AG files lawsuit against subcontractor for obstructing wage theft investigation

Attorney General Keith Ellison announced on Tuesday his office filed suit against the owner of a construction company for obstructing a large wage theft investigation by state regulators.

Ellison said Leo Pimentel, the owner of Property Maintenance & Construction, threatened workers and refused to turn over employment records. The state Department of Labor and Industry began investigating Pimentel more than a year ago after workers filed complaints with assistance from the carpenters’ union.

Workers say Pimentel owes them more than $100,000 in unpaid wages for their work on projects across the state, including new apartments at Viking Lakes, a sprawling mixed-used development built by the Wilf family, which owns the Minnesota Vikings.

The Reformer first reported on the workers’ allegations in May, but state officials had not confirmed the existence of the investigation until Tuesday’s announcement of the lawsuit filed in Hennepin County District Court.

“(This lawsuit) is about reassuring all Minnesota workers, no matter who you are or where you’re from, that you, too, have rights, and our office will protect your rights,” Ellison said during a news conference.

According to the complaint filed by Ellison’s office, Pimentel has hindered the yearlong investigation by threatening workers and telling them to lie to state investigators. One of Pimentel’s managers told a worker that everyone who spoke to DLI investigators “were going to pay,” according to the complaint.

Pimentel also told workers he was cutting their hours because of the workers who spoke to state regulators, according to the complaint.

In the lawsuit, Ellison’s office says Pimentel failed to keep employment records like timesheets, pay stubs, tax documents and contact information for all of his employees as required by law. Pimentel has also refused to turn over documents to state investigators, further hindering their investigation.

Ellison’s office is asking a judge to declare PMC’s behavior unlawful and order the company to produce the records demanded by DLI.

A lawyer for Pimentel did not respond to an email seeking comment.

In May, Pimentel wrote in an email to the Reformer that he was “unaware of any current investigation” even though DLI visited the Viking Lakes job site and met with a PMC employee in October 2021, according to the complaint filed by Ellison’s office.

In addition to wage theft, DLI is investigating Pimentel for misclassifying workers as independent contractors to avoid paying workers’ compensation premiums and payroll taxes. Workers say Pimentel told them they needed to create their own LLCs in order to receive overtime wages, according to the complaint.

Many of the workers are undocumented immigrants who do not speak English. Some of the workers say Pimentel pressured them to get fraudulent working papers or use fake Social Security numbers so he could pay them “on the books,” according to the complaint.

The Viking Lakes development, which includes the Vikings’ new training facility and team headquarters, is one of 17 construction projects named in the lawsuit where workers allege they were cheated out of wages by PMC.

A representative of MV Ventures, the development arm of the Minnesota Vikings and general contractor on Viking Lakes, said all subcontractors on its project were required to “sign agreements ensuring fair labor practices for workers at the site and requiring strict compliance with all federal and state labor, benefit, workers’ compensation and wage laws.”

If the claims are substantiated, the company said “the subcontractors will have breached their contracts with MV Ventures Construction and will be held accountable.” MV Ventures said PMC has not been awarded more work on Viking Lakes.

Allegations of labor abuses at Viking Lakes go beyond misclassification and wage theft. Earlier this month, the Reformer reported that a worker for Absolute Drywall was charged with raping a cleaning worker on the Viking Lakes project. DLI is also investigating that company for wage theft, according to workers.

Reached for comment about that story, Gary Gleason, vice president of construction for MV Ventures, said that they had not been contacted by state officials regarding any labor abuses at the Viking Lakes development.

Gleason said on Tuesday he didn’t have additional comment on the attorney general’s lawsuit and reiterated that MV Ventures “fully supports” an investigation and will cooperate if asked.

Ellison declined to say if state investigators have reached out to MV Ventures about the complaints of labor abuses at Viking Lakes, saying they aren’t able to share details about an ongoing investigation beyond what’s in the lawsuit.

MV Ventures is not named as a defendant in the lawsuit. Nor is Advantage Siding, the company that subcontracted the work to PMC after being contracted by MV Ventures.

The carpenters’ union, the North Central States Regional Council of Carpenters, has played a key role in uncovering labor abuses by PMC at Viking Lakes and other job sites.

After MV Ventures hired non-union contractors for work on the apartments at Viking Lakes, union leaders urged the company to allow independent investigators to monitor for labor abuses.

MV Ventures declined independent monitoring on its job site, but the carpenters’ union surreptitiously spoke to workers through the construction process and helped them bring their complaints to state regulators.

In response to the lawsuit filed by Ellison’s office, the carpenters’ union called for all parties involved to be held accountable, including MV Ventures.

“MV Ventures’ response, or rather their lack of response addressing these unpaid workers is unacceptable. They hired subcontractors knowing that they had a history of wrongdoing, yet MV Ventures continues to ignore taking accountability for their construction site and to the people who work there,” said Adam Duininck, director of government affairs with the carpenters’ union. “Now it’s time for MV Ventures to stand up and make the situation right.”

Wage theft is so common in construction, labor experts say it amounts to a business model that makes it all but impossible for reputable contractors to stay in business. Nearly a quarter of construction workers in Minnesota — about 30,000 people — are misclassified or paid off the books, according to an estimate by the Midwest Economic Policy Institute.

Ellison created a new wage theft unit shortly after taking office in 2019, and said he’s made the crime a focus of his office.

In 2019, the state Legislature also passed one of the toughest wage theft laws in the country, making it a felony to steal more than $1,000 in wages.

However, no one has been convicted of wage theft in Minnesota.

The state has won large civil settlements, which is what DLI’s investigation could lead to — DLI isn’t able to conduct criminal investigations.

“Every Minnesotan should be able to take home every dollar that they earn, period,” Ellison said.

Due to incorrect information provided by the Attorney General’s Office, this story previously misstated that no one had been charged with felony wage theft. At the time of publication, one person had been charged but was not convicted.