California Drywall Company Slapped with Wage & Hour Lawsuit – Again.

Riverside County, CAWest Coast Drywall & Co is doing it again: underpaying its piece-rate field employees and instructing them to underreport their hours. The California drywall company settled a lawsuit for the same allegations in 2017, but just two years after the settlement, the company repeated the same California labor law violations. According to this lawsuit filed by Attorney General Rob Bonta, since August 2019 the company has shorted about 7,000 workers by failing to pay wages owed, overtime, and more.

In 2016, the U.S. Department of Labor filed a lawsuit against West Coast Drywall & Company, its CEO and owner Mark D. Herbert, and its COO Santos Garcia, after the DOL’s investigation in 2012 discovered several labor law violations. That investigation determined that the company failed to pay overtime to drywall employees and painters, resulting in $9,115 in back wages due to 101 employees.

Back in 2012, the company agreed to comply with the Fair Labor Standards Act (FLSA), but it didn’t make the necessary changes, which resulted in another investigation and that led to legal action. The DOL filed the 2016 complaint in the U.S. District Court for the Central District of California, claiming West Coast Drywall violated, and continues to violate, overtime and recordkeeping provisions of the Fair Labor Standards Act. This time, the DOL requested a judgment ordering the employer to pay the overtime back wages due and an additional, equal amount of damages to the workers. The complaint also asked the court to enjoin the company and its officers from violating the FLSA in the future. These fines clearly cost the company more than if it compensated its employees properly and legally.

So, why would West Coast Drywall choose to repeat wage & hour violations, knowing the price it has to pay is greater than complying with California labor laws? Some attorneys say it’s the cost of doing business and never mind employee hardships. And now, February 2024, one of the largest drywall and painting subcontractors in Southern California (with about 1,500 employees and since 2019, it has employed no less than 7,000 employees in Southern California.) is slammed with the Attorney General’s lawsuit alleging that for years, West Coast has cheated its piece-rate construction employees.

Piece-rate Compensation System

A piece-rate system means that workers are paid for each piece they complete at an agreed-upon rate rather than an hourly wage. For example, depending on the industry they work in, piece-rate employees could be paid for every box of strawberries picked, yard of carpet laid, or shirt sewn. These systems are common in the construction industry but often abused by the employer, resulting in failure to fully compensate workers for all their hours worked. DOJ’s investigation into West Coast Drywall & Paint found that it did not provide legally mandated information to employees about the number of pieces that formed the basis of their pay, making it impossible for workers to accurately calculate the wages they were owed.

Employers who pay per piece still need to track how many hours employees work, the plaintiffs’ attorney said. According to court documents:

• West Coast compensates most of its field employees on a piece-rate basis.
• Under West Coast’s piece-rate compensation system, painters are paid a few cents for every square foot of drywall that they paint. Similarly, drywall tapers and hangers are paid a few cents for every square foot of drywall that they tape or hang, respectively.

These employees often work anywhere from fifty to fifty-five or more hours per week performing physically demanding work, and yet they are not paid the minimum and overtime wages they have earned and are entitled to. West Coast’s unlawful practices continue to this day, despite numerous private lawsuits accusing it of wage theft and a consent judgment it signed with the U.S. Department of Labor (DOL) in 2017 as part of a settlement agreement, wherein West Coast promised to stop this conduct and prevent further wage theft. West Coast’s entrenched, unlawful conduct shortchanges its employees and provides the company an unfair competitive advantage over law-abiding construction subcontractors.