A Long Island contractor, Looks Great Services, has agreed to pay $137,000 to 16 workers who were paid a fraction of what they should have earned under state law for clearing debris from Long Island Rail Road tracks after superstorm Sandy.
The workers were employed by Kansas-based Custom Tree Care, a subcontractor Looks Great hired as it received tens of millions of dollars in government contracts for cleanup work after the Oct. 29, 2012, storm.
The settlement negotiated between the state Department of Labor, Huntingon-based Looks Great and Custom Tree Care comes 15 months after four workers filed complaints indicating they were paid less than a quarter of what they should have earned under prevailing wage requirements set out in New York State labor law. Under the law, a prime contractor is responsible for wage payments by a subcontractor.
For Sean Cottrell, one of four men who filed claims for back wages with the state Labor Department, news of the settlement is bittersweet.
"It's taken far longer than it should have, but I'm pleased we finally got a settlement," he said Friday from Kansas.
Mark Reinharz, an attorney representing Looks Great and Custom Tree Care, noted there were no penalties issued by the department against either company.
"We're happy it's been resolved and we're ready to move on," he said. "My clients still believe this work was not state prevailing wage under the law, but to avoid the cost of litigation, and to end this matter, decided to settle."
The firms faced a potential finding of "willful violation" had the case gone to a hearing. Such a finding can lead to state exclusion from public works contracts.
No accounting for workers
The deal covers payments to each of the 16 men, ranging from about $18,000 to $8,000, though none of the workers who spoke to Newsday received an accounting of how the department arrived at their back pay amount.
"There would appear to be no way of knowing whether this is a successful outcome for the workers or not," said State Sen. Kemp Hannon (R-Garden City), one of two state senators calling for changes to both the law and the way the state enforces it.
"It took too long and the results are too uncertain," Hannon said of the department's investigation and the outcome for the workers. "There's an obvious need for a clearer system to be put in place in the future so you don't have a situation in which 10 towns can do five different things."
The state Labor Department refused to publicly discuss the settlement details or how 12 other workers became involved in the investigation.
A Newsday investigation last year found state labor law was routinely violated across Long Island in Sandy's aftermath, with some municipalities requiring state prevailing wage rates be paid for cleanup work, while others disregarded it.
Much of the murkiness exists, labor experts, prosecutors and local officials say, because the law, enacted in 1894, doesn't clearly spell out how it applies to storm cleanup.
In the Long Island Rail Road case, the railroad piggybacked on an August 2011 contract between Nassau County and Looks Great that did not stipulate prevailing wages, nor attach a wage schedule, county officials have said.
State labor law requires such steps when municipalities bid out certain public works contracts but does not provide a specific penalty when they fail to act. [Municipalities are required to also collect certified payrolls for public works construction contracts to help aid enforcement.]
The LIRR's decision to piggyback on the Nassau County contract came despite the railroad having an earlier business relationship with Looks Great that involved similar work but stipulated state prevailing wages were required. That 2010 "emergency/non-emergency tree removal program" was signed by Looks Great's president, Huntington-raised Kristian Agoglia.
Agoglia has said that he did not believe the Nassau County contract was subject to state prevailing wage law.
Looks Great was paid almost $61 million from January 2012 to the end of last month by Nassau, according to the county comptroller's office. About $60 million of that was for Sandy cleanup work, said Jostyn Hernandez, the comptroller's communications director.
The company earned millions more doing post-Sandy cleanup in the towns of Huntington and Hempstead, the villages of Garden City and Freeport, for the City of Long Beach and the U.S. Army Corps of Engineers, as well as for entities such as National Grid and the LIRR, records show.
In a statement, LIRR spokesman Sal Arena said, "We enforce prevailing wage requirements and we look forward to a resolution ensuring proper wages are paid in this case."
A spokesman for the MTA's Office of the Inspector General has said it is cooperating with district attorneys in Nassau and Suffolk in connection with an audit the office conducted of the Sandy cleanup contract.
It has declined to provide a copy of the audit, citing those investigations.
A separate federal investigation continues into claims that money is owed to scores of workers hired to work on another Sandy-related Looks Great contract -- with the Army Corps. The U.S. Department of Labor launched the investigation last year but declined to comment last week, citing the probe.
Looks Great investigation
In addition, the office of New York State Attorney General Eric Schneiderman has confirmed it is investigating Looks Great as part of an inquiry into how Sandy contracts were awarded and how the work was performed.
State Sen. Phil Boyle (R-Bay Shore) said he would continue to press for changes to state labor law to better aid prosecutions against unscrupulous contractors.
"We need this law to be completely unambiguous: Prevailing wages should apply in these post-storm circumstances. We need to guard against any contractor that works in New York State profiting on the backs of workers."