NWJP wins important court decision implementing new law in construction

A chronic problem in the construction industry in Oregon has been the use of “labor contractors” to recruit workers for tasks like roofing, framing, drywall and painting. These recruited workers are typically misclassified as employees of the labor recruiter, not the construction contractor. This allows the construction contractor to avoid liability for paying the wages of those workers who make their project possible. The labor recruiter often doesn’t have enough money to pay wages, and historically, it was extremely difficult to collect from the construction contractor.

A few years ago, working with our partners in the Oregon Coalition to Stop Wage Theft, our clients achieved a major improvement in the law when the legislature applied the Oregon Contractor Registration Act (OCRA) to the construction industry.  OCRA requires that construction contractors only use labor recruiters who are licensed by BOLI and have posted a bond to guarantee payment of wages. Under this law, it is the responsibility of the construction contractor to check licensing and only hire reputable subcontractors to recruit their work force.  If they don’t check the license, construction contractors are explicitly liable for any wages and statutory damages owed to the workers.

Most construction companies have seemed to be either unaware of OCRA or ignoring their obligations under it.

In March, NWJP clients won an important ruling in federal court on OCRA claims.  The case involved five roofers who were not paid for a number of weeks of work.  They had demanded their wages from the roofing company as well as from the unlicensed labor recruiter.  Neither entity was willing to pay the full amount of wages owed.  NWJP represented the workers to sue both the labor recruiter and the construction company to collect what they were owed.

Two years after the roofing work was performed, NWJP attorney Kate Suisman successfully argued that the roofing company had failed to find out if the labor recruiter it used was licensed.  In the first written opinion applying OCRA to the construction industry, Judge Michael Simon of the US District Court of Oregon found that the large roofing company was a joint employer of Plaintiffs, had used an unlicensed labor recruiter in violation of OCRA and was therefore liable to the workers for wages and penalty damages.  The ruling in this case shows that construction companies who use unlicensed labor recruiters can be held liable for workers’ wages and substantial penalty wages under OCRA.

In fighting their case, these workers hopefully have gotten the attention of the construction industry, and have established a precedent that will help many workers in the future.