State sues contractor in kickback probe

Grace Leong

Tuesday, May 16, 2000 | 10:51 a.m.

The Nevada Labor Commission is seeking a court order to hold a Las Vegas contractor in contempt, claiming it's blocking the commission's attempts to enforce labor laws.

In a Clark County District Court suit last week, the Labor Commission said Jetstream Construction and its project manager John Dombrowski -- accused by a local union of demanding that Hispanic workers pay kickbacks for employment on high-wage Clark County School District projects in 1998 and early 1999 -- failed to comply with a state summons to attend a hearing on April 24 on the matter and to produce company documents on those projects.

The suit also asks the court to impose a $500 fine or imprisonment of up to 25 days or both if it finds Dombrowski guilty of the contempt charges.

Dianna Hegeduis, the Labor Commission's attorney, said Clark County District Judge Stephen Huffaker ordered the defendants Monday to appear for a hearing on June 5 to explain why they failed to produce the required documents.

Jetstream has denied the kickback allegations and says it's being targeted by the Nevada Carpenters Union because it refuses to negotiate a union contract.

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

The Carpenters Union, which alleged Hispanic workers were ordered to pay $200 to $280 per week in kickbacks to Dombrowski and Jetstream President John Field, said earlier this month an audio tape made by a former Jetstream worker, Manuel Gomez, proves the subcontractor required several Hispanic workers to pay kickbacks from their paychecks.

The union said Gomez made a tape of a conversation he had on July 31, 1998, with Field, who during the discussion, allegedly asked for a kickback.

The Labor Commission said kickbacks are illegal and any person found "requiring his employee to rebate, refund or return any part of the wage, salary or compensation paid ... shall be guilty of a misdemeanor."

But Arnold Weinstock, a Jetstream attorney, disputed the allegations in the state lawsuit.

"The allegations weren't charged by the appropriate authorities. If this is considered a misdemeanor, which suggests this is a criminal violation and therefore not a labor issue, then it should be handled by the Attorney General's office and not the Labor Commissioner."

He said the Labor Commission failed to respond to Jetstream's request on April 21 for proof of the "legal basis for (its) authority to issue a summons."

The Labor Commission, however, disputed Jetstream's arguments, saying that in matters relating to wages, the labor commissioner is empowered by state labor laws to summon employers to settle wage or commissions claims, "conduct administrative hearings, assess fines and report violations."

The state regulator said that although no administrative complaint to date has been filed against Jetstream, it is investigating numerous allegations against the company including those of "backing in hours," a process that involves the recording of less hours worked for a rate higher than actually paid.

"For example, the workers work 8 hours at $12.50 per hour, but the records only indicate 4 hours worked at $25 per hour, which rate would be the prevailing wage established for that class of worker on a public works project," the suit said.

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."

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 once a year by the Nevada Labor Commissioner, and are wages that must be paid to workers on public works projects with a contract value of over $100,000.

Grace Leong

is a business writer for the Sun. She can be reached at (702) 259-2326 or gracel@lasvegassun.com