST CONTRACTOR FOR ALLEGED WAGE THEFT ON CITY PROJECT

LOS ANGELES – City Attorney Mike Feuer today announced that his office has filed a lawsuit against building contractor Mackone Development Inc. and five of its subcontractors for allegedly failing to properly pay individual workers hundreds of thousands of dollars in proper wages and overtime for the multi-million dollar South Los Angeles Animal Care Center.


"Stealing wages from hard-working men and women is reprehensible and it must end," said City Attorney Mike Feuer. "No one--especially city contractors paid with taxpayer dollars--should fail to pay workers what they are rightly owed."


The City Attorney filed a lawsuit against Mackone Development Inc., the primary contractor as well as subcontractors Pak’s Cabinet, Lectrfy, Southern California Steel, KCC General Construction, King Wire Partitions, Inc, Nader Construction, and their operators.


The City Attorney’s complaints states: “The Defendants named in this complaint are, individually and collectively, liable for stealing wages from the workers they employed and promised to pay for their work on this City project, and for covering up of this theft. The impact on the workers was significant; not only were they and their families severely damaged financially, but many were subject to overt harassment and intimidation as part of the Defendants’ efforts to conceal their illegal schemes. Compounding the Defendants’ wrongdoing, is the fact that the project involved here was a City public works project, paid for entirely by the City, which rightfully expects that public funds will be spent in a legal manner, and that the employees hired to work on City projects will be compensated fairly and legally.”


The City is seeking restitution to all employees; a permanent injunction prohibiting each of the defendants from participating in any contract with the City; and civil penalties up to $2,500 per violation.


In 2009, Mackone Development was awarded a $9.5 million bid on the construction of the 68,000 square foot South Los Angeles Animal Care Center facility. Construction took place from 2010-2013 during which, Mackone was responsible to ensure all subcontractors comply with prevailing wage law. The lawsuit alleges Mackone allowed, and in some cases encouraged, subcontractors to not pay workers what they were rightly owed.


As part of a multi-pronged approach to combat wage theft, Feuer unveiled a wage theft hotline to report incidents to his office at (213) 978-7141. The City Attorney is also working with the State Labor Commissioner on future cases of wage theft for prosecution by office.


Some allegations in the lawsuit include:


  • Mackone Development Inc. - Allegedly had employees work on Saturdays, did not pay employees the prevailing wage for those hours, and failed to report any of those hours on certified documents submitted to the City, as required by law.

  • Pak’s Cabinet - Allegedly paid workers as low as $8 per hour, far below the prevailing wage of $49 per hour as set by State law. The company did not pay time and a half for overtime worked. Reports to the City were falsified to indicate that workers worked no more than 8 hours when they often worked 12 or more per day. Employees were also coerced into lying to inspectors and paid to sign false declarations.

  • Lectrfy, Inc. – Allegedly paid below the State prevailing wage and did not pay most overtime hours. Lectrfy went so far as to change the hours entered into the time card system to delete overtime hours worked, thus paying workers for fewer hours than they worked. It is also alleged that the company withheld contributions for benefits from workers’ pay such as retirement, but did not put those payments into any employee pension fund.

  • Southern California Steel, Inc. – Allegedly underreported hours to state and local regulatory agencies. In doing so, it is alleged that Southern California Steel underpaid fees to worker’s compensation insurance and Unemployment Insurance funds.

  • KCC General Construction – Allegedly failed to pay the prevailing wage to employees on the project and failed to pay overtime to some employees. At least 31 employees were paid well below the $45 per hour prevailing wage including some employees who were paid lump cash sums equaling $5 per hour for an eight hour work day, wages below even California minimum wage.

  • King Wire Partitions, Inc., and Nader Construction – Allegedly failed to pay fringe benefits and training fees on a portion of worker salaries. Employees were also misclassified under prevailing wage rate, causing them to receive less than due.


The lawsuit is being handled by Assistant City Attorney Tina Hess, Deputy City Attorney Jessica Brown, Deputy City Attorney Jeremy Berzon and Deputy City Attorney Colleen Courtney. The investigation was performed by the City of Los Angeles Office of Contract Compliance, which is a division of City of Los Angeles Department of Public Works.

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The Office of Mike Feuer

Los Angeles City Attorney

James K. Hahn City Hall East, Suite 800

Los Angeles, CA 90012 | 213-978-8100