Joseph, Greenwald & Laake, P.A. is pleased to announce that it has helped to secure a $400,000 settlement with the U.S. government and a $72,000 finder’s fee for its client, a whistleblower relator, from a False Claims Act case involving prevailing wages for construction workers in Reston, Va.
The firm’s client, an organizer, will receive the finder’s fee as a share of the settlement agreement proceeds for filing a qui tam action in federal court.
The relator alleged that Frederick, Md.-based Cindell Construction Company, a subcontractor hired by Florida-based Lend Lease (US) Construction, Inc., failed to properly supervise lower-level contractors with respect to the payment of prevailing wages to workers who were underpaid while installing drywall at Patriots Park, an office complex housing U.S. intelligence agencies, between September 2011 and June 2013. The project was subject to Davis-Bacon Act and Contract Work Hours and Safety Standards Act requirements because the purpose of the construction work was to make the property compliant with General Services Administration and Department of Defense security regulations and requirements.
The workers who allegedly were denied prevailing wages also were later paid back wages as a result of the complaint and subsequent investigation, according to Brian J. Markovitz, a partner with Joseph, Greenwald & Lake and the attorney for the relator.
“Our client and importantly the workers on this project are very pleased with this outcome,” Markovitz said. “The workers received monies owed to them, the government was paid relative to its civil claims against the construction companies, and our client was appropriately rewarded for coming forward with the qui tam action.”
The agreement also requires Cindell to pay the relator’s expenses and attorney’s fees and costs.
Markovitz stressed that the successful outcome in this case demonstrates the value of the False Claims Act as a tool for unions, individual union members and others to initiate a civil lawsuit to report to the Justice Department any contractor who fraudulently obtained government money.
Markovitz pointed out that other approaches to addressing prevailing wage theft – typically public protest campaigns or complaints with the Department of Labor – often are unsuccessful.
“When a contractor lies to obtain public funds by stating to government officials that it paid workers proper prevailing wages, they violate the False Claims Act,” Markovitz said. “Using the False Claims Act is a good means to try to get workers properly paid, but also a vehicle for unions and others to obtain additional funds by collecting the finder’s fee.”
Markovitz explained that the False Claims Act allows for triple damages plus penalties of $5,500 to $11,000 for each false submission to the government, plus a finder’s fee usually of at least 15 percent and up to 25 percent of the money recovered.
He added that reputable construction companies that have honest business practices also suffer at the hands of the unscrupulous who low-bid them on contracts, and honest companies should come forward and report prevailing wage violations by dishonest competitors through the False Claims Act process.
“The companies that typically violate wage laws usually bid low and win projects from the companies that play by the rules and suffer from others’ dishonest practices,” Markovitz said.