DECEMBER 22, 2011

CONTACT:  Terry Nelson, 651-224-5480

FOR IMMEDIATE RELEASE

On November 9, 2011, representatives of the International Union of Painters and Allied Trades (IUPAT) District Council 82 and RTL Construction of Shakopee reached a significant settlement on allegations that RTL Construction failed to pay employee benefits according to contract.  RTL President Michael Larson and employee Jeffrey Rensch were also named in the lawsuit.

“We are pleased that we were able to settle this matter for our members without undergoing a lengthy and costly trial,” said Terry Nelson, business manager/secretary-treasurer of the IUPAT District Council 82, one of the unions that represents the RTL employees.  “We look forward to putting this dispute behind us and working with RTL, and the rest of our employer partners, on creating more jobs for the working men and women of Minnesota.”

In November 2009, the IUPAT and the trustees of the organization’s apprenticeship, pension and health care funds filed claims in federal court that RTL Construction, Larson, and Rensch underreported hours worked by RTL’s employees with the intent to pay less in associated fringe benefits.

The agreed-upon public disclosure from the settlement provides: “(a) Defendants deny any and all liability associated with the claims made by the Trustees in this Federal Court Action; (b) the Trustees’ claims, inclusive of attorneys’ fees and costs, were resolved to the Parties’ mutual satisfaction, which included Defendants’ payment of monetary compensation to the Trustees in excess of One Million Dollars; and (c) the Parties look forward to working together in the future.”

IUPAT BMST Terry Nelson is available for further comment and interview. Contact him at 651‐224‐5480.

The International Union of Painters and Allied Trades represents over 3,500 men and women in the Finishing Trades of drywall finishing, painting, glazing, sign and display in Minnesota and North Dakota. Learn more at www.iupat82.org and www.IUPAT.org.

The U.S. Department of Labor wants employers to take note of what happened this week to the owner and president of Franklin Drywall in Little Canada.

Philip Joseph Franklin, 49, of Leesburg, Va., was sentenced Thursday in St. Paul to two years in a federal prison for providing a false statement to two labor union pension and benefit funds as part of his scheme to underpay employees for overtime and short the union for pension and benefit contributions.

Federal prosecutors also asked the court to order Franklin to pay nearly $3.3 million in restitution. U.S. District Judge Donovan Frank said he’d consider the request and rule later.

“This sentencing shows that the Labor Department is committed to ensuring that justice is served for those who steal from their workers,” James Purcell, acting regional director of the U.S. Department of Labor’s Employee Benefits Security Administration office in Kansas City, said in a statement. “We continue to aggressively investigate those who steal from plan participants and their beneficiaries through our Prevailing Wage Regional Project.”

Franklin admitted in a plea agreement to filing false reports with Minnesota Carpenters Pension and Benefit Funds and the Painters and Allied Trades District Council No. 82 Pension and Benefit Funds.

He had his employees falsify time sheets and reports to the union pension and benefit funds, under-reporting the hours they worked.

“To evade reporting and paying fringe benefits for the number of hours actually worked, Franklin directed that employees who worked more than 40 hours (a) be paid for excess hours on a separate paycheck at the straight hourly rate, rather than the overtime rate; or (b) be paid for excess hours at the straight hourly rate on paychecks marked as ‘other pay,’” the U.S. attorney’s office said Friday in a news release about the case.

The Labor Department investigated the case, which was prosecuted by Assistant U.S. Attorney Tim Rank, the new head of federal white collar crime prosecutions in Minnesota.

Terry Nelson, business manager/secretary-treasurer of the Painters and Allied Trades Council that represents many of the underpaid employees, said in a statement that Franklin’s conviction “sends a strong message that being in hard times does not justify outright stealing from those who work for you.”

“This is a company owner who counted on these men being too afraid to lose their jobs, when jobs are scarce right now, to say anything about this wage theft. What Mr. Franklin didn’t seem to realize is that these men are represented by a union that isn’t afraid to take any company on when its members’ rights are violated,” Nelson said.

Dan Browning • 612-673-4493

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