Connecticut is seeking $6.1 million in damages and penalties on behalf of 2,068 fast-food workers who the state says are owed wages from the private operator of state-owned service plazas on I-95, I-395 and Route 15.
In a lawsuit filed in Hartford Superior Court, the state Department of Labor accuses Project Service LLC of underpaying workers by $2.7 million from Aug. 29, 2017 through Sept. 20, 2019.
The suit announced Friday by Attorney General William Tong seeks double damages and $731,700 in civil penalties. It is the largest wage-theft lawsuit since Tong took office in 2019.
“This is all about people who are just trying to make it through the day, put food on their table, provide for their families, pay the rent. That’s what this is about,” Tong said.
At issue is whether a formula for calculating the standard wage that must be paid by private contractors offering maintenance, property management or food service in state buildings applies to the state’s 23 service plazas.
“It’s more than a contract dispute,” Tong said. “It is a violation of our state’s wage and hour laws, in addition to being a breach of the contract.”
At the urging of SEIU 32BJ, the union that represents many low-wage service workers, the reach of the standard wage law was expanded and clarified in 2009, the same year the state signed a 35-year deal with Project Service LLC to modernize and operate 23 service plazas.
Among other things, the law requires state contractors to provide either fringe benefits or pay a 30% surcharge.
Project Service did not respond to a call for comment, but Tong said they have been contesting the applicability of the law since the Department of Labor first confronted the company.
“They think it’s ambiguous, I guess, under a pretty clear contract,” Tong said. “And they think it’s ambiguous as to whether it applies to subcontractors, which is not ambiguous.”
The fast-food tenants at the plazas are considered subcontractors, he said.
Thomas Wydra, the director of wage and workplace standards at the state DOL, said the state opened an investigation more than three years ago, auditing records at fast food franchisees doing business at the plazas.
“And we knew at the outset it was going to be large in terms of scope and magnitude, when you account for the thousands of employees that were potentially going to be involved in our audit. It was a painstaking process,” Wydra said.
SEIU has been trying to organize the plaza workers since 2018, educating them about the state standard wage law for private contractors who do certain work in state buildings.
“We knew they weren’t getting what was in the standard wage law based on the classification for food service workers,” said Rochelle Palache, the vice president of SEIU 32BJ.
Under the law, the commissioner of labor sets the hourly rate for all job classes based on the rates in the Federal Register of Wage Determinations, plus a 30% surcharge for the cost of health and retirement benefits.
Robert Thomas, a shift leader at Dunkin’ restaurants on the Merritt/Wilbur Cross parkways, said SEIU informed him that his hourly wage should have been at least $18.21, not the $16 he was getting.
“I felt like I was being played,” he said.
The workers with wage-theft claims were employed at Taco Bell, Chipotle, Dunkin’ and 17 Subway restaurants, but the contract with Project Service makes it responsible for compliance with the standard wage.
The redevelopment of the plazas came under a private-public partnership that made construction costs the responsibility of Project Service in return for exclusive rights to sell fuel and food on the busy highways.
The contract requires the company to pay the DOT based on the number of gallons of gas sold, plus the gross receipts for other products. The state currently gets 2 cents on every gallon plus 3% of gross receipts. The numbers increase over time.
Whatever the receipts, it is required to make minimum annual payments that are $2.5 million this year and will increase by $500,000 every five years, topping out at $4.5 million in 2044.
Signing the contract was Paul D. Landino, then the president and CEO of Project Service. Centerplan Construction, a company owned by his brother, former state Rep. Robert Landino, did the construction.
State records now lists the chief executive as Trevor Moore of Sleepy Hollow, N.Y.
Applegreen, an Irish company that owns service stations in Ireland and the U.S., purchased a 40% stake in the company in 2019.
The Department of Labor had opened a similar investigation involving McDonald’s restaurants on the plazas. Palache, the SEIU vice president, said the company settled for nearly $1 million in back wages and is now paying the standard wage.
Tong said the lawsuit against Project Service covers only two years, but the company still is not paying the standard wage or the 30% benefit surcharge.