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Thursday, April 21, 2011 03:31 pm

Non-union company wages labor war on three fronts

One lost cause, one battle continues and one begins


Durbin Enterprises is suing District 186 and the Illinois Department of Labor over a notice of first violation of Illinois’ prevailing wage laws.

A non-union contractor suing Springfield School District 186 for rejecting the company’s construction bid last month has filed a second lawsuit over a related matter – this time in Effingham County courts, solely against the Illinois Department of Labor and its recently dismissed director, Catherine Shannon. It’s the newest approach – one of three so far – Durbin Enterprises is taking to attack what it considers a huge flaw in Illinois’ labor compliance system, one under which it says it continues to suffer.

After receiving several complaints, IDOL found in April 2009 that the Beecher City-based geothermal well-digging company hadn’t paid prevailing wage to its employees on three different public works projects, all of them at public schools. Illinois’ prevailing wage act requires contractors hired for public works projects to pay employees the predominant wage offered in the project’s geographical area for similar work, as determined by the state. IDOL found that Durbin owed its employees more than $40,000 in back wages and issued the company a “notice of first violation” for the alleged discrepancy. Though the company paid the required amount, Dominique Durbin, whose family owns the business, says Durbin Enterprises shouldn’t have had to pay up – it already paid its employees the appropriate amount. He says the company tried to contest IDOL’s findings but was denied any such opportunity, as the state agency only allows due process after issuing a “notice of second violation.”

Durbin Enterprises hasn’t received a notice of second violation, though IDOL has since investigated more complaints, all of them determined to be unfounded. Though the first notice is considered a warning in IDOL’s eyes and the company hasn’t been allowed to present its case to IDOL, Durbin Geothermal has twice been rejected as the lowest bidder of public works projects after school districts – including District 186 for a geothermal project at Southeast High School – cited the company’s notice of first violation as a sign of inadequacy.

Dominique Durbin testified about the issue in front of an Illinois Senate labor committee on March 16, when legislators heard the merits of and opposition to Senate Bill 1389. The measure would have created a way for contractors to contest IDOL’s initial findings and would have fined anyone who knowingly filed false complaints, which IDOL is still obligated to investigate. While the legislation appears to be going nowhere, Durbin Enterprises is trying to use former IDOL director Catherine Shannon’s committee testimony to fortify its Effingham County case against her and IDOL.

Durbin is asking the court to declare his company’s notice of first violation void, force IDOL to provide the company with due process for any alleged violations against it and declare IDOL’s system flawed with “far reaching and unintended consequences for contractors and subcontractors.”

According to a transcript of the committee hearing filed with the court by Durbin’s attorneys, Shannon, appointed by former Gov. Rod Blagojevich in 2007, states that IDOL’s opposition to SB 1389 lies in the fact that allowing hearings for notices of first violations would require a significantly larger IDOL staff, which would require additional funding. She also states that in 2010, IDOL received more than 1,000 complaints, found wages due in 400 of those complaints and issued 113 notices of violation. Shannon also states that a notice of first violation is essentially a warning and “not intended to debar somebody, that’s why we have a second notice of violation. I agree that maybe something needs to be done about that because that’s not the intent.”

Durbin Enterprises, a geothermal well-digging company based in Beecher City, was rejected by Springfield School District 186 for a project because it allegedly failed to pay its employees prevailing wage until audited by the Illinois Department of Labor.

The transcript also details committee discussion among Shannon, Durbin and unnamed legislators concerning alleged harassment by “interested third parties” who file repeated unsuccessful complaints against contractors. Shannon states that the department has asked entities with a high frequency of unsuccessful complaint filings against the same contractors, which must be investigated by IDOL, to consider IDOL’s limited resources. She adds that the department rarely bans contractors from working on public projects: “I think we have been very responsible, and I think if you ask some of the unions, they probably wouldn’t like how responsible we have been. They wish we would maybe issue more notices of violations and more debarments, but we take it very seriously and we don’t do it in a frivolous or light manner.”

Gov. Pat Quinn announced on March 25 that Workers United’s secretary-treasurer Joe Costigan would replace Shannon as IDOL director.

Steve Zahn lobbies for the International Union of Operating Engineers Local 965, which wrote a letter to District 186 citing Durbin’s alleged violation and requesting that the district reject the company. He says the organization opposes SB 1389 because it would limit the number of days in which complaints could be filed. He says the suggested fine against those who file false complaints would be “a slap on the wrist” and that there’s no good reason for anyone to issue false complaints. “We have no incentive to flood the system,” Zahn says. “I think if anybody is knowingly filing false complaints then they don’t understand the backlog at the Illinois Department of Labor.”

Phone messages left last week for an IDOL spokesperson were not immediately returned, nor was a message left at Shannon’s home. IDOL, which has 30 days to respond to the Effingham County lawsuit, has not yet filed a response there.

Meanwhile, Durbin has lost his initial battle with District 186 for work on a Southeast High School geothermal project. A Sangamon County judge on March 21 denied a request for a temporary restraining order that would have required Tri-County Irrigation, the company that won the project with a $763,000 bid, $125,000 more than Durbin’s bid, to cease its work at the site. Already, the winning company has spent upwards of $20,000 on the project and District 186 argued that delaying the work could increase costs to taxpayers and keep the school from opening in the fall. Another hearing regarding the constitutionality of District 186’s bid conditions and IDOL’s notice of first violation system is scheduled for April 27.

IDOL, through the Illinois Attorney General’s office, on April 14 filed a motion to dismiss the Sangamon County case, stating that Durbin Enterprises did in fact admit to violating Illinois’ prevailing wage act and that if it disagreed with IDOL’s findings it should not have paid the $40,000 in back wages, but waited for IDOL to sue the company for it in circuit court, where the company could have offered a defense. The filing also says that the company can’t show that the notice of first violation creates a “blacklist” situation for Durbin Enterprises, as it is not “virtually impossible” for the company to find work after a notice of first violation.

Rob Cross, attorney for District 186, says the time for Durbin to object to bid conditions would have been before the bids were opened. “You can’t wait until you don’t win,” Cross says, adding that Durbin Enterprises should have taken its complaint with IDOL and its lack of due process to the circuit court when it first received its notice of first violation.

Contact Rachel Wells at rwells@illinoistimes.com

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