Mass. AG Coakley Sues Drywall Company for Allegedly Misclassifying Workers

May 16, 2014

A New Hampshire drywall company and its owner have been sued for allegedly misclassifying employees as independent contractors, Massachusetts Attorney General Martha Coakley’s office announced today.

The lawsuit, filed Thursday in Suffolk Superior Court, alleges that Universal Drywall, LLC and its owner, Richard Pelletier of Auburn, N.H., violated the Massachusetts Consumer Protection Act and the Massachusetts False Claims Act to gain an unfair competitive advantage over companies in Massachusetts.

In 2013, the Fair Labor Division of the Attorney General’s office began an investigation into Universal’s hiring practices at a residential construction project in Chelsea, Mass., known as One North of Boston.

The investigation began after the Attorney General’s office received reports that the company had been hiring workers from New Hampshire and misclassifying them as independent contractors, in violation of the Massachusetts’ independent contractor law.

These reports mirrored previous claims reported to the Attorney General’s office regarding the company’s hiring practices on publicly-funded projects at the Tahanto Regional High School in Boylston, Mass., and the Douglas Intermediate School in Douglas, Mass., in 2011 and 2012.

These ongoing investigations, in conjunction with the Chelsea project, revealed a pattern of unfair competition through the unlawful misclassification of workers at all three projects, the Attorney General’s office said.

The lawsuit alleges that Universal used this practice to save costs associated with hiring the same workers as lawful employees. As a result, Universal was able to obtain contracts by underbidding its competitors by requiring the workers and not the company, to absorb the burden of an employer’s overhead costs, according to the allegation.

The lawsuit further alleges that Universal was responsible for creating and submitting false records relating to the misclassified workers employed on the Tahanto High School and Douglas Intermediate School projects, in violation of the Massachusetts False Claims Act.

The Attorney General’s office is responsible for enforcing the laws regulating the payment of wages and employee misclassification, in addition to laws protecting consumers and businesses from unfair competition.

Source: Massachusetts Attorney General’s office

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