EEOC v. Morgan Stanley
Resolved Case
District of Columbia v. Power Design
In 2024, Outten & Golden secured a $3.75 million workers’ rights settlement on behalf of the District of Columbia’s Office of Attorney General (OAG).
This settlement, which includes $1.7 million in restitution to 1,200 harmed construction workers, is the largest recovery in a workers’ rights enforcement action in District history, according to Attorney General Brian L. Schwalb.
Working with the OAG’s Workers’ Rights and Antifraud Section, Outten & Golden represented the District in a wage theft lawsuit against national construction firm Power Design, Inc. and three co-defendants. Filed in May 2022, the lawsuit alleged Defendants unlawfully misclassified hundreds of construction workers as independent contractors, in order to deny them overtime wages and paid sick leave.
Under the terms of the settlement, Defendants will pay more than $1.7 million in restitution to more than 1,200 affected workers, as well as $1.2 million in civil penalties to the District. The agreement also includes broad injunctive relief designed to prevent Defendants from misclassifying their employees in the future.
As stated in OAG’s complaint, Power Design and its subcontractors misclassified electrical workers as independent contractors to deny them overtime and paid sick leave benefits that they’d be entitled to under the city’s laws if they were correctly classified as employees.
The electrical workers installed electrical systems, including electrical wiring, boxes, switches, outlets, and light fixtures throughout a building, OAG’s complaint said. They routinely worked more than 40 hours in a week without being paid overtime. In addition, the District determined that certain subcontractors failed to provide paid sick leave benefits to their workers.
In addition to requiring restitution for construction workers, the settlement mandates that Power Design adopt safeguards to prevent misclassification in the future by ensuring its subcontractors comply with employment laws, cease work with noncompliant subcontractors, and maintain a hotline for workers to report violations.
Framing the Issue
- Recovery for 1,200 electrical workers is the largest workers’ rights enforcement action in Washington, DC history.
- Workers were allegedly misclassified to evade overtime and paid sick leave obligations.
- Workers are frequently misclassified in the construction industry, which has fluctuating labor needs and often runs on short-term projects.
- If you’re misclassified as exempt, it could cost you. A 2023 study from the National Bureau of Economic Research found that employees who were dubiously labeled as managers lost an average of $3,000 per year.
- It’s helpful to keep track of your hours and pay, as well as your breaks and employment expenses. These records can help you spot pay mix-ups and provide context if you believe you’re missing wages or overtime.
