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California public awarding bodies that are obliged to have a construction Labor Compliance Program (LCP) will not be able to contract out that function to a company affiliated with Douglas E. Barnhart, Inc. After issuing an order to revoke approval of Barnhart Labor Compliance Services, Inc. (BLCS) as a third-party LCP, the State of California’s Department of Industrial Relations (DIR) entered into a Stipulations and Tolling Agreement to “allow for an orderly winding up of business by BLCS leading to the voluntary termination of its [LCP] in lieu of revocation.” Such termination shall occur no later than February 19, 2008.
In the case leading to the recent Agreement, DIR found that BLCS, without justification, “failed … to monitor compliance with the requirements of the Labor Code … or to take appropriate enforcement action for the violations of which it became cognizant.” The DIR also found that “BLCS workers who participated in making enforcement decisions, including decisions not to enforce, had a direct conflict of interest when making decisions that affected the interests of [Douglas E. Barnhart Inc.].”
Two complaints, one filed by San Joaquin County-based Carpenters Local Union 25 and one filed by the southern California-based Carpenters/Contractors Compliance Committee, had prompted the DIR to audit BLCS’s compliance monitoring and enforcement. The facts uncovered by the State in response to Local 25’s complaint prompted the revocation decision.
BLCS had discovered “plain evidence of misclassified Labor Ready workers who had been contracted for by [Douglas E. Barnhart, Inc.]” on a Lodi Unified School District project. BLCS, however, “failed to get the error corrected for nine months or restitution paid for 15 months” and did not impose any penalties on Labor Ready.
The DIR’s decision stated that BLCS’s repeated insistence that Local 25’s complaint was part of a campaign of intimidation against Douglas E. Barnhart, Inc. undercut its defense. “An LCP’s duty is to enforce prevailing wage requirements and not to pick sides in a dispute between a union and a contractor.”
“The efforts to shift the focus away from its own actions and toward Barnhart’s dispute with Local 25 suggest that BLCS itself was more concerned about protecting the contractor Barnhart, than protecting the rights of the affected Labor Ready workers …”
According to the Stipulations and Tolling Agreement, BLCS is to work with contracting agencies to transfer LCP responsibilities to other, approved LCPs. The Agreement provides that “[n]either BLCS nor any successor entity shall apply or reapply for approval as an LCP prior to February 19, 2009.” That time period, the earlier “Decision” stated, is commensurate with the length of time that Labor Ready workers were deprived of their proper wages.
Read the Decision 
Read the post-decision Agreement
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