Union Files Suit Against Horton

By ANDREA JARES Star-Telegram Staff Writer

A carpenters union in New Jersey has sued Fort Worth-based D.R. Horton for what it calls a scheme to cut costs by using undocumented workers at lower wages and avoiding paying taxes and benefits for them.

The New Jersey Regional Council of Carpenters, along with a subcontractor that used union employees, filed the lawsuit Wednesday in New Jersey Superior Court. The suit alleges that the country's largest home builder violated the state's Construction Industry Independent Contractor Act, as well as the federal Racketeer Influenced and Corrupt Organizations Act.

"They've engaged in what has really been an illegal hiring scheme," said Albert Kroll, attorney for the union. Kroll, who is New Jersey's former labor commissioner, said D.R. Horton's activities are "the most blatant abuse of laws I have seen in a long time."

D.R. Horton officials declined to comment, saying it was the company's policy not to comment on pending litigation.

The suit alleges that in April 2006, the home builder dismissed subcontractor Brookside Construction, a union shop that had been hired to build an age-restricted condominium for D.R. Horton in New Jersey. The workers were replaced by a nonunion subcontractor that hired "a large number of undocumented workers for the express purpose of depressing wages, managing costs, and avoiding payment of benefits and taxes," the suit states.

The workers were classified as independent contractors, not employees, the suit alleges.

The union's lawsuit seeks compensatory damages, or back wages and the contractor's fees, and triple the actual damages, as well as an injunction to end the alleged practice.

The union and the contractor are also seeking their legal fees.

The suit claims that the hiring practices allowed the home builder to reduce labor costs by not paying unemployment and workers' compensation insurance, health insurance, Social Security taxes and federal, state and local taxes, according to the lawsuit.

The 50-page filing outlines the claims of nine confidential witnesses. Among its claims: Horton officials tried to get rid of the union to save money; the new subcontractor hired many undocumented workers; and the subcontractor paid workers in cash to avoid reporting overtime.

D.R. Horton is also being challenged in other states over alleged unpaid bonuses.

On Wednesday, a former vice president in D.R. Horton's Charlotte, N.C., sales division sued the home builder, claiming that it fired him without paying more than $60,000 in bonuses.

The company denies that Richard Schwartz is owed the money, according to a court filing.

On Feb. 26, a former project manager for D.R. Horton's operations in Pennsylvania sued, claiming that he was fired after repeatedly asking about a bonus not paid from 2005. Thomas Huggins' suit is seeking more than $75,000. Attorneys for D.R. Horton have not filed a response.