Balance of Power

He spent a "couple hundred grand in legal fees" to avoid a fine and back wages totaling $100,000? Either Alan Penson is insane, he exaggerates, or WW got it's figures wrong.

Poor slant to this article. The guy lied to BOLI to begin with and now he's whining that it caught up with him. And WW is right there to defend the poor small businessman against "big government". Try this one again, without the Reagan-scented bias.

It is unbelievable to me that this could happen to a small business in Oregon.The State received the benefit of the lower bid. The State issued the exemption the contractor acted upon. The state should pay the difference if the state if the state made the mistake in issuing a ruling in error. It is highly doubtful that every firm in the state misrepresented what is involved in their work.

There is no reason that Penson should have to pay back wages to employees when BOLI told him he would not have to pay them prevailing wage. The state has no right to change it's mind and make a small company pay so much money in back wages. If the state decides now, that it's a prevailing wage job then he should have to start paying them now and not have to pay three years worth of back wages.

Lets look at a fact. The state has for many many years determined that the job was not manual labor. Now the state for one reason or another says otherwise and now wants to retroactively penalize. Something stinks here.

What stinks here is how hard these testing people have to work, to make any money. Look at any building and try and count the trips, up and down a ladder you would have to make, to properly adjust every vent in your building. How many professional suits do you see working on ladders all day?

Unbelievable! Q:Why would a contractor misrepresent what his employees did on a public works project? A: Pure and simple GREED. Alan Penson paid his employees as low as $10 per hour on so called Proffessional Work, work that other contractors pay as much as $50 per hour and in some cases even more. He sought a determination from BOLI that would exempt him from paying the Prevailed Rate that protects workers and contractors from predatory out-of-state or out of country (and in the case of Mr. Penson, in-state) contractors that come into an area to undercut the existing contractors by paying the workers less. His employees were right to question his greed and file a complaint. Not every firm in Oregon that performs this work misrepresented themselves or neglected to pay the Prevailing Wage.

Prevailing Wage does not protect anyone except the unions. Prevailing Wage is an out dated system originally designed to keep minority labor shops out of the trades. That is a fact. I have seen first hand over and over, because of my job the waste of tax payer money involved with Prevailing Wage jobs. The privet sector could do these jobs better and faster for less cost 99 out of 100 times without exploiting any workers. Prevailing Wage mentality is why the U.S. hardly manufactures anything at all anymore and jobs are going overseas. There is no reason on earth that a guy making $23 an hour on a site should have to be paid $37 an hour on a P.W. site.

Prevailing wage jobs have a set labor rate for each trade. This job is not a HVAC job they are not out pounding the tin. They are taking measurements and adjusting. How does BOLI think they can change their mind after setting a standard exemption through the industry? Makes you wonder if they will go after the other testing companies?

As the author correctly deduces, this is very clearly more about politics and one man's ambitions than about this specific ruling. If BOLI was interested in being fair it would not have applied the ruling retroactively. However, if it was interested in accuracy it would not have made this ruling at all. Trying to lump the test and measurement business in with the sheet metal trade simply because both are connected to HVAC systems is as silly as lumping welders in with electricians because welding machine run on electricity and both involve work with the hands. One job bears no resemblance whatsoever to the other in either activity or training.

This is an effort to force a square peg into a round hole at the expense of real people and should be opposed on principle. Unfortunately, the cost of opposing regulation is very high and anyone that doubts this has never been the one to foot the bill. Most people just knuckle under because it is easier and less expensive to do so.

Go for it Alan...who says you can't beat City Hall....or BOLI for that matter!

To make you pay back pay is just WRONG no matter how you look at it. If the State wants to make a new rule then fine.

If you had not paid prevaling wage on purpose then that's one thing. But it sounds as if they "BOLI" changed the guidelines changing the status of your trade without anyones knowledge.

Stick it to them!

i own a small hvac business, been in the industry since 1977-18years in the union local 16. This issue is driven by the union local 16, they have been losing work & members over the years & they are worried about there work so they try to punish the small business owner using there money & power. Balancing is NOT sheet metal work, i been around the industry & know. Alan is being treated unfairly. The new BOLI leader is a union man & is laying the unfair ground work to support the union workers only. The State should support small business, it comes back to them. None of the balancing firms we work with have been paying prevailing wage & rightly so. This is wrong, plain & simple.

This sure sounds like a bias artical . I am here visiting my sister and have worked in the industry for 15 plus years, an I travel all over the united states and this work is coverd in every other state bye prevaling wage. But mr pensen would like you to belive that this is not a phyiscal job and yet he pays mcjob wages.I am sure mr pensen is cheaper but at his workers expense not Mr Pensens. This work is coverd by union and non union apprenticships alike. So how is it that BOLI came to the idea that this isn't coverd work? Because mr pensen misrepresented the work and its classifcation. Willamette Weakly has a lot of there facts Wrong . I am curisous if Mr Pensen was able to get away with this in Washington where the law is Quite clear . Did he know the law an break it in Washington? Is this realy a poor small buisness or just another greedy man crying wolf

First off, here are a few innaccuracies in the WW article.

1. "...Dozen or so small firms..." ACTUALLY most HVAC companies balance some of their own work and pay prevailing wage.

2. "At issue is the “prevailing wage” rate overseen by BOLI that governs..." Union scale is usually higher then the state mandated 'prevailing wage'.

3. "But early this year, two of Penson’s employees filed prevailing-wage complaints ..."

Penson didn't rip off 2 employees, he ripped off 11 employees; that were also mentioned in a Washington wage & hour complaint - Which he had to pay back wages when he was caught.

4."...consists of six union members and six testing-company owners..." The commitee actually consists of: 4 Union Contractors, 2 Union Business Reps, 4 Non-Union Contractors, and 2 Blood Sucking Leech Lobbyists.

One thing missing from this article, Washington State recognizes TAB work as covered under the Sheet Metal classification, as do most of the United States and Canada.

So a bank robber robs banks for years because he thought, or was told it was ok, but he gets caught, should he only pay back the bank that he got caught on? Or the banks that he robs in the future? This is theft, no other way to look at it. If his employees 'stole' 100,000 dollars from him, they'd be in jail.

I have had some dealings with Accurate Balancing in the past. As a long time reader of Willamette Week I am very dissapointed that Nigel did not research this article better. Mr. Penson takes advantage of his employees. BOLI is just ensuring this will not happen again. If Mr. Penson paid his employees a fair wage this wouldn't even be an issue. He has grown rich off of the back of his people illegally and now he has to pay them what is owed. As for balancing not being HVAC work, that is absurd, it is HVAC mechanics that install, maintain and test the systems. Mr. Penson, shame on you, pay your people what they are owed, and continue to pay them into the future. A fair days work for a fair days pay!

The bottom line is BOLI gave a specific ruling in 2003 about this issue. BOLI concluded that the work was not governed by prevailing wage as it was not manual labor. BOLI reached this conclusion and notified Mr. Penson in a letter. This was not Mr. Penson's judgment call, it was BOLI's. He acted based upon the verdict they reached about the nature of the work. Now BOLI wants to go back and essentially change the verdict and have it take effect for the past 4 years? hmmmm... If BOLI thought this was manual labor, they should have decided that in 2003. If BOLI changed their minds, it should take effect when they changed their minds, not 4 years ago.

"...Penson paid his employees based on a ruling in a 2003 letter from the Oregon Bureau of Labor and Industries, which administers state employment laws.

Now, BOLI says that crucial 4-year-old ruling is invalid and that Penson must pay two ex-employees three years’ back wages and penalties totaling nearly $100,000..."

"...In 2003, Penson asked BOLI if he should be paying his employees prevailing wage on public sector work.

“Testing and balancing of HVAC controls, following the installation of the HVAC system, is not manual or physical in nature and is considered professional and, therefore, not subject to” the prevailing wage rate requirements, responded BOLI’s Dana Woodward in a January 2003 letter..."

The facts are clearly stated. Documentation shows proof that Mr.Penson was exempt. BOLI is wrong, and anyone alse who can't read between the lines and see what is really going on here should take another look.

and in response to 'Richard' and his bank robbery scenario... Did you read the article my friend? It wasn't as if Mr. Penson was doing something wrong in hopes of not getting caught.

Alan Penson has written permission that his business is considered a profession, and not subject to prevailing wage. Thus, he acted accordingly. It is in no way theft. Read the article and get your facts straight before making false accusations.

He was trying to avoid paying prevailing wage to employees working on Washington State jobs as well. Only after Washington made it absolutely clear that he had to pay did he finally do so. If we had not filed these complaints he would have continued to break the law in Washington, to say nothing of the Oregon case.

At no point did Washington ever indicate that air balancing was not part of the sheet-metal worker classification, and yet he neglected to pay us. If the question occurred to Alan back in 2003, when I started working at ABA, then he must have certainly known about Washington's stance.

And now I'm hearing from tommy tak (who is or was an employee at ABA) that he's asking current employees to pay him the wages Washington awarded them. If that is true, where does the case for Alan's "victimization" stand?

BOLI never made a ruling that exempted manual labor. They told Penson that based on his discription of the work that it would probably not be covered. BOLI later found that Penson had LIED to them and overturned that decision. Why would you reward a LIAR who cheated all of us not just his employees. He shouldn't only be fined he should be in JAIL.

I do however disagree with Richard, this is not theft, it is FRAUD. Well on second thought Richard, it is both.

Joaquin -

It's not as if they just took Penson's word about the work he was doing. They investigated, decided it was a profession and not subject to prevailing wage. BOLI made the ruling, Penson follwed the ruling. Theft nor fraud is the issue in this case. Penson didn't lie - BOLI went back on their ruling, and failed to inform Penson. Boli is clearly at fault.

Yes, the way the article is titled seems misleading to me. This issue seems to have subtleties and the business owner doesn't seem to have been extremely clear to the agency either.... The article seems a bit biased to me.

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First off there are tin benders in Portland that can and do dynamically balance air and water systems. There is a reason why TAB contractors all over the country are signatory to the local sheetmetal unions. We have the only technician certification program that I would be willing to bet most of the "balancers" working for these contracters would fail miserably at. It was Union sheet metal contractors and the Sheetmetal Workers Union that were instrumental in establishing NEBB, and when NEBB decided they would certify anyone, set up the Testing, Adjusting, and Balancing Bureau of the National Energy Management Institute to oversee the certification of technicians, supervisors and contractors. In fact Mr. Whetton of Pacific Coast Balancing got his start in the discipline as a sheetmetal worker in the LA local. If Chris considers our training a joke, I wonder what he considers the training given by our non union competetors? I know that I would consider it non existant. I also would like to know what his qualifications are to make these pronouncements or is he one of those ex-union members who skills were not up to keeping a job in the union sector of the sheetmetal industry and is therefore disgruntled.

Taking Penson's word is exactly what they did. Dana Woodward is 3 foot nothing on crutches and never "field investigated" anything. It was never investigated until Gerhart showed up at Madras Prison and watched the work being performed. It was a LIE, a three year old lie, but a lie none the less. Now he wants us to feel sorry for him. It's funny that Nigel Jaqass didnt interview the employees that made the complaint, it would be enlightening to hear from them.

Joaquin -

you have free will. If you were so unhappy with your job, and you honestly thought you were being cheated on wages, than why did it take you so long to leave? Accurate Balancing not only employed you but gave you a well paying job when you couldn't have gotten one anywhere else. Not only that, but you where like family to him. He treated you like a son, he helped you out countless times. I'm thoroughly disgusted.

Its so obvious that the writer of this article is slanted in favor of Alan Penson. This is a man who misrepresented him self to BOLI and the work he was doing to get the desired classification. Now that he has been caught stealing from his workers an breaking state laws not just in Oregon but Washington as well, he wants a pass for tricking BOLI into giving him a unfair advantage over other contractors who pay higher , Yes that right higher then prevailing wage in the area. What Mr Penson wants is to commit fraud then blame BOLI for not catching him at it sooner. He would like to pay his workers 10 dollars and hour with no health care or 401 k. I would like to see the state get the best deal possible for work on its schools and public buildings but not at the cost of living wage jobs. Steal a little and they throw you in jail steal a lot and they make you a king. As for Willamette Week such poor taste and bias in journalism I have never seen. I guess the truth is what ever sells the most papers.

Dan Gardner BOLI Commission is hardly an unbiased leader in my opinion. He is a former electrical union official and will do whatever is required to support the union's goals. Alan Penson DID NOT misrepresent himself to BOLI, he in good faith asked for their ruling or determination as to the classification of his employees as it related to Prevailing Wage Rates. They gave him their ruling, he followed this state agency's ruling, duh, doesn't get much simpler than that. Would love to see some of the individuals posting in this blog go into business in Oregon and deal with much of the abuse of power many of us in small business deal with on a constant basis, your ideas and tone would change dramatically in short order. "I said you didn't have to classify them this way, before I said you did, now go out of business based on we the state changing our minds, we are accountable to no one", State of Oregon at your service, or is is peril?

Oh really? Read his letter? It specifically says "we do not do any physical labor we do white collar work" hmmmm thats not misleading is it. Alan is such a great guy, asking his employees to give back the money when he finally has to pay what he cheated them out of.

I know Alan, and the two workers. He broke the law under the "Davis-Bacon Act"...The Davis-Bacon Act of 1931 is a United States federal law which established the requirement for paying prevailing wages on public works projects. All federal government construction contracts, and most contracts for federally assisted construction over $2,000, must include provisions for paying workers on-site no less than the locally prevailing wages and benefits paid on similar project.Prevailing wage laws in the U.S. date back as far as 1891, when on the state level, Kansas instituted this first such law. Forty-one states followed suit in the years to come. These state prevailing wage laws were the fruit of the "Progressive Era," which instituted statutes such as child labor laws, public schools and worker compensation insurance. Screw you Alan, and "ABA", for breaking the law and cheating your workers. Man, I was there during the Madras job. I am father in law to one of the employees. Take the bread out of children's mouths bastard. The law is the law. Opinions can't change that.

The facts of this case are really not as simple as "BOLI made a determination and now they are going back on it"

In addition to investigating wage claims and prevailing wage complaints, BOLI answers technical questions regarding the prevailing wage rate laws as a courtesy to the workers and employers of Oregon. The staff members who field these calls work at the clerical support level; it is not their job to conduct an investigation or go out in the field, but rather to respond to the questions being asked to the best of their ability. It is not uncommon for a caller to "shop around" a question by calling multiple employees in the agency, omitting critical information and refining their question just enough until they get the answer they want to hear. Letters written in answer to queries about work classification routinely contain the qualifying statement "based on your description of the work performed" in order to make it clear that should it be discovered that the description of work has been misrepresented, BOLI reserves the right to reclassify the work.

Mr. Penson is neither being required to pay back wages because of anyone's political ambition nor because BOLI suddenly decided to persecute him. His employees filed a complaint. The complaint was assigned to an investigator. The investigator determined after observing the testing and balancing workers in the field , that the workers spent a significant amount of time engaging in physical labor. Other prevailing wage states list testing and balancing HVAC systems as one of the duties of a Sheet Metal Worker. Coincidentally, Mr. Penson was required to pay back wages to his employees who worked in the state of Washington, even though the state clearly identifies workers who test and balance HVAC systems as Sheet Metal Workers. If the letter written in 2003 had determined that the workers were subject to prevailing wage rate laws, it is difficult to imagine that Mr. Penson would have honored it; he clearly ignored the state of Washington's determination and intentionally violated the law.

So, what has BOLI said about every other instance of “air balancing” on prevailing wage projects? Surely Mr. Pensen’s company is not the only company to have done this work on prevailing wage projects. I would think there would be dozens of instances where a determination would be necessary. I understand from another reader that if a union HVAC company does the installation they may also do the air balancing and would then pay the union wage, which often is synonymous with the prevailing wage but what about all the other open shop air balancing companies? Would they each have had to apply for a wage determination or would BOLI have relied on Mr. Pensen’s description for the industry as a whole? If BOLI had determined that air balancing was a prevailing wage job on any other prevailing wage projects shouldn’t they have let folks know of their new determination asap? If each company has to apply for their own wage determination, what are the odds they all lied? What about every other trade? Seems like air balancing isn’t a new trade (don’t all buildings have HVAC systems and require this work?) and that it is or should be BOLI’s responsibility to investigate/research the activity thoroughly and make a determination that covers all air balancing company’s. Why wouldn’t they have investigated the first time, or first several times, an air balancing company asked for a determination to truly find out if the task is manual enough to warrant the prevailing wage requirement? Seems like this was a BOLI error, BOLI laziness or a BOLI change of direction.

He's not getting punished for being a small business. He's getting punished for putting under-experianced, under-trained workers in a job site and paying them substandard wages. About half of what other companies charge, and a quarter of what prevailing wage recommends. Further more his company has on many occasions encouraged out right forgery of their paper work and has covered up mis-use of company funds for trips to casino's and such.

I'm one of the employees mentioned in the article. The other one has also posted in this comments section, and I know other employees (past or current) are posting here as well. Those people will probably know who I am.

This article is pretty biased to make Alan Penson appear to be the victim.

Mike May has a financial stake in ABA, as well. Some employees have said he owns half the company, others as little as 10 or 20 percent, but the fact is he does own some part of it.

Myself and the other employee who initiated BOLI's investigation were let go soon after. Whether these events are related is impossible to know. What I do know is that I was promoted and given a raise after working personally with Mr. Penson in late 2006, the idea ostensibly being for him to evaluate my performance. He told me I was doing a great job and thanked me for my hard work. I was given a company vehicle and paired with another employee to serve as my "helper" or "second", in the company parlance. The next month I was let go. A friend of mine spoke with Alan's wife sometime after that. She allegedly told my friend (who worked with Alan's wife for years) that Alan decided I was "woefully underskilled" to perform the job I had just been promoted into.

As for the determination BOLI has made to "re-classify" air balancers, Washington State's law is as clear as can be on this -- I was already paid my back wages from jobsites in Washington. I believe Alan has misrepresented the job we did to Oregon's government. The job absolutely involves manual labor, and after Mr. Taeubel observed employees performing their job, he had no choice but to report the facts.

ABA employees: Am I to understand that Alan has "secretly" asked current employees to repay their back wages that Washington's DOLI awarded them?

Also, check your timecards, guys. ABA has/had a system where employees reported "half-time" for driving time. If we were in the truck for 4 hours to and from a jobsite for the day (not uncommon), we were to report 2 hours (or half time) on the card. Since many of us were making $12/hour or less, this means we were being paid less than Oregon minimum wage while driving.

If all of you x-employees are such skilled workers, and were so disatisfied with your wages, why didn't you just go find another better paying job -balancing or otherwise? This attitude is a good illustration of the problems employers face finding quality employees and is one reason why many states (12, I believe) have repealed the Davis-Bacon Act.

What makes you think we didn't?

One thing to note is that ABA didn't spend a lot of time worrying about the qualifications of its employees. As Ted mentioned above, some employees didn't even do their jobs correctly (if at all), and one in particular was too busy embezzling company funds and crashing company vehicles while he was drunk. The helper they placed me with after my promotion was totally unreliable, and would disappear every time I turned around. If you're only going to pay employees half of what competitors pay, you get what you pay for.

Myself and the other employee who filed the complaints were the only ones who were let go to my knowledge -- all the other employees quit to find better jobs... but their bad attitude prevailed and they are now filing their own complaints. There must be something to these complaints if half the people I used to work with are thinking about filing them.

Finally, Davis-Bacon is a federal law, individual states cannot repeal it. You're thinking of "Little Davis-Bacon" laws.

Only a total moron ever says says "why didn't you just go find another better paying job?"

The point of prevailing wage is that every company bidding against each other will have an equal and level playing field and that this should result in the contract being awarded to the lowest bidder with the most efficient and best organized business operation with the fairest price. Insuring that the price paid and the quality of the work performed is the best value to the taxpayers who are paying for the work. The contracts should not be going to the company that comes up with the most creative, devious,underhanded and efficient method of scamming or cheating the system. When somebody gets caught they should pay the maximum penalty available to serve as a lesson to others and to show the taxpayers that the Government that is supposed to be protecting and serving them is doing the job they were elected to do.

KM, names are not what they appear on an online blog. Impersonation and slander are also illegal. Assumption and name calling will not resolve this greasy situation. Shall I suggest that no one assume conclusions as to identitiy of any writer on this forum. I'd bet you'd be wrong, as are your facts.

KM writes on Dec 7th, 2007 6:57pmComment 32

Joaquin -

you have free will. If you were so unhappy with your job, and you honestly thought you were being cheated on wages, than why did it take you so long to leave? Accurate Balancing not only employed you but gave you a well paying job when you couldn't have gotten one anywhere else. Not only that, but you where like family to him. He treated you like a son, he helped you out countless times. I'm thoroughly disgusted."