Wage law pits union against local contractor
07/05/2008, 9:20 pm
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Kristin Szremski
Business editor
kszremski@daily-journal.com

Photo: Michelle Gannon
Larry Trimby, of Bourbonnais and Kevin Prince, of Limestone, stand at the corner of Schuyler and Merchant St Monday morning protesting Goodberlet who is working on the roof of the Standard Title and Guarantee Company behind them.
More photos from this shoot

Labored viewpoints

Organizer Kevin Prince knows there's no way Goodberlet Heating and Air Conditioning of Kankakee will unionize, but that doesn't stop him from hanging around the business on Brookmont Boulevard, handing out his business cards to employees.
"There's no reason they shouldn't talk to me about their wages and benefits," said Prince, secretary and organizer for the Sheet Metal Workers' International Association Local Union 265, based in Carol Stream.

But Tom Goodberlet, who owns the business and runs it along with his wife Anna and their children Kyle and Sara and his brother Dave, said Prince's actions are among the many harassment techniques the union has dogged them with for the past several years. Goodberlet said Prince and other union members have been relentless in picketing Goodberlet job sites or giving customers literature defaming the contractor.

And they blame Prince for filing complaints against them with the Illinois Department of Labor. The complaints have resulted in at least seven citations since 2006 for not paying prevailing wages and benefits while working on projects funded with taxpayer money.

The latest citation -- a "notice of first violation" -- is the most serious. Filed in May, it states Goodberlet could lose its ability to work on publicly funded projects if it is found in violation of the Illinois Prevailing Wage Act one more time within the next five years.

The conflict broaches the complicated issues of labor law and prevailing wages, a standard set by the state. It brings into focus union vs. nonunion contractors and the struggles of a family-owned business vs. a self-described champion for the working man.

The citations

There are no clear-cut heroes or villains in this story.

On one side is Goodberlet Heating and Air Conditioning, a 26-year-old business with 13 employees. Goodberlet said he pays his employees on average $26 per hour plus benefits in a county where the median hourly rate is $20, according to the U.S. Census Bureau. "We're personally (in)vested in everyone who works here," Anna Goodberlet said.

On the other side is Prince, who said he is looking out for working people. "It's about the wages for the working people ... that the workers get the wages that the state says they should," he said.

And weaving throughout the conflict is the Prevailing Wage Act, which says contractors must pay the state standard when working on public projects. Unions, however, would like to see all contractors pay prevailing wage on every job because it levels the playing field, Prince said. The prevailing wage for Kankakee County in July is $40.20 plus benefits, according to the state labor department.

Using the Freedom of Information Act, The Daily Journal obtained more than 500 pages of documents from the labor department. We found that Goodberlet failed to pay prevailing wage in seven cases. These are the labor department's findings:

* June 8, 2006 -- Bradley Public Library; heating and air conditioning work. Total for back wages and penalties -- $702.12

* June 8, 2006 -- Bradley Public Library; install water heater. Total for back wages and penalties -- $42.50

* Sept. 2006 -- Kankakee River State Park; furnace repair. Total for back wages and penalties -- $37.67

* Nov. 2006 -- Bradley Public Library; heating and air conditioning (related to above work). Total for back wages and penalties -- $3,280.49

* Jan. 2007 -- Dept. of Health and Human Services; Replace HVAC system. Total for back wages and penalties -- $506.04

* Oct. 2007 -- Dept. of Health and Human Services; Replace HVAC system. Total for back wages and penalties -- $51.38

* Jan. 2008 -- Dept. of Health and Human Services; HVAC maintenance work. Total for back wages and penalties -- $1,102.30.

The total amount Goodberlet paid over the 18 months totaled $4,977.88.

Goodberlet said that amount is relatively insignificant and proves Prince and the Sheet Metal Workers union have a vendetta against him.

"He wants to put us out of business or to organize us, that's what it comes down to," Goodberlet said from his office Wednesday.

"I have no intention of putting anybody out of business," said Prince, who attended Bradley-Bourbonnais Community High School at the same time as Goodberlet. "He's tried to make this a personal issue in the past. I don't understand where that comes from."

To Goodberlet, though, it is a personal issue. "It's a union nonunion; it's actually a Kevin or a Tom deal."

'Ignorance and misunderstanding'

Goodberlet said the citations are a result of ignorance and misunderstanding. He said he didn't know he had to pay prevailing wage while working on the Bradley library.

Normally, prevailing wage requirements are written into construction contracts, said Bradley library attorney Jack Beaupre. But there was no written contract for the water heater job or the HVAC job, and the library did not go out to bid on either project, Beaupre said.

"The mistake the library made was hiring a non-union contractor without a contract," he said.

The human services department building is owned by Panozzo Rippon, a private company. Goodberlet said he was told by both Panozzo Rippon and Robert Wesselhoff, who works in the labor department's prevailing wage division in Manteno, that he did not have to pay prevailing wage on the job because the building was owned by a private company.

Wesselhoff returned a phone call placed by The Daily Journal Wednesday. When asked whether he told Goodberlet he didn't have to pay prevailing wage, Wesselhoff immediately tried to end the conversation.

"I don't want to be a part of this," an animated Wesselhoff said. "I don't want my name used." He referred further questions to Anjali Julka, labor department spokeswoman.

Anna Goodberlet said Wednesday they didn't know they had violated the state's wage law on the Panozzo Rippon building, which was performed throughout much of 2007, until the labor department contacted them in a letter dated Jan. 8, 2008.

They were distraught at the news, she said.

"We started this business when we were in our 20s," she said while fighting back tears. "We have tried to follow every law to the letter, and if we find out we don't we do everything in our power to rectify that."

Much ado about nothing?

So, does the nominal amount Goodberlet paid in back wages and penalties mitigate the situation somewhat? In other words, is this much ado about nothing, just more union smear tactics as Goodberlet contends?

Not necessarily, said Professor Robert Bruno, director of labor education programs at the University of Illinois at Chicago's Institute of Labor & Industrial Relations.

"There is a law. You don't have to unionize but you do have to pay prevailing wage," Bruno said. "Under-bidding typically leads to bad work, unstable employers, employers pulling down the standard in the community, and that has all sorts of negative economic impacts in a community."

Goodberlet has a history of community service, from donating labor and materials to Habitat for Humanity to giving a furnace to a homeowner whose house burned down. But Bruno emphasized wage standards have to be upheld across the board.

In general, under-bidding on government projects results in a less trained workforce, a higher rate of workplace accidents, and increased health problems, all of which can drive away investors and anger taxpayers, Bruno said.

"I would make the case from economic analysis and data, he's (Goodberlet) paying below market, operating as a kind of Wal-Mart in the building and trade construction industry," he said.

Prevailing wage laws are the result of the federal Davis-Bacon Act of 1931, which set wage requirements for all government construction projects. The act was the result of the Great Depression and the need to hire local workers. Several states have enacted their own standards, referred to as "Little Davis-Bacon" laws. Modern advocates of the laws say that in addition to hiring skilled labor, prevailing wage laws also encourage apprenticeship training programs.

Opponents of prevailing wage laws say they are outdated and expensive. But Bruno said there is ample data supporting standardized pay laws.

In states where prevailing wage laws were repealed, work-related injuries and illnesses increased 15 percent, and construction apprenticeships declined by 53 percent, Bruno said, citing studies conducted by the National Alliance for Fair Contracting.

An Alliance study also estimated that if prevailing wages laws were lifted nationally, workers' compensation costs would increase by $3 billion per year. And finally, the Alliance found a 60 percent return on each dollar invested in construction projects under prevailing wage standards. "There's more money paid into the local economy, more sales tax," Bruno said.

Who's watching?

The U.S. Department of Labor and each state's counterpart, in theory, should be auditing public construction projects by keeping track of building permits, tax forms and other documentation that's filed with them, Bruno said. But in reality, the agencies are understaffed so small contractors often fall through the cracks.

"Unions happen to have the resources, staff and the gumption to play the role of monitor," Bruno said.

Even so, Prince said the labor department "relies on people like me or the workers themselves. I've seen where one contractor filed on another contractor," he said.

Labor department spokeswoman Julka only said via e-mail, "When a situation of an alleged violation is brought to the attention of the Illinois Department of Labor, the department promptly launches an investigation at that time."