After a 2013 investigation by the U.S. Department of Labor that recovered $47,393 from a Nevada paint and specialty coatings contractor and its owner whose illegal pay practices denied 21 Utah workers overtime wages, a reasonable employer might try to avoid repeating a bad and costly decision.
Cory Summerhays, owner of Unforgettable Coatings Inc. – a Las Vegas company operating in Arizona, Idaho, Nevada and Utah – chose instead to double down, and then some.
In January 2023, the department obtained a consent judgment in federal court in Las Vegas requiring the company and its owner to pay more than $3.6 million in back wages, liquidated damages, interest and penalties to 593 employees in Arizona, Idaho, Nevada and Utah.
The action follows a five-month investigation by the department’s Wage and Hour Division that found the employer falsified pay records to deprive workers of earned overtime wages and then intimidated workers who questioned the company’s pay practices. These are all violations of the Fair Labor Standards Act.
In September 2019, the division expanded its probe to include a second joint investigation between its offices in Las Vegas and Phoenix that covered the company’s operations from September 2016 until December 2020. The investigation included cooperation with the local district council of the International Union of Painters and Allied Trades and ARRIBA Las Vegas Workers Center, both of which provided useful information about workers and their employment conditions.
Investigators found Unforgettable Coatings Inc. and Summerhays illegally paid straight time for all hours worked including hours over 40 in a workweek, falsified payroll records by omitting some workers, and required some workers to volunteer their time to work on weekends without pay.
The division also determined Summerhays deliberately hid the company’s theft of overtime by falsifying pay records. The employer hired employees to work between $12 and $25 an hour, but – among other things –created pay stubs showing a lower hourly rate to avoid paying the workers overtime based on their agreed-upon rate. Through the employer’s complex scheme, employees were ultimately paid straight time for all hours worked.
Investigators also learned Summerhays threatened workers and stated that talking to the department could involve immigration consequences. He reduced all workers’ wages by 30 percent and cut employees’ hours if he believed they cooperated with the investigation. In April 2020 – in the course of the litigation – the department’s Office of the Solicitor obtained a federal court order forbidding Summerhays and Unforgettable Coatings from retaliating, intimidating or discriminating against current or former employees who cooperated with investigators. Despite that order, department investigators later discovered that Unforgettable Coatings continued to retaliate against workers and fired an employee for complaining about the company’s pay practices. As a result, the Solicitor’s Office sought to hold Unforgettable Coatings and Summerhays in contempt, but Unforgettable Coatings and Summerhays settled before the court ruled on the matter.
“The wage theft committed by Cory Summerhays and Unforgettable Coatings Inc. was 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,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “To their credit, several brave employees came forward to exercise their rights. We hope the outcome of this case gives other workers the confidence to come forward and report wage theft to the Wage and Hour Division.”
The division’s investigations determined Unforgettable Coatings Inc. and Summerhays owed the affected workers in four states a total of $1,809,249 in back wages and an equal amount in liquidated damages. The department also assessed the employer $50,000 in civil money penalties due to the willful nature of its violations, and an additional $18,092 in interest.
“After stealing their employees’ wages, Cory Summerhays and Unforgettable Coatings repeatedly tried to silence their workers and undermine the department’s efforts to vindicate these workers’ rights,” said Solicitor of Labor Seema Nanda. “The Solicitor’s Office is committed to taking every legal step necessary to empower workers to come forward. We will swiftly obtain court orders against vindictive employers, oppose intimidating inquiries into workers’ irrelevant immigration status, and defend workers’ ability to speak directly to the department and through their trusted community partners.”
Litigation by the department revealed Summerhays had established another company – Final Touch Painting in Idaho – where the employer also falsified payroll records by representing hourly wages as bonus pay. Back wages and liquidated damages calculated in this case were included in the consent judgment.
Founded in 2007, Unforgettable Coatings Inc. is a commercial and residential roof coating and painting contractor based in Las Vegas with locations in several states including Nevada, Arizona, Utah and Idaho. In June 2020, Inc. Magazine included the company on its annual list of “Best Workplaces.”
Lisa Smith, SPHR, SCP
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