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Unsubstantiated Allegations Against District SCUSD Contractors Threaten Real Losses for Students

Portable classrooms are needed at Laurelwood Elementary to handle next year’s enrollment, but before they can be put down, paving and other infrastructure work – from plumbing to wiring and ADA compliance – needs to be done. Santa Clara High School’s 16 year-old tennis courts – where the portables were used during five years of renovation – are past the point of no return, and are in dire need of rebuilding.

Both projects must be done before school starts eight weeks from now.

Here’s the picture if they’re not: Overcrowded classrooms and state fines for not complying with class size reduction mandates.

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Contracts for the Laurelwood and SCHS construction were up for approval at the May 28 and June 11 meetings. Both were approved, 4-2, but not before hearsay accusations of labor law violations were leveled against the companies submitting the winning bids, without any evidence to back them up.

SCUSD has satisfactorily done business with both companies for many years – that wouldn’t be the case if there were judgments against them for labor law violations. Both companies are non-union.

Trustees Christopher Stampolis and Noelani Sallings lobbied to reject the bids from Silicon Valley Paving (Laurelwood paving and portable placement) and Dryco Construction, (SCHS tennis courts) and send the RFPs out for bid again.

Sallings wants a Project Labor Agreements (PLA) policy in SCUSD. Lacking that, she says the district has insufficient assurance against abuses by its contractors. Stampolis focused on the immediate goal of wresting the contracts from Silicon Valley Paving and Dryco. Both Sallings and Stampolis say there was no communication between them.

SCUSD contracts exhaustively define compliance with all labor law (15-20 pages altogether) and requirements for demonstrating it – including paying prevailing wages, and declarations that the company has no outstanding labor violations and has had no such charges for at least five years. Contracts stipulate that contractors won’t be paid if there are unresolved complaints about wages and benefits.

Low Bid Makes “No Sense” Says Stampolis

On May 28 Stampolis moved to reject SV Paving’s lower bid and send the RFP out for bid again. It didn’t “make sense,” he said, suggesting that the lower price pointed to questionable labor practices – even though Stampolis didn’t find similar fault with larger bid differentials on other jobs approved that evening. If the bid was sent out again, Adams said unequivocally that the work wouldn’t get done on time.

“You can do a quick bid, Larry,” Stampolis insisted, suggesting a special meeting (requiring 24, not 72, hours notice) one minute before the regular meeting to review new bids. He didn’t explain why new bidders would jump in during construction’s busiest season.

 “This could all be fixed if we had a Project Labor Agreement* in place,” interjected Sallings. “Until we have a PLA, our contracts are our conscience.” Sallings makes no secret of her advocacy for PLAs, and has asked for a public study session on the merits of a PLA policy for SCUSD.

“The law is that we have to pay prevailing wage,” said Trustee Andrew Ratermann. “If there’s a concern we can step up our oversight.”

“We really aren’t watching,” Stampolis said dismissively. “This is where companies who aren’t doing the right thing can put pressure on folks.” 

While the treatment of all workers on district projects should always be high on board’s priority list, Trustee Jodi Muirhead said, it was irresponsible to block essential work just to make a point.

Guilty Until Proven Innocent

On June 11, the same charge was leveled at Dryco Construction, the lower of two bidders on the rebuild of Santa Clara High School’s tennis courts. Only this time the inflammatory phrase “wage theft” was deployed. “Wage theft” is a media-genic new moniker for age-old ways of exploiting workers – especially unskilled, immigrant and undocumented workers.

Sallings stated that based on information she had received, the company was being sued for wage theft; a charge that she acknowledges she later found to be untrue. “I made a mistake and I’m going to correct that,” she told the WEEKLY. There is no current lawsuit in the County Superior Court.

Stampolis let the accusation lie, instead interrogating Adams about how long the work would really take, whether the courts could be rebuilt in stages during school breaks or the work done while school was in session. Even after getting the answers ‘no, no, and no,’ Stampolis persisted, “So is there any possibility of it getting done before Summer 2016 … if we didn’t vote ‘yes’ tonight what would it take, would there be any [alternative] to waiting a year?”

Trustee Michele Ryan interrupted Stampolis’ brainstorming, saying, “This is the second meeting in a row where some trustees have some information about the bidders that isn’t shared with other trustees. If we have this on the agenda a week before, if there are concerns, that information [should] get shared with all trustees.” Stampolis replied that the Brown Act prohibits communications among board members.

“You can submit it to the superintendent and he can forward back out,” Ryan answered. “I ‘hear’ that they’re being sued for wage theft. People can be sued for all kinds of things. If that’s shared with staff they can come back with this as part of their report.” Adams and Allgire said they weren’t told about any of these allegations.

“We can’t just throw it out there that there’s a lawsuit,” said Muirhead. “We don’t know the status of it, if there’s any merit. It might be hearsay.” If the trustees felt a new policy was needed – a PLA requirement – they should discuss it on a proper agenda. But since it wasn’t part of the bidders’ requirements, she objected to changing the rules after the bids were in.

Stampolis sidelined these concerns as “colleagues trying to scold ourselves … We’re volunteers. To expect that within an hour of it [agenda reports] being posted every trustee can analyze it to the depth [and] get our questions in” was unreasonable.

“We have no duty to follow every recommendation that comes from staff …We have a duty to ask questions at a board meeting … We don’t need to be citing best practices … This board hasn’t a discussion about what it means to be a responsible bidder.” California Public Contract Code Chapter 1, Section 1103 defines “responsible bidder” for all public agencies in the state.

The Case of the Absent Evidence

The more the WEEKLY tried to pin down the source of the wage theft allegations, the more insubstantial they became. At the time of publication, no evidence has been produced; only repeated assertions that wage theft is “widespread.”

Ben Field of the South Bay Labor Coalition, SCU Professor and Coordinator of the Wage Theft Coalition Ruth Silver Taube and Santa Clara/San Benito County Building Trades Council Business Manager Josue Garcia all said, when asked specifically, that they don’t know these companies and know of no allegations against them.

The companies don’t appear on a list of wage theft judgements handed down by the County Superior Court from 2011 – 2014 posted on Sunnyvale Democratic Club’s webpage. And there are no pending lawsuits.

Scandal-Plagued Trustee Attracts More Questions

Since the summer before his election in 2012, through 2014, Trustee Stampolis received $5,000/month in consulting fees from the Laborers’ International Union of North America (LIUNA) Pacific Southwest Region, according to U.S. Dept. of Labor records (www.dol.gov/olms). Stampolis didn’t file his California FPPC Form 700 financial disclosures for 2013 and 2014 until April 2015, after receiving two late notices and being fined.

Stampolis has close ties with the San Jose Laborers Local 270, and was described as working “in government affairs” for the Local in the labor blog, workingintehsetimes.com.

In August 2013, he attended an Alum Rock School District board meeting where Local 270 Business Manager Enrique Arguello presented a “stop payment” notice against a plumbing contractor, according to the meeting minutes. Stampolis “commented that the Local 270 had had lots of problems with Phalanx Plumbing – they were frequent offenders,” without supplying any further evidence. Phalanx is non-union.

No employment lawsuit – or any other lawsuit – has been filed against the company in Santa Clara County. The company has been inspected by OSHA only once, according to the agency’s online records – after a July 2013 complaint.

At an August 1, 2013 County Democratic Central Committee meeting Stampolis stated that “Laborers local 270 can provide grant money for [local Democratic] clubs,” and that “prevailing wage for chartered cities is a big issue,” according to the meeting minutes. Local 270 officials haven’t responded to requests for information.

Stampolis has another link that raises the questions of conflicts of interest.

In Peterson Principal Susan Harris’ harassment complaint against Stampolis in 2014, the trustee was represented by Tomas Margain, who specializes in “wage disputes, public works construction and prevailing wage disputes, and employers in employment litigation,” according to his website (where four of the five entries “About Our Work” are about wage theft). Last December, Margain gave a workshop at Local 270.

Stampolis’ case appears to be the only time in nearly a decade of practice in Santa Clara County that Margain represented anyone in a case that wasn’t about employment or contract law. Stampolis has yet to pay the judgment against him for Harris’ legal fees.

*Project Labor Agreements (PLAs) pre-hire agreements with labor organizations imposing union-scale wage rates and benefits for all employees working on a specific project, contractors and subcontractors alike. Compliance is monitored by union reps well as the employer. In return, unions agree not to strike or otherwise disrupt work.

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