Painting Company Pays More Than $2 Million for Failing to Pay Employees on Fall River Work Project
M&J Painting Settles Claims of Unfair Business Practices on a Public Project
BOSTON – An Ohio based painting company has paid more than $2 million in restitution to settle claims that it violated Massachusetts prevailing wage and overtime laws, and engaged in unfair business practices and violated the Massachusetts False Claims Act, Attorney General Martha Coakley announced today.
“This company failed to properly pay its employees and obtained an unfair advantage over its competitors,” AG Coakley said. “Enforcing these laws is essential to maintain a level playing field for all businesses that play by the rules, and to protect the rights of our workers.”
The settlement resolves a lawsuit filed in May 2013 in Suffolk Superior Court, alleging that M&J Painting, Inc. (M&J) and its owner, Michael Kerpelis, intentionally failed to pay all wages to employees and knowingly submitted false payroll records in support of its claims for payment on a public construction contract.
The settlement provides more than $2 million in restitution to workers on the Braga Bridge painting project in Fall River. The settlement also resolves M&J’s claim that MassDOT was withholding money on a separate contract.
According to the agreement, MassDOT will release $2.065 million of the money it is holding to the Attorney General’s Office for distribution to workers, and will release the remainder to M&J to settle the contract claims.
In November 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. In May 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 Attorney General’s Office determined that from March 2010 to November 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, M&J failed to pay employees more than $2 million in prevailing wages and overtime wages.
The AG’s lawsuit alleged that during the course of the project M&J submitted certified payroll records weekly 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 to give the appearance that it was in compliance with the wage and hour laws. The lawsuit alleged further that by misrepresenting how workers would be compensated, M&J engaged in a deceptive and unfair trade practice which violated the Commonwealth’s Consumer Protection Act. M&J was also alleged to have knowingly submitted false certified payroll records to the awarding authority that grossly understated the total number of hours worked by M&J employees, in violation of the Massachusetts False Claims Act.
Passed 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 was handled by Fair Labor Division Chief Matthew Berge, Deputy Chief Amy Goyer, Assistant Attorney General Drew Cahill, and Assistant Attorney General Jason Barshak of the Trial Division with investigative assistance from Fair Labor Investigators Mario Paiva and Jennifer Pak.