A lawsuit filed in Oregon federal court has a special lesson for dodgy contractors: Try to get out of paying workers’ fringe benefits, and a U.S. marshal might show up at your door.
On Dec. 1, 2023, a judge issued an arrest warrant for Leo Castro, the CEO of Lone Star Rebar Installers. For more than a year, Castro has evaded court appearances in a lawsuit filed Sept. 30, 2022, against his Texas-based construction company by Ironworkers Locals 846 and 847. Together the locals serve as a regional district council representing more than 1,000 members in 24 states across the South and the Great Plains.
In February 2022, Lone Star hired union workers under a one-project agreement to build a launch tower for SpaceX in Cape Canaveral, Florida. In the contract, the union and Castro agreed to split the cost of benefits and pay that money into the union’s trusts. Castro would pay $2.87 per hour to each employee, and the workers would see about 5% of their total pay deducted.
Castro was supposed to send that money to William C. Earhart Company, the Portland, Oregon-based third party benefits administrator the union uses to manage its trusts. But he never sent the money.
Michael Evans, the attorney representing the unions, said the regional council sent Castro a letter demanding payment but never heard back. So they filed a lawsuit and asked a judge to order him to audit the work records and pay the benefits. (The case covers people that work in multiple states, but Evans filed the suit in Oregon because that’s where the benefits payments will go). Despite multiple attempts to call the contractor to court, he never showed.
Evans said he hasn’t been part of a suit that reached the arrest stage in at least a decade, but it’s not unheard of. After the 2008-2009 recession, Evans saw a number of contractors brought to court with arrest warrants after they’d tried to skirt on benefits to save money.
“When the contractor really sticks their head in the sand, this is the last way we have to get their attention: Send the marshal out to arrest them,” Evans said.
On Dec. 21, the judge rescinded the arrest warrant because Castro finally contacted Evans and agreed to an audit.
I am so glad to see Oregon is cracking down on paying employees whether it be union dues or whatever. My poor son who lives in Rockford Illinois works for a gas station and the guy pays him under the table as well as his workers I took my boss to court labor board court in California for trying to do the same thing I don’t know how these employers get a lot way with it when our economy is so bad. If you want the help you need to pay for the help