A Las Vegas-based painting and specialty coatings contractor agreed to pay $3.6 million in back wages and damages to its employees as part of a settlement in a federal lawsuit brought by the U.S. Dept. of Labor. Officials say this is not the first time the company has faced punishment for illegal pay practices.

The payment represents money owed to 593 employees of Unforgettable Coatings Inc. after the company illegally paid straight time for overtime hours worked and hid the theft by falsifying payroll records, Labor Dept. officials announced Jan. 30. The company works on commercial and multifamily residential projects in Nevada, Arizona, Idaho and Utah. 

Labor Dept. investigators found that Unforgettable Coatings and its owner, Cory Summerhays, created pay stubs showing lower hourly rates than what it had agreed to pay workers in order to avoid paying them overtime rates. The company also omitted some workers from pay records and made some work weekends with no pay, DOL officials say. 

Investigators say they discovered the wage theft after expanding an earlier probe into Unforgettable Coatings. The Dept. of Labor had previously cited the company for wage theft in 2013, and recovered about $47,000 for 21 Utah workers. The second investigation covered 2016 through 2020.

Summerhays threatened workers for speaking to investigators, Labor Dept. officials say. He also cut hours for employees he believed cooperated with the investigation, cut all workers’ wages by 30% and told workers that talking to investigators could have what DOL describes as “immigration consequences.” 

Jessica Looman, DOL’s principal deputy wage and hour administrator, calls the wage theft “egregious and willful.”

“The employer denied nearly 600 workers in four states their hard-earned overtime pay, attempted to hide their greed and illegal actions, and retaliated against workers who asked why they were being cheated,” Looman said in a statement. 

During the course of litigation between the Dept. of Labor and Unforgettable Coatings, the department obtained a federal court order barring the company and Summerhays from retaliating, intimidating or discriminating against any current or former employees for cooperating. DOL says the retaliation continued anyway, and the company fired an employee who complained about its pay practices. 

After the Labor Dept. sought to have Summerhays and his company held in contempt for the alleged retaliation, they agreed to settle the case before the judge could rule on the issue. Attorneys representing the company and its owner did not immediately respond to inquiries from ENR.

The $3.6-million consent judgment ordered by U.S. District Court Judge Kent Dawson in Las Vegas includes about $1.8 million in back wages and another $1.8 million in liquidated damages, plus a $50,000 civil penalty and about $18,000 in interest.