IR #2011-22
November 3, 2011

Dean Fryer
Erika Monterroza
(510) 286-1161


California Labor Commissioner reaches $726,063 settlement with 84 Lumber Company

Davis, CA — California State Labor Commissioner Julie Su reached a substantial settlement to resolve a civil wage and penalty assessment against a prominent subcontractor at the Tercero Housing Project at the University of California, Davis. The subcontractor 84 Lumber Company has agreed to pay $726,063.24 in back wages and penalties for failure to pay prevailing wages and related labor violations.

The settlement reached between the California Department of Industrial Relations’ (DIR) Division of Labor Standards Enforcement (Labor Commissioner) and 84 Lumber will also resolve the wages and penalties levied against another subcontractor, Russell/Thompson, and general contractor Brown Construction, Inc. The agreement includes a total of $564,938.24 for the outstanding wages and $161,125 for related penalties.

“This public works project represents a considerable investment of public funds, and contractors on these projects must be held accountable,” said DIR Acting Director Christine Baker.  “Public works requirements are designed to ensure that public money is spent properly. We will continue to scrutinize projects so that law abiding employers have an even competitive playing field and workers are paid what they are owed.”

“This settlement will make available wages that should have been rightfully paid to workers,” said Labor Commissioner Julie Su. “It also sends a strong message that on public works projects, prime contractors will be held responsible when their sub-contractors fail to follow labor laws.”

84 Lumber Company is one of four subcontractors fined by the State Labor Commissioner in 2010 for wage violations uncovered at the Tercero Housing Project. Brown Construction had contracted with 84 Lumber Company to perform framing work for the student residence complex. 84 Lumber Company in turn hired Russell/Thompson Inc., a corporation based in Redding, California, to perform the actual work.

An investigation launched by the Labor Commissioner in 2009 uncovered evidence which established that Russell/Thompson willfully violated the law by failing to pay proper prevailing wages on the public works project. Russell/Thompson failed to pay overtime and misclassified workers by identifying them as lower paying positions rather than higher rate skilled positions that were worked. It also established that Russell/Thompson falsified payroll records, affecting a total of 74 employees.

On June 9, 2010 the Labor Commissioner had ordered Russell/Thompson to pay $1.3 million in wages and $200,000 in fines as a result of the investigation. The Labor Commissioner further served a civil wage and penalty assessment against Brown Construction and 84 Lumber as prime contractors in the matter. Two months later, on August 19, 2010, the Commissioner ordered two more subcontractors, Nevada-based Kings Drywall and JL Home Development, to pay more than $1.3 million for failing to properly pay 149 workers. Brown Construction later provided documentation that additional wages had been paid, and the Labor Commissioner made adjustments to the penalties.

The other subcontractors fined by the Labor Commissioner for Tercero project violations have hearings scheduled in November and December.

84 Lumber is a building materials supplier with corporate headquarters in Eighty Four, Pa. and operates stores and plants in 35 states. The company is licensed with the California Contractors State Licensing Board to work in the state.

The California Department of Industrial Relations (DIR) Division of Labor Standards Enforcement adjudicates wage claims, investigates discrimination and public works complaints and enforces state labor law. To learn more about the Division of Labor Standards Enforcement, visit Employees with work-related questions or complaints may call the California Workers’ Information Hotline at (866) 924-9757.

# # #