Bus manufacturer settles fraud case related to government contract

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

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

According to the lawsuit, which was filed on behalf of the transportation agency and the State of California, the company said it would create more than 50 full-time positions at a facility in Ontario, California, more than 90 percent of which it would pay. at least $18.35 per hour. But documentation uncovered by Jobs to Move America indicated that most workers made $17 an hour or less at the beginning of the contract. The complaint also accused New Flyer of sending false information to LA Metro about worker benefits.

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

The company also agreed to take steps to help ensure better compliance in subsequent contracts with LA Metro, including appointing a company official trained in wage and benefit tracking to monitor compliance.

In recent decades, government agencies have awarded contracts to contractors on the condition that they produce a certain amount of work 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, Ala.

Under the benefits agreement, which Ms. Janis said was the first of its kind in the Deep South, the company said it would ensure that 45 percent of new hires at the plants were from historically disadvantaged groups, including black and indigenous, women and veterans The company has committed to reserving at least 20 percent of promotions at each plant for members of these groups.

“I pinch myself because we got to this point,” Janis said in an email. “It’s an amazing thing to have the opportunity to work with a company to build real racial equity for factories in the Deep South.”

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

The benefits agreement also requires the company to establish a variety of training programs, such as one that teaches workers how to do metal, mechanical and electrical work, and allow an independent community group to help workers file discrimination claims. and harassment.

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