San Jose sued for records related to alleged illegal labor practices

A labor organization is suing San Jose for failing to turn over public records it claims are vital to its investigation of alleged wrongdoing at a massive public works project.

The South Bay Piping Industry is seeking documents related to a major upgrade of the San Jose-Santa Clara Regional Wastewater Facility, according to a verified lawsuit filed on Thursday. The project is the largest advanced wastewater treatment facility in the western United States, occupying 2,600 acres and serving more than 1.4 million residents in eight South Bay cities, as well as portions of unincorporated Santa Clara County.

In 2016, San Jose hired Walsh Construction to complete a project—referred to as the Digester and Thickener Facilities Upgrade—for $107.9 million. Costs ballooned due to additional work and delays. In April, the San Jose City Council approved $14 million to cover new construction costs. The project is anticipated to wrap up later this year.

The lawsuit is the culmination of several years of fighting between the city and Mauricio Velarde, compliance director for the South Bay Piping Industry. Velarde told San José Spotlight he believes the city is inappropriately refusing to hand over records related to four requests that will show evidence of illegal labor practices. Velarde previously blew the whistle on allegations of wage theft at an emergency housing project in San Jose.

Velarde has already obtained some records that appear to show instances of wrongdoing. Certified payroll records show at least one unlicensed subcontractor has worked on the project. A different subcontractor claimed exemption from workers’ compensation insurance for more than a year, but records show the company had at least three employees during this period.

“And this is just the tip of the iceberg,” Velarde said. “I already know a lot of things because I’ve done my investigation in the field, talked to workers in their homes… they’re giving me some of this info.”

Specifically, the suit is seeking documents as part of Velarde’s investigation of why the project is not being built to the original specifications and why the contractor appears to be using subcontractors not listed on the original bid. Velarde also wants records that will shed light on why the subcontractors may not have submitted certified payroll records, or if they did, whether those records included proper prevailing wages. He also wants to see if certain subcontractors worked with employees and if so, whether they had workers’ compensation insurance.

“Plaintiff’s investigation has been stymied by defendant city of San Jose’s deliberate efforts to stall and not produce all requested documents,” the complaint reads. “This has included efforts by the city of San Jose to block access to the project to agents of plaintiff onto the (facility).”

The city attorney did not immediately respond to a request for comment. Walsh Construction was not available for comment.

In his latest records request, Velarde asked the city for all billing invoices for welding companies hired by Walsh Construction for the upgrade project. The city told Velarde in June it did not have these records.

Velarde said he’s shocked that the city claimed it didn’t have invoices for subcontractors. The complaint notes that it’s best practice for a city to require the submittal of subcontractor invoices as part of its monitoring for a project moving north of $170 million.

“The city of San Jose has really failed at its enforcement,” Velarde told San José Spotlight. “The San Jose hardworking taxpaying families should demand more and should be outraged.”

Contact Eli Wolfe at [email protected] or @EliWolfe4 on Twitter.