IR #99-05
Thursday, April 29, 1999

Dean Fryer
Richard Stephens
(415) 703-5050

Federal Indictment Supported By State Labor Commissioner

SAN FRANCISCO -- Newly appointed State Labor Commissioner Marcy Saunders today applauded action by the U.S Attorney's Office and announced that she has already begun taking steps to thoroughly examine the issues surrounding the indictment of a former employee of the Division of Labor Standards Enforcement (DLSE).

"We are determined to implement a higher level of accountability by changing the reporting, monitoring and auditing procedures of all of our field investigators to ensure that investigatory practices are in place that will prevent illegal activity from occurring in the future," said Saunders.

In September 1997, Howard Hernandez, a deputy labor commissioner assigned to DLSE's Targeted Industries Partnership Program (TIPP), was arrested for allegedly taking kickbacks from garment contractors in exchange for reduced enforcement action against those employers. The Division immediately placed Mr. Hernandez on administrative leave and began an internal investigation of the matter in concert with outside state authorities. During the investigation, Mr. Hernandez resigned his position and waived any reinstatement rights.

"Now that the U.S. Attorney's Office has indicted Mr. Hernandez, we are implementing steps to ensure the integrity of this program, which protects both workers and honest employers in the garment, agricultural and restaurant industries," said the State Labor Commissioner. "When a state employee entrusted with enforcing these important workplace laws and regulations violates that trust, strong sanctions must be taken. We must also make sure procedures are in place to ensure that this never happens again."

"Both the new Director of Industrial Relations and I are outraged that a program designed to protect workers and honest employers has been subverted by a dishonest employee," said Saunders. We will not tolerate any questionable or illegal activity by any of the investigative staff who enforce state labor laws, and will aggressively seek prosecution of those who engage in any such activity."

"We will continue to fully cooperate with the state Department of Justice, the U.S. Attorney and the federal grand jury investigating this incident," said Saunders. "We have cooperated fully to date and refrained from taking any action that would interfere with those investigations."

Today DIR Director Stephen Smith again assured the U.S. Attorney that he is pledging full cooperation in the investigation and prosecution of this case.

# # #