Painting Company Sued for Failing to Pay More Than $2 Million to Employees
M&J Painting Allegedly Engaged in Unfair Competition on Public Projects and Violated State False Claims Act
BOSTON – An Ohio based painting company has been sued for failing to pay more than $2 million in wages to its employees in violation of the Massachusetts prevailing wage and overtime laws, and for engaging in unfair competition and violating the Massachusetts False Claims Act, Attorney General Martha Coakley announced today.
The lawsuit filed Tuesday in Suffolk Superior Court alleges that M&J Painting, Inc. (M&J) and its owner, Michael Kerpelis, intentionally failed to pay all wages due to employees and knowingly submitted false payroll records in support of its claims for payment on a public construction contract.
“We allege this company failed to pay its employees in accordance with the law, and obtained an unfair cost advantage over law-abiding competitors,” AG Coakley said. “The enforcement of these laws is essential in maintaining a level playing field for all businesses that play by the rules and protecting the rights of our workers.”
In November of 2008, M&J was selected from among six bidders to work on the Braga Bridge painting project, a $13 million public construction project in Fall River and Somerset, Massachusetts. In May of 2011, the AG’s Office received complaints alleging that M&J was not paying some of its employees for all of their hours on the project.
Through its investigation the AG’s Office determined that from March of 2010 through November of 2011, M&J knew how many hours its employees were working, but failed to pay dozens of its workers for all hours worked. As a result, the lawsuit alleges that M&J failed to pay employees more than $2 million in prevailing wages and overtime wages.
During the course of the project, M&J submitted certified payroll records weekly to the awarding authority, the Massachusetts Highway Department, asserting it was paying its employees the prevailing wage for all hours worked. The AG’s investigation determined that M&J knowingly underreported the hours worked by dozens of its employees on the certified payroll records to give the appearance that it was in compliance with the wage and hour laws. According to the lawsuit, by misrepresenting how workers would be compensated, M&J engaged in unfair competition in violation of Chapter 93A, the Unfair and Deceptive Trade Practices Act. M&J also knowingly submitted false certified payroll records to the awarding authority that grossly understated the total number of hours worked by M&J employees.
These false statements and false records related to payment violate the Massachusetts False Claims Act. Enacted in 2000, the False Claims Act authorizes the Attorney General to sue entities that submit false claims for payment to the state government or its political subdivisions on contracting and purchasing issues.
This matter will be handled by Fair Labor Division Chief Matthew Berge, Assistant Attorney General Drew Cahill, with investigative assistance from Fair Labor Investigators Mario Paiva and Jennifer Pak.