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Government Contracts – Case Against Arbon Equipment Corporation

Outcome: $4 Million Settlement

Tycko & Zavareei LLP partners Jonathan Tycko and Andrea Gold represented a whistleblower who brought a qui tam lawsuit under the False Claims Act against defendants Arbon Equipment Corporation (Arbon) and Rite-Hite Holding Corporation (Rite-Hite). The lawsuit alleged that Arbon and Rite-Hite violated “prevailing wage laws,” including the federal Davis-Bacon Act and Service Contract Act and specific provisions of the California Labor Code. These prevailing wage laws require contractors and subcontractors working on certain types of government-funded projects to pay employees working on those projects specified hourly wages higher than minimum wage and often higher than pay for doing similar work on private projects. The action brought by a former Arbon employee alleged that Arbon and its parent company, Rite-Hite, failed to pay prevailing wages to employees who installed and serviced loading dock equipment at facilities owned by the federal or California state governments. According to the terms of a settlement, the Defendants paid a total of $4 million. They agreed to change their compensation practices and policies to assure compliance with federal and California prevailing wage laws.

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