Clarkstown Sued For Misleading Environmental Company On Prevailing Wages for $1 Million

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West Nyack’s Away Environmental Inc. Claims Clarkstown Misled Company, Which Has Been Ordered By NYS DOL To Make Good On Shortfalls

By Tina Traster

A West Nyack-based environmental company and its CEO has filed a lawsuit in Rockland County Supreme Court against the Town of Clarkstown over a twelve-year-old dispute that could cost the plaintiff nearly $1 million in its own battle with the Department of Labor.

Away Environmental Inc., is seeking reimbursement or indemnification from Clarkstown for its underpayment of wages to employees working on a public project, saying it followed the town’s guidance on “prevailing wages.”

“The client is trying to be made whole,” said Scott Paton, attorney for Away. “The town told the client what the prevailing rate was to be, the client paid that rate, but the Department of Labor has determined it to have been wrong and has imposed significant damages as a result.”

Under New York State Law, contractors and subcontractors must pay the prevailing wage plus benefits to all workers under a public work contract. The prevailing wage is the pay rate set by law for work on public projects. This applies to all laborers, workers and mechanics employed under a public work contract.

New York law issues wage schedules on a county-by-county basis, based on the work performed. The lawsuit raises the importance of municipalities accurately portraying the prevailing wage, and defining the work clearly.

The Town of Clarkstown said, “No Comment” in response to inquiries about the suit.

In September 2010, the town and Away entered into an agreement to perform cleaning and environmental remediation services for a town-owned property. Because the work took place on public property, it was necessary that all labor be paid under “a prevailing wage” requirement for building service work.

The town told Away that by law, Away was required to pay its workers $30.18 per hour, which it did. However, after the work was completed, the New York State Department of Labor opened an investigation into the wages paid by Away, and found that Away underpaid its workers almost $326,000, and imposed a 10 percent penalty and 16 percent interest on unpaid wages, dating back more than ten years.

“The town had the obligation to accurately represent to AEI the applicable prevailing wage requirements for work that was being requested by the town that was owned by the town,” the suit says.

The Department of Labor is demanding a total of $326,000 in wages, $316,000 in interest and a civil penalty of roughly $65,000 from Away and its CEO, Yojana Costello. In turn, Away claims that Clarkstown provided inaccurate information on the prevailing wage, and that the company “reasonably relied on Clarkstown’s representation, and that they have suffered damages based on that reasonable reliance.”

In October 2021, Away noticed the town of its intent to sue. The suit claims the town has not paid the damages. The suit says that the company’s damages are anticipated to exceed $1 million, though that amount has yet to be determined. Interest continues to accrue.

Away is still in business but does not have any active clients, added Paton.