The Watchdog Bites

San Diego CityBEAT, 7/21/04 |

Worker-advocacy group fights city’s janitorial contractor

By Consuelo Gilman’s account, the Gaslamp Quarter’s public restrooms are the city’s worst. At night, the 24-hour courtesy station—as it’s called in the janitorial industry—is frequented by drunks and junkies, and fights aren’t uncommon. But after nine years, Gilman’s hardened to the dicey, late-night traffic. What she can’t acclimate to is her fluctuating employment status.

In May of this year, Jani-King took over the contract to clean the all-hours Gaslamp Quarter and civic center public restrooms from Eugene Carter Enterprises. Formerly the city’s largest janitorial contractor, Eugene Carter was dismissed by the city from this and other city contracts. In addition to more serious violations, Eugene Carter had trouble paying employees on time.

When the 35-year-old commercial cleaning giant Jani-King took control of the contract on a temporary basis, Gilman and her coworkers stayed on at the restrooms. But the janitors didn’t immediately become Jani-King employees. Instead, their work status was initially classified as 1099, or independent contractors.

Sound confusing? It was to Gilman and her dozen coworkers. “I just filled out the form,” she says with a smile from inside the Gaslamp courtesy station vestibule. “Just filled out the form so I could get paid.”

The 1099 form was necessary because Jani-King had to pick up the contracts on such short notice, says the company’s regional director, Randy Frazine.

“We found out on a Friday at 2 in the afternoon that we had to take over those stations at 5 that night,” says Frazine. “So, obviously, there wasn’t enough time to do background checks and all that stuff. We had to do 1099s, but all the workers have been paid for every hour of work since we took over.”

So, what’s the problem? The restrooms are being cleaned, Gilman and her coworkers are being paid on time and a janitorial contractor with a history of troubles has been replaced.

The problem, according to the staff at the San Diego-based Center on Policy Initiatives (CPI), is that janitors can’t legally be independent contractors. “Essentially, janitors aren’t running a business, so they can’t be independent contactors,” says attorney Rebecca Smith of the National Employment Law Project and a consultant with CPI. “Classifying employees as 1099s is a classic scheme that employers use to avoid compliance with all sorts of labor laws.”

Often used as a cost-cutting measure in some industries, misclassifying workers means companies don’t need to pay workers’ compensation, insurance, unemployment and health benefits, says Smith. “If you are in a low-wage, low-skill occupation, you are nearly certain to be found an employee and not in business for yourself,” she says. “To be an independent contractor, you have to have an opportunity for profit or loss…. It’s not enough for your employer to say, ‘Here’s a 1099 form, now you’re in business.’”

CPI staff drafted a memo describing this and other alleged violations, and this month sent it to Walter Rossman, who’s in charge of city contracts. The memo is part of CPI’s campaign to bring the city in line with responsible contractor policies (and part of a larger campaign to pass a living-wage ordinance in San Diego). Unlike cities such as Los Angeles, San Diego doesn’t have contractor-responsibility programs in place to safeguard against unscrupulous companies bidding for city contracts.

Outraged at the memo, Jani-King International President Jerry Crawford flew in from the company’s Dallas headquarters last Thursday to personally meet with Rossmann and Frazine. Crawford says the outcome of the meeting was good and that he’s allayed any concerns raised by CPI’s memo.

Rossmann agrees the meeting was productive, but says he is still waiting to meet with CPI staff and receive an analysis of the memo’s allegations from the city attorney’s office. Rossmann is also waiting to receive a response to CPI’s memo in writing from Jani-King. “I’m not drawing any conclusions yet,” he says. “I need to wait and collect all the information.”

While Crawford returned to Dallas on good terms with the city, he’s angry with CPI at what he sees as a vilification of his company and its policies. “Our general council is going to send a letter to this advocacy group [CPI] who has put these lies and discrepancies in this memo, asking for a retraction,” he says. “If we don’t get that, we’ll take legal action in order to make them understand that we won’t have anybody going around making false assumptions about how we run our business.”

Frazine says CPI is wrong if it thinks classifying janitors as independent contractors is Jani-King policy. The city’s emergency contracting policy forced the company to make the workers temporary independent contractors, he says. Frazine added that the janitors were always covered by workers’ compensation liability insurance—something CPI questions—and that they enjoy all the benefits Jani-King offers its employees.

But CPI spokesperson Paul Karr doesn’t buy it. “Unfortunate circumstance or not, abiding by the law shouldn’t be set aside because they only have a little bit of time to pick up a job,” says Karr. “If they can’t do the job and abide by the law, they shouldn’t be doing the job in the first place. This isn’t just a private company doing its own thing—this is a private company doing work for our city with our tax dollars.”

When Jani-King stepped in and picked up the contract, Frazine thought his company was doing the city a favor. He didn’t expect to be attacked for filling in—nor did he expect to be filling in for this long. “We’re still on a month-to-month contract, which is causing a lot of complications,” he says. “If the city… says that our contract ends Aug. 1, then we have all of our employees standing in the unemployment line trying to draw unemployment on us, we’re in trouble.”

For her part, Gilman says she’s grateful CPI is working to find good contractors and secure better wages and benefits for her. Then she adds with a smile that she’s happier with Jani-King than she was with Eugene Carter.

“My checks are on time and they aren’t bouncing,” she says. “That’s good.”