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The Department of Labor is moving to ban the company that runs the cafeteria in the Dirksen Senate Office Building from receiving federal contracts for three years, the agency announced Dec. 30.
The DOL alleged in July that Restaurant Associates LLC violated the Service Contract Act by misclassifying hundreds of workers at the U.S. Capitol. The company agreed to pay $1,008,302 in back wages for 674 cafeteria workers.
Now the department is seeking to block the company and its CEO, Dick Cattani, from bidding on other federal contracts, a process known as debarment. If debarred, the employer would be placed on a list of companies ineligible to bid on government contracts for three years.
Restaurant Associates won a seven-year contract extension in December 2015 to continue operating the cafeteria, Lenore Fortson, a DOL spokeswoman, told Bloomberg BNA Dec. 30. The company would retain that contract even after debarment but be prohibited from bidding on future government contracts. The company is allowed to enter into new contracts while the issue is being litigated, the DOL said.
The DOL’s actions are surprising and disappointing, Sam Souccar, the senior vice president of creative services for Restaurant Associates, told Bloomberg BNA in a Dec. 30 e-mail.
“Restaurant Associates, which had no history of previous Service Contract Act violations, fully cooperated in the investigation. The company immediately paid all back wages owed and made all changes to pay practices going forward as requested by DOL,” Souccar said.
The company was working to ensure future compliance with the department, he said, calling the DOL’s decision “unprecedented in these circumstances.”
The investigation into Restaurant Associates began after Good Jobs Nation, led by the Change to Win labor federation, submitted a complaint to the DOL in January. The complaint alleged that Restaurant Associates unlawfully changed worker job classifications to avoid giving raises that were contained in the December 2015 contract renewal.
In September, Good Jobs Nation sent a letter to the DOL saying many workers were still not paid their due by Restaurant Associates. Some workers subsequently received larger checks than others with no explanation, Paco Fabian, spokesman for Good Jobs Nation, told Bloomberg BNA Dec. 30.
Even though only future contracts would be affected by the debarment, the DOL’s actions are a step in the right direction, Fabian said.
“Hopefully the company will start abiding by the law,” he said. The cafeteria workers do not belong to a union, but Good Jobs Nation will attempt to organize them in the future, Fabian said.
Restaurant Associates received its contract from the Architect of the Capitol, the agency responsible for maintaining the U.S. Capitol, House and Senate office buildings and other federal properties.
The agency is aware the DOL is pursuing debarment of the company and will be closely monitoring the process and awaiting the result, Erin Courtney, a spokeswoman for the AOC, told Bloomberg BNA.
The contract is also overseen by the Senate Rules and Administration Committee.
“The penalty is fair and should serve as a warning shot to the other contractors who might try to save a buck on the back of their hardworking employees,” Sen. Chuck Schumer (D-N.Y.), ranking member of the committee, said in a statement to Bloomberg BNA Dec. 30.
Schumer, along with the entire Senate Democratic caucus, signed a letter in March asking the DOL to examine Restaurant Associates’ federal contracts.
The company’s “callous mistreatment of these workers is completely unacceptable,” Schumer said in the statement.
Following the DOL’s official complaint, the case will be assigned to an administrative law judge, Fortson said. Restaurant Associates has 30 days to answer. The litigation could take anywhere from 90 days to a year.
If the company is debarred, employees should not fear losing their jobs, Fabian said.
In addition to Restaurant Associates’ right to retain the existing contract, the workers are protected by Executive Order 13,495, signed by President Barack Obama in 2009. The order protects federal workers from losing their jobs when an old contract ends and a new company is brought in. The workers have the right of first refusal under a new contract, Fabian said.
To contact the reporter on this story: Jaclyn Diaz in Washington at jDiaz@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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