Felony charges filed against electrical contractor for underpaying workers

Two partners in an electrical contracting firm face felony charges for violating Minnesota’s prevailing wage laws by underpaying their workers.

Hennepin County Attorney Mike Freeman announced Monday he was filing felony charges against Thomas Robert Clifton, Lake Elmo, and Earl Keith Standhafer, Burnsville, partners in C&S Electric. The charges carry a maximum sentence of 20 years’ imprisonment and/or a $100,000 fine.

“This company… deliberately cheated their workers… and systematically took a quarter million dollars from their pockets,” Freeman said, speaking to the media and representatives of Minneapolis building trades unions at the United Labor Centre. “I say cheating because… this is taking money away from workers who earned it,” Freeman said.

C&S had won a subcontract from Donlar Construction Company to perform electrical work for Normandale Community College’s Kopp Student Center project.

The work took place from July 2010 to August 2011 and was subject to Minnesota’s prevailing wage laws, which set standards for wages and benefits paid to workers when public funds are involved in a construction project.

According to the felony complaint, C&S submitted false payroll records to Donlar certifying that C&S workers were being paid prevailing wages. “Through the defendants false representations to Donlar Construction that the employees were being paid the prevailing wage rate, the defendants fraudulently obtained funds under a subcontract between C&S Electric and Donlar Construction,” the complaint read.

Approximately $257,250.47 in wages and benefits that 16 workers should have been paid under prevailing wage requirements was not paid by C&S, the complaint stated.

“The workers had the courage to come forward,” Freeman said, and a complaint was filed with the Minnesota Department of Labor and Industry, which investigated.

DOLI sent out questionnaires to C&S employees. “Every employee that responded indicated that they were not paid prevailing wage for the Normandale Project,” the complaint read.

Donlar Construction “made the workers whole” and paid the workers the shortfall, Freeman reported. Donlar then won a civil suit against C&S, Clifton and Standafer seeking reimbursement.

Freeman said he was taking the additional step of filing felony charges against Clifton and Standafer “because these guys were deliberate about it.”

C&S was the low bidder for the electrical work on the Normandale project, the complaint read. And, Freeman said, “what’s the best way of coming in low bid? Don’t pay workers prevailing wage.”

“When you cheat on prevailing wage, you mess up the contracting process,” Freeman said. “It hurts the reputable contractors.”

C&S formerly operated as Wright Electric and had a long history of problems paying area standards for wages and benefits, said Dan McConnell, business manager of the Minneapolis Building and Construction Trades Council. “They’ve been in the spotlight for some time.”

In 2013, the Minnesota Department of Labor and Industry completed 212 prevailing wage investigations. Since 2010, DOLI has recovered $1.77 million in back wages due to workers in cases involving prevailing wage violations.

“Hennepin County is the only county in the state of Minnesota that has a prevailing wage office,” Freeman noted. “I think the word is out that this is a prevailing wage county” which enforces prevailing wage laws, Freeman said. “We look forward to proving our case in court.”