A federal judge this week ruled that a Dayton-area company owes almost $1.5 million to about 250 cable installers for misclassifying the workers as independent contractors, a violation of federal labor law.
Cascom Inc., a now-defunct Fairfield-based company, handled television, telephone and Internet installation services in southwest Ohio for Time Warner Cable.
Owned by septuagenarian Julia Gress, the company went out of business in 2011 because it was unable to negotiate a new contract with Time Warner.
In 2009, the U.S. Department of Labor filed a lawsuit in U.S. District Court for the Southern District of Ohio against the company for allegedly classifying and paying its cable installers as independent contractors when they were in fact employees.
“Cascom’s business model also hurt law-abiding employers, who were undercut by this illegal practice,” said Secretary of Labor Thomas Perez in a prepared statement.
Cascom required installers to fill out employment applications and wear T-shirts featuring the company logo, court documents show. Installers were paid for every installation — not by the hour — and they were forced to buy their own tools.
Some cable installers said they often worked 60 hours or more per week with no overtime pay.
Installers interviewed last year by the Dayton Daily News said they did not know Cascom was doing anything wrong at the time, but later they learned more about labor law and now realize the company was violating it.
“We didn’t know any better,” said Will Lunsford, who worked as an installer for six years.
Misclassifying employees as contractors saves companies money because they do not have to pay unemployment insurance, payroll taxes and workers’ compensation, the labor department said.
Misclassified workers do not receive important benefits and worker protections, such as family and medical leave, overtime or minimum wage.
Companies that misclassify workers often can win contracts and business because they can charge less than competitors who follow the law, officials said.
U.S. District Judge Thomas Rose ruled Tuesday that Cascom violated the Fair Labor Standards Act and thus owes $1.47 million in back wages and liquidated damages to about 250 former cable installers.
The labor department said since the company no longer exists, it will seek to collect from the owner as well.
“The findings in this case bring justice to workers and their families by providing them with their rightfully earned wages,” Perez said. “The labor department is committed to ensuring compliance to protect middle-class workers and to level the playing field for responsible employers.”
Cascom’s attorney, David Duwel, declined to comment because he has not had a chance to speak to his client.
But he previously said Cascom ownership had no clue it was violating the law, and it was simply following decades-old industry standards.
The company previously said it fully cooperated in the investigation, but disputed the amount sought in back wages.