Bus manufacturer settles government contract fraud case

A nonprofit group said Thursday it has settled a fraud complaint it filed against New Flyer of America, a bus manufacturer that is a major government contractor in California.

The nonprofit, Jobs to Move America, accused New Flyer in 2018 of failing to meet the company’s commitment to create several dozen jobs above a certain rate of pay when she won a contract for hundreds of buses with the Los Angeles County Metropolitan Transportation Authority.

According to the legal complaint, which was filed on behalf of the transportation agency and the state of California, the company claimed it would create more than 50 full-time positions at a factory in Ontario, California. , more than 90% of whom would pay at least $18.35 per hour. But documentation discovered by Jobs to Move America indicated that most workers were earning $17 an hour or less at the start of the contract. The suit also accused New Flyer of submitting false information to LA Metro about workers’ benefits.

New Flyer does not admit wrongdoing and will pay $7 million to settle the case, which will likely be split evenly between LA Metro and Jobs to Move America after deducting expenses such as attorneys’ fees. Madeline Janis, the nonprofit’s executive director, said she plans to distribute some of the money to workers who had been employed by New Flyer in California.

The company also agreed to adopt measures to help ensure better compliance in future contracts with LA Metro, including designating a company official trained in payroll and benefits tracking to oversee compliance.

In recent decades, government agencies have awarded contracts to contractors on the condition that they produce a certain number of jobs or pay certain wages and benefits, but enforcing these commitments can be difficult.

As part of the settlement, New Flyer has agreed to enact a so-called community benefits agreement that applies to its plant in Ontario, California, and a plant in Anniston, Alabama.

As part of the benefits deal, which Ms Janis said was the first of its kind in the Deep South, the company said it would ensure that 45% of new factory hires were from historically disadvantaged groups, including black and aboriginal people, women and veterans. The company is committed to reserving at least 20% of promotions in each plant for members of these groups.

“I pinch myself that we have come to this point,” Ms Janis said in an email. “It’s pretty amazing to have the opportunity to work with a company to build true racial equity for factories in the Deep South.”

Jobs to Move America had highlighted a worker survey by an Alabama A&M University professor showing that, on average, New Flyer was paying white workers significantly more than black workers at the Alabama plant. The company had said that all employees with the same grade and seniority were paid the same.

The benefits agreement also requires the company to set up various training programs, such as one that teaches workers to perform metal, mechanical and electrical work, and to allow an independent community group to work. help workers file complaints of discrimination and harassment.

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