Vegas workers seek back pay from closed contractor

Grace Leong

Friday, Dec. 7, 2001 | 11:08 a.m.

Some 200 former workers of subcontractor Magnum Air are agitating for back pay and penalties to be imposed against the company, claiming they were laid off and weren't paid when it abruptly closed two days before Thanksgiving.

About 50 workers, who are seeking back pay since Nov. 12, tried to confront the company at 3430 W. Sunset Street on Tuesday to recover their wages but said they were locked out and their demands allegedly ignored.

Mayra Ocampo, a director of the Dolores Huerta Center for Worker Rights, a program of the Nevada Interfaith Council for Worker Justice, said the workers were to have been paid on Nov. 16.

They were told by the company to return on Nov. 19, but on that day were notified Magnum had closed after allegedly filing for bankruptcy, Ocampo said.

"There's a lot of mistrust towards the company. The workers don't know what to believe and why the company closed. There were no indications that the company was having financial problems," she said.

Robert Perez, a former Magnum foreman, said many workers were disappointed when they didn't get their checks.

"A lot of them were expecting to get that money to buy food for the Thanksgiving holiday. About 20 percent of 60 plumbers I know were laid off were undocumented immigrants. Not only do they not have a job, they can't even collect unemployment benefits."

"I was told by (a company executive) on Nov. 21 that Magnum Air was bought out by Executive Plumbing Inc., a Las Vegas company. But we were later told by Executive Plumbing that they didn't buy Magnum Air. They just wanted to buy some materials," Perez said.

An Executive Plumbing official denied claims that Magnum Air was purchased by the company.

An advertisement published Thursday by Las Vegas auctioneer Robert Deiro & Associates promoted a Dec. 13 auction of Magnum Air assets, calling it a "complete liquidation."

Kelley Armstrong, one of Magnum Air's co-owners, confirmed the company is closed and said it didn't file for bankruptcy.

He said the company is auctioning its assets in order to pay off its creditors and employees after negotiations for a buy-out by Executive Plumbing failed.

"We lost over a million dollars in our plumbing business because we were working under the market price. By the time we woke up to what was happening, we were insolvent. We approached Executive Plumbing about buying us out," he said, adding Magnum's assets are estimated to be worth about $4.2 million and its liabilities $5.2 million.

"Then Sept. 11 happened, and Executive Plumbing got afraid that the construction business will go bust. Executive wanted the vendors to reduce Magnum's debt substantially before it would go ahead with the deal. But talks with the vendors didn't work out," he said.

"Our attorney told us we didn't have to file bankruptcy after our bank killed our credit line and the merger talks failed. But he told us not to write paychecks unless we can pay federal taxes on it, because that's illegal. That's why we're liquidating the business and assets to make the payroll."

The equipment to be auctioned includes 30 vans and trucks, a few trailers, one fork lift, ladders, tools, computers, air-conditioning parts and other office equipment.

"We had to file a stolen property report with the police to recover our equipment. So far we're still short about $100,000 in plumbing tools, two trucks, $200,000 worth of leased radio equipment, 120 ladders, $40,000 worth of heavy equipment," he said. "Some of our employees, when they found out they were going to be terminated, stole four of our office computers and damaged our accounts receivable files."

Guy Deiro, the auctioneer's owner, said: "I don't know how much we're trying to raise here, it all depends on how much equipment we can recover from the employees."

Ocampo disputed Deiro and Armstrong's claims.

"I've told the employees to return the trucks and equipment. When some of them went back to the office two weeks ago for their checks, they had their trucks with them but had no one to turn the trucks over to. It's only in the last week that the owner tried to recover the property."

Ocampo said she is now working with the state Labor Commission to find out what legal recourse is available to the workers.

"If a worker is terminated, the employer, under Nevada labor law, is required to pay the worker that same day he's terminated. We're seeking unpaid wages and penalties for every day that the company fails to pay."

"Also, in Nevada, developers are responsible for defaults by subcontractors. We're trying to recover the damages from developers of various Northwest Las Vegas residential projects like Quail Run, Elkhorn and Day Springs, where Magnum workers have installed air conditioning and refrigeration for the houses," she said.