The AG’s Office first began investigating the company in 2013 over work it did in Chelsea
The Office of the Attorney General has filed suit against a New Hampshire drywall company and its owner for allegedly misclassifying employees as independent contractors. According to the complaint filed in Suffolk Superior Court last Thursday, Universal Drywall, LLC, and its owner Richard Pelletier, both of Auburn, NH violated the Massachusetts Consumer Protection Act and the Massachusetts False Claims Act in order to gain a “competitive advantage’ over the companies competitors in the Commonwealth.
“Employers are required to pay employees a lawful wage for each hour of work on construction projects, maintain accurate payroll records, and produce those records upon demand,” AG Coakley said. “We enforce these laws not only to protect workers, but to level the playing field for all businesses that play by the rules.”
In 2013, the Attorney General’s office began investigating the company after receiving reports that the company had been conducting irregular hiring practices at the residential construction project it was handling at the One North apartment complex in Chelsea. The company was hiring its workers from New Hampshire, misclassifying them as independent contractors in order to bring them into Massachusetts to work on the One North project in a clear violation of the Massachusetts Independent Contractor law.
Upon further investigation, the AG’s office determined that the company had engaged in this pattern of illegal hiring practice on a two other projects aside from the Chelsea one. They included the publicly-funded projects at the Tahanto Regional High School in Boylston which was completed in 2011 and the Douglas Intermediate School completed in 2012. Furthermore, the company created and submitted falsified records of its misclassified workers on both of these projects.
As a result of the investigation, the AG decided to file suit again Universal Drywall and its owner for engaging in a repeated pattern of unfair competition via the unlawful misclassification of the company’s workers on all three construction projects. The lawsuit further alleges that the company knowingly employed this practice in order to avoid additional hiring costs, thereby being able to underbid its competitors in Massachusetts in order to obtain these highly sought construction projects. By misclassifying it workers, Universal Drywall was able to underbid by requiring its workers to absorb the burden of the company’s overhead costs rather than company itself.
