LV firm ordered to show records in kickback probe

Grace Leong

Wednesday, June 7, 2000 | 11:05 a.m.

Jetstream Construction Inc. of Las Vegas, facing a union's accusations that it required Hispanic workers to pay kickbacks for employment on high-wage Clark County School District projects, was ordered by a judge Monday to produce wage documents by June 13 for the Nevada Labor Commission's investigation.

The commission sought an order on May 10 to hold the Las Vegas contractor and its project manager John Dombrowski in contempt, claiming they tried to stall its investigation by refusing to comply with a state summons to attend a hearing April 24 and to produce the documents.

The state sought documents including time cards, payroll records, daily reports, original cancelled checks, general ledger, accounts payable lists, job cost reports and detailed general ledgers.

The state said it needed the documents to determine if Hispanic workers were required to pay $200 to $280 per week in kickbacks on public works projects in 1998 and early 1999 to Dombrowski and Jetstream President John Field, as alleged by a union; and if the contractor paid proper prevailing wages to its workers on those projects.

But Jetstream, in a June 2 motion opposing the order, said: "The summons requested by the Labor Commissioner is ... nothing more than an invitation to meet and discuss possible settlement."

"There is no legal requirement that an employer must attend this 'settlement conference' and there is no legal requirement that a employer must participate in these settlement negotiations."

But Clark County District Court Judge Michael Cherry on Monday rejected Jetstream's claims the commission has no legal authority to issue a summons to employers to adjust and settle wage claims and ruled that the claimants and Jetstream officials must meet on June 13 to review the required documents.

"If there is a problem with the production, this court will look at the documents in camera (in private)," to determine if these should be turned over to the Labor Commission, he said. Cherry also denied Jetstream's request to recover $10,000 in attorneys' fees from the offices of the Labor Commissioner and the Attorney General.

Orin Grossman, Jetstream's attorney, said the company will not make any further decisions including whether it will appeal until it has seen the judge's written order.

The state regulator is investigating numerous allegations against the company including those of "backing in hours," a process involving the recording of less hours worked for a rate higher than actually paid.

The Labor Commission, which said "paying less than the prevailing wage on a public works project is also improper," said penalties for such violations include the debarment of the contractor from being awarded a public works contract for two years for the first offense and three years for the second or subsequent offenses.

Nevada Carpenters Union officials say the Clark County School projects, designated as prevailing wage job sites, paid an average of $29 an hour. Prevailing wages are set annually by the commission and are wages that must be paid to workers on public works projects valued at more than $100,000.

The Labor Commission also said kickbacks are illegal and it's a misdemeanor to require an employee to rebate, refund or return any part of wages, salary or compensation.

But Jetstream denied the kickback allegations, saying it's being targeted by the Carpenters Union because it refuses to negotiate a union contract. Grossman maintains "kickbacks are allegations of criminal activity and the Labor Commission isn't a court of general jurisdiction. The commission has the right to file administrative complaints over issues of prevailing wages, but they have no jurisdiction to bring criminal charges against the employer."

Dianna Hegeduis, the Labor Commission's attorney, defended its position.

"First, the Labor Commission has to prove that there is a violation of labor laws and prevailing wage laws. Once this is proven, we can then request either the Attorney General or the District Attorney's office to file criminal charges against the employer."