Laguna Beach Contractor Sued By State For Employee Rip-off

California Attorney General Edmund G. Brown Jr. reported today that his office is suing Interwall Development Systems, one of Southern California’s largest drywall contractors, for employing a “sophisticated and heartless scheme” to cheat hundreds of its employees out of at least $5 million in wages and benefits.

According to the AG “Interwall employed a sophisticated and heartless scheme, involving multiple businesses, to cheat its employees out of overtime and mandatory break periods.” “Today’s lawsuit sends a strong message that California will not tolerate companies that rip off their employees.” Brown said.

Brown’s lawsuit alleges that Interwall denied overtime pay, did not provide itemized wage statements, and did not allow its employees to take breaks during afternoon shifts. The company slashed its labor costs in an effort to underbid competition for at least 150 drywall installation projects in Los Angeles, San Bernardino, Riverside, Orange and San Diego Counties. The company maintains offices in Irvine and Laguna Beach.

The suit alleges Interwall denied rest breaks to employees during their afternoon shifts. And that Interwall employees worked Monday through Saturday, up to twelve hours per day, and received no overtime payments. Under California law, workers are entitled to ten minute breaks every four hours and overtime pay for working more than eight hours per day or 40 hours per week.

To avoid paying overtime, Interwall is accused of setting up a illegal complex business operation with subsidiary companies that paid employees, at regular pay rates, for the extra hours. In one case, an employee worked 68 hours for Interwall but was paid for 40 hours by Felts Construction Company and 28 hours by Cinco Construction. ANCCA Corporation dba N-U Enterprise was also involved in the various payment schemes.

Workers who labored for the drywall company suffered substantial monetary losses and are entitled to approximately $2.5 million for unpaid overtime and $2.5 million for working through mandatory breaks according to the claimplaint. The attorney general brings this lawsuit to halt the company’s illegal practices and get restitution for the workers who lost wages. Brown sued Interwall under Business & Professions Code, section 17200, which expressly prohibits unlawful or unfair business practices. Specifically, Attorney General Brown seeks:

• An injunction against Interwall to get the company to stop denying overtime and other benefits
• Restitution payments to the employees who lost thousands of dollars in wages
• Civil penalties of up to $2,500 for each violation of Business and Professions Code section 17200

The attorney general enforces California laws that require fair business practices in order to protect working men and women and ensure a level playing field where all businesses adhere to the same rules of conduct.

The Laguna Journal reported in December, Brown sued two janitorial companies, Excell Cleaning & Building Services and MO Restaurant Cleaning Services, for committing flagrant violations of California’s basic wage and hour laws. Brown also sued Brinas Corporation, a Southern California drywall contractor that was paying workers below minimum wage and also denying overtime wages. The Journal reported last year that Brown also sued PacifiStaff, a company that was teaching construction companies how to avoid providing state mandated workers’ compensation benefits.

The Attorney General has other ongoing investigations into employment, payroll and record-keeping practices of various businesses and construction companies across California.

The state’s lawsuit against Interwall is attached.

Attachments for this Release


Complaint [PDF 16 kb / 7 pg] Also see related article: California Attorney General has filed a civil claim against Pacifistaff and its Vice President Bruce Bowen.