Drywall Strike Exposes Industry to Federal Scrutiny : Labor: Worker allegations have prompted several agencies to launch investigations that may sully the reputation of subcontractors and builders.
A two-month walkout by workers in the drywall business has yet to win them the union they are demanding. But it has prompted several federal agencies to investigate the industry and may change the way drywall companies do business.
Allegations piling up against the industry paint an unsavory picture of a business that exploits Latinos--many of them illegal immigrants--by paying low wages with no overtime, health insurance or other benefits.
The latest agency to jump into the fray is the federal Department of Labor, which will investigate allegations that the companies don’t pay overtime, a violation of federal law.
The U.S. Immigration and Naturalization Service is already investigating as many as 10 companies that it says may have broken the law by knowingly hiring illegal immigrants.
The number of accusations is unusual even for the construction industry, long considered a business where corners routinely get cut. No matter what the outcome of the strike, the federal investigations could give a black eye not only to the drywall subcontractors but also to the home builders who hire them.
Even the companies’ own trade association, the Pacific Rim Drywall Assn., says that it is urging members to turn in companies that may be violating state and federal tax laws by paying workers in cash only. So far, none has.
“Everybody has suspected one or two guys of doing it,” said Bob Sato, a Newbury Park drywall subcontractor and president of the trade group, which includes most of the bigger drywall companies in Southern California. “When a company consistently underbids you by a wide margin--as much as 35%--there may be something wrong there.”
The state Employment Development Department launched an investigation of cash payments in the industry in 1989. The results were meager, one official said, because few drywall companies cooperated.
That the companies are talking about turning each other in now is ironic, said a former drywall subcontractor who says he left the business because of the corruption. “Where were they when times were good?” he asked.
The investigations are not likely to be finished in time to either help or hurt the drywall workers who walked off the job June 1. Many of them are desperate after having been out of work for two months, and some have gone back to their jobs.
The building industry contends that the strike is running out of steam, that drywall is being nailed onto the wooden frames of houses faster now than early in the strike.
For the 4,000 or so Southern California drywall workers, most of them immigrants from small towns in central Mexico, wages haven’t risen since the home builders broke the union 10 years ago. In the past two years, as the housing market has gone down the tubes, wages have sunk as low as $300 a week.
The strikers have slowed down new-home construction in Orange, San Diego, San Bernardino and Riverside counties. Drywall subcontractors in Los Angeles and Ventura counties say they are less affected.
Like many strikes, this one has seen some violence and vandalism. The animosity between the men who continue to work and those on strike--some of them former friends and even relatives--has increased, and there have been fisticuffs, tossed rocks, broken windows and arrests at construction sites across Southern California.
In fact, a few of the older men among the 400 or so active strikers in Orange County have begun to criticize the confrontational tactics that last month landed 150 drywall workers in jail, the largest mass arrest in Orange County history.
Having hundreds of men picket a site, the dissenters say, means that leaders cannot control all of them; the urge is strong for hungry strikers to jump the fence and start intimidating workers or vandalizing houses.
The men who favor more aggressive tactics tend to be younger. They maintain that run-ins with police--who, they contend, favor the home builders anyway--are inevitable in a labor struggle and that to back off is to risk losing.
“If we take 15 or 20 people to a job site, it has no effect. The men working on that job look at us and think we’re getting weaker,” said Jesus Gomez, a spokesman for the workers. “And we’re not going to beg them to come out so they can help themselves” by joining the strike.
Daily action continues. About 125 strikers demonstrated peacefully at a Placentia construction site Monday and left without incident after two hours.
The region’s powerful home-building industry, meanwhile, remains adamantly opposed to a drywall union. The builders have also tried to distance themselves from their subcontractors: Most say they were not aware of how their subcontractors did business.
While the number of men on strike is probably dwindling, outside support is growing. On a recent weekday afternoon at the carpenters union hall, lent to the drywall strikers for meetings, a panel truck rolled up and strikers began unloading dozens of boxes of cantaloupes and onions.
“This stuff came from Fresno,” said Nicolas Munoz, one the strike leaders, nodding at the cardboard boxes stacked in a corner.
Food and money have been pouring in from unions and Latino groups. The strikers say they have a fund from which those who are tapped out can draw enough to pay their rent and utility bills.
The food is delivered to the union hall, on a busy stretch of Chapman Avenue in Orange. From there, it is trucked out to strikers in San Bernardino County and San Diego. At the union hall, the air is redolent with beans and rice every weekday as lunch is prepared for the strikers.
Lawyers--who weren’t seen until recently in the union hall--sit in corners interviewing clients.
The strikers were initially outgunned in the legal department by the builders and drywall companies. But since the mass arrest a month ago, they have had help from lawyers for advocacy groups such as the California Immigrant Workers Assn. and the American Civil Liberties Union; the public defender’s office; and a private law firm that will go into court today to argue against the first in a series of restraining orders the building industry has obtained against pickets.
On the job site, too, the strikers have a new tactic: They recently let a unionized company from Northern California finish three drywall jobs that were started by non-union Southern California companies.
By allowing only the union contractor to work unhindered by pickets, the strikers hope to put more pressure on the building industry to accept a union. Whether the tactic works remains to be seen, for the three jobs represent only a tiny portion of the drywall business in Southern California.
The union company, JC Drywall Inc. in San Jose, says it is the biggest drywall company in that area. It began working in Orange County two weeks ago.
One of the companies that hired JC Drywall is Newport Beach’s Vintage Communities Inc., a builder of luxury homes in Lake Forest. The company, a unit of the big Los Angeles builder Kaufman & Broad, would not comment.
JC Drywall is using some employees from Northern California and some from Southern California who have been approved by the local carpenters union, owner John Goulart said. And it is paying workers about $700 a week plus health insurance, pension and vacation benefits.
“A man installing drywall all day long deserves to make more than minimum wage,” Goulart said. “You don’t see many of them retire at a ripe old age--by the time they’re 45 or 50, their bodies are all torn up.”
That $700 a week, Goulart said, is still less than what workers make in the San Francisco Bay area, where, he said, his unionized employees are far better trained and more efficient than Southern California’s drywall workers.
JC Drywall, with annual revenue of about $12 million, has been a union company since opening its doors 12 years ago. So have most of the other drywall companies in the Bay Area, Goulart said. JC Drywall has worked in other states, including Hawaii, he said, but has never before had jobs in Southern California.
Moving into the market at this time hasn’t endeared Goulart to Southern California’s 100 or so large drywall subcontractors.
“It’s obviously bothersome that he’s able to come in here and get work done,” Sato, of the drywall trade group, said. “Nobody wants to be removed from a job because he can’t perform.”
