Panel Probes Bias Charges Against Rail Contractor

An alleged “pattern of discrimination” against black and Latino workers by one of the largest contractors on the $700-million Los Angeles-to-Long Beach light-rail project is being investigated by the Los Angeles County Transportation Commission.

The Missouri-based Herzog Contracting Corp., whose non-union California arm has been dogged by political controversies and labor disputes, is being accused by several former employees of unfair hiring and firing, favoritism toward white laborers, discriminatory pay practices and improper layoffs of minorities.

Workers’ Complaints

Commission staff said the commission has heard complaints of discrimination from about 12 employees and job applicants. One of those, Dennis Johnson of Venice, has contended in statements to the commission that he was sworn at and ridiculed, paid lower wages than white machine operators doing the same work and abruptly fired in November on false charges.

“These people are biased . . . and shouldn’t be here,” he told the commission at a meeting Wednesday.

The Herzog firm, which operates public landfills in San Diego County and has laid track for rail systems in Sacramento, San Diego, Washington and Buffalo, holds about $65 million in contracts on the Long Beach light-rail line. It is one of the largest public works projects in decades to be launched in the poor and heavily minority communities of the central and southern parts of the county.

May Be Denied Future Jobs

Should the commission find against Herzog, the firm could be knocked out of the running for additional large construction contracts on the rail line to be awarded next month.

Commission documents obtained by The Times indicate that some evidence has been found leading investigators to suspect that discrimination took place. In one case, a local black worker was abruptly laid off by Herzog and apparently replaced by a white worker from St. Joseph, Mo., where Herzog is headquartered, according to an internal commission report. The white worker told a commission investigator that he had not even filled out a job application.

In a letter to Herzog last month, the commission’s external affairs manager, Sharon Sivad-el, wrote: “Based upon the information available to us and in the absence of any responsive information from you, it appears that there is a pattern of discrimination in Herzog’s hiring and treatment of black and Hispanic workers.”

After missing a December deadline set by the commission, Herzog’s officials are scheduled to present their first official response to the charges and provide company employment records to the commission later this week.

Herzog’s attorney, George Kieffer, said the firm has a strong affirmative action program, is exceeding the commission’s minority hiring goals and “takes any charge like this very seriously.” He added that the firm is conducting an internal review and will cooperate fully with the commission probe. But Kieffer said, “At this point, the complaints appear to be unfounded.”

Herzog, a target of organized labor, has been caught up in controversy since beating out a lower-bidding firm for a $43-million rail-laying contract on the Long Beach project early last year.

Rep. Mervyn M. Dymally (D-Compton) and women and black business groups charged that Herzog was not using enough minority firms. Herzog denied the charge.

Controversy also surrounded the 7-4 commission vote on the contract and the influence allegedly wielded by the firm’s politically well-connected Westside attorney and lobbyist Mickey Kantor. The losing low bidder, Morrison-Knudsen Co., which had been disqualified by the commission staff over an insurance dispute, noted that the commission went against its own staff recommendation to reject all bids and start again. Morrison-Knudsen officials claimed that Kantor had somehow influenced commission votes. Kantor denied the charge.

When Herzog was up for another $12-million contract in October, critics said the firm had not disclosed, as required, citations for labor law violations and was using minority subcontractors with questionable qualifications, including one headed by a former Herzog employee. An investigation by commission attorneys concluded that Herzog “reasonably” should have disclosed a previous legal dispute between the company and the state over an alleged labor law violation. But the attorneys said the omission was not grounds for denying Herzog the contract.

But Paul Taylor, who heads the commission’s rail construction division, said the latest charges are an entirely new matter.

He said in an interview that the commission is concerned that “what (Herzog) may be doing is musical chairs” with minority workers--repeatedly hiring them and laying them off.