California sues janitorial services

As part of a crackdown on California’s underground economy, state officials sued two janitorial companies Wednesday, alleging “flagrant violations” of labor laws at restaurants in Los Angeles, San Diego and Orange counties.

The suit accuses Excell Cleaning & Building Services Inc. and MO Restaurant Cleaning Services of California Inc. of treating employees as independent contractors to avoid paying minimum wage and overtime or providing rest and meal breaks, among other benefits, as state law requires.

The companies sometimes forced janitors to work 10-hour shifts seven days a week in exchange for a flat $50 payment per day, the suit claims. It seeks back pay for as many as 300 people and damages that could total more than $5 million, plus an injunction requiring the companies to cease unlawful practices.

Some employees were paid with checks that bounced, the lawsuit says.

A lawyer representing Excell Cleaning didn’t return telephone calls. Callers to Excell’s corporate headquarters in Houston hear a recording that says, “The party you are calling has temporarily disconnected their service.” MO Restaurant Cleaning, whose California address is an apartment in Sacramento, has no publicly listed phone number. The suit says the two companies are related, perhaps through common ownership or financial control with “centralized control of labor relations.”

In recent years, regulators in California and other states have stepped up oversight of companies that illegally classified delivery drivers, couriers, home care helpers and other workers as independent contractors to dodge a number of labor laws. Switching to the independent contractor model can save employers 30% to 40% in labor costs, allowing them to undercut competitors using conventional employees.

Last month, state Atty. Gen. Jerry Brown sued an Anaheim-based staffing company, saying it helped building contractors avoid paying workers’ compensation insurance, and a Downey drywall contractor, charging that it didn’t pay minimum wages, overtime, payroll taxes and workers’ comp insurance.

The two companies named in Wednesday’s suit deployed janitors to a number of well-known restaurant chains, Labor Commissioner Angela Bradstreet said, including Yard House, which has outlets in Brea, Costa Mesa, Irvine, Long Beach and San Diego and in other states.

Bradstreet declined to name the other chains.

The suit, filed in Los Angeles County Superior Court, is the first to result from a partnership between Brown’s office and the Labor and Workforce Development Agency.

Joint prosecution will allow the state to seek higher damages on behalf of the janitors than if the attorney general had proceeded alone, said Victoria Bradshaw, head of the labor agency.

The two companies “made a conscious business decision to operate outside the law,” Bradshaw said, by employing unskilled or undocumented workers “who have few other choices.”

The labor agency began investigating more than a year ago after several Excell employees complained to state officials, who cited the company for violations of the state labor code, Bradstreet said.

Excell appealed but failed to appear at hearings, she said. “We offered to settle the case,” she said, characterizing the company’s response as “insulting.”

The state’s lawsuit represents a welcome step toward enforcing laws that many employers have long violated with impunity, said Ruth Milkman, who directs UCLA’s Institute for Research on Labor and Employment.

“Unfair competition is supposed to be illegal,” she said.

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