Montgomery County to audit contractor Potomac Disposal over ‘living wage’ payments

September 11, 2013

A top Montgomery County official said Wednesday that the county will begin an audit of a Gaithersburg trash-hauling contractor to determine whether the company is paying workers a “living wage,” as required by county law.

General Services Director David Dise said recent news accounts of labor unrest at Potomac Disposal prompted the inquiry. Fifty-seven newly unionized Latino drivers went on strike Monday, charging that the company threatened immigration enforcement in an attempt to leverage stalled contract talks. After talks Wednesday between the company and Laborers’ International Union of North America, workers were scheduled to return on Thursday.

Dise, whose department handles all county procurement, said he was concerned about reports that some Potomac employees are paid a rate of $60 to $70 a day, which — depending on how the company is billing the county — may place some workers below the current living-wage threshold of $13.95 an hour

Potomac Disposal President Lee Levine, reached at his Olney home Wednesday evening, declined to comment, saying that his agreement with the union calls for both sides to stop talking to the news media.

“I can’t answer any questions,” Levine said. Asked about the impending county audit, he said: “They can do whatever they want. It’s fine.”

Potomac Disposal, one of Montgomery’s three contract haulers, has a $5 million annual contract with the county for trash and recycling pickup at 40,000 homes in parts of Silver Spring, Bethesda, Rockville and Potomac.

Dise said contractors are required to file quarterly payroll reports that are scrutinized for living-wage issues. Potomac’s reports have never been flagged, Dise said. Nor have filings from the two other trash haulers, Unity Disposal and Recycling of Laurel and Ecology Services of Columbia. But Dise said he plans to initiate audits of those firms as well.

The department investigates wage complaints, but they are relatively rare and often anonymous, Dise said.

If a contractor is found to be paying less than the living wage, it is grounds for terminating the contract and civil action. That has not happened in several years, Dise said.

Three Montgomery County Council members also expressed dismay over the allegations from Potomac workers. Council President Nancy Navarro and council members Hans Riemer (D-At Large) and Valerie Ervin (D-Eastern County) sent a memo to Dise asking him to appear before the council’s Government Operations and Fiscal Policy Committee on Oct. 14 to discuss the issues.

“A lot of things we’ve heard are very disturbing to us,” said Navarro, who joined Riemer in meeting with a dozen Potomac workers Wednesday morning in Rockville. Speaking in Spanish and English, she told them, “We want to know what the county can do to ensure that county funds are not used to fund anti-union intimidation tactics.”

Workers said Friday that the company attached federal I-9 forms to their timecards. The I-9, required by the federal government to verify the identity of all U.S. workers, is usually given to employees shortly after they are hired. Potomac workers said they had never seen the form before.

While Potomac workers are covered by state and national labor laws, a 2004 county statute prohibits the use of county funds to “assist, promote, deter or otherwise influence union activity or organizing.”

But County Attorney Marc Hansen said Wednesday evening that the law was probably not enforceable because a 2008 U.S. Supreme Court decision struck down a similar California statute on the grounds that it was preempted by federal labor law.

“We concluded that if the county statute was challenged, it would be considered invalid,” Hansen said.

But he added that all county contracts have catch­all provisions requiring contractors to comply with all state, federal and local laws. If Potomac were found to have violated federal or state labor laws, it could be grounds for termination of the contract.

The strike turned into a lockout Wednesday, after workers asked to come back but faced a locked gate when they arrived at 6 a.m. At 6:45 a.m. a picketing worker, Arnulfo Carranza, 34, was clipped by a truck leaving the Potomac site. He was taken by ambulance to Suburban Hospital in Bethesda, where he was treated for minor injuries and released.

Montgomery police cited the driver for failing to control speed to avoid a collision, said Officer Janelle Smith, a spokeswoman for the Montgomery County police. The driver was trying to leave the area and went up on a curb, Smith said. There was nothing to indicate that he was trying to hit anyone, she said.

Dan Morse and Jennifer Jenkins contributed to this report.

Bill Turque, who covers Montgomery County government and politics, has spent more than thirty years as a reporter and editor for The Washington Post, Newsweek, the Dallas Times Herald and The Kansas City Star.
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