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Civil suit against private defense firm could gain class cert

By Henry Meier

War zone government contracts are some of the most competitive – and lucrative – opportunities for companies in the private security and defense contractor sector. But a pending federal class action shines a harsh light on the working conditions for the mostly ex- military personnel who signed on by the tens of thousands to join defense contractors engaged in counterterrorism operations overseas.

Plaintiff Karl Risinger and others say their former employer, Nevada-based private security firm SOC LLC – which operates mostly in Iraq – told recruits that for $65,000 a year they would work six 12-hour days a week while on duty in Iraq between 2006 and 2012. That turned out to be a gross underestimate as security team members routinely working grueling hours with no time off for months at a time, according to Risinger’s complaint. Risinger v. SOC LLC et al., CV12-63 (Nev. Dist. Ct., filed Jan. 13, 2012).

“Defendants had deliberately understaffed and underbid the job to such a degree that a readily ascertainable class of thousands of armed guards were forced to work months at a time without a day off, for in excess of 14 hours per day, and in extremely hazardous conditions, without any additional pay (indeed, not even the pay promised),” the plaintiffs’ motion for class certification reads. “And this reality was not revealed to the potential class members until after they had agreed to overseas employment and until after they had been physically transported to the war zone in Iraq.”

Few employment suits like these have been brought successfully, but Risinger’s lawyers at Early Sullivan Wright Gizer & McRae LLP say they are optimistic that the class could be certified, and trigger a Domino effect for the industry.

“If we prevail on our motion to certify a class and get farther along in these case, I wouldn’t be surprised if there were more suits,” said Scott E. Gizer, a partner at Early Sullivan.

SOC’s attorneys at Littler Mendelson PC did not immediately respond to request for comment.

With hundreds of billions of dollars doled out to defense contractor firms since the start of military action in Afghanistan and Iraq, federal prosecutors have aggressively policed malfeasance, landing large settlements for the U.S. government. But the prosecutors have primarily focused on fraud perpetrated against the government, rather than labor violations.

Often, bad conduct is tackled in qui tam or whistleblower lawsuits that seek to enjoin an action to the hammer of criminal charges by giving the government the opportunity to insert themselves into a case, according to white collar practitioners who do military contractor defense work. Just in the last month, the Department of Justice announced two significant settlements with defense contractors. Just last week, federal prosecutors from the Southern District said they’d reached an agreement with Glenn Defense Marine Asia, a contractor providing services to the U.S. Navy, that has the company forfeiting some $35 million dollars plus restitution to be determined at the sentencing of its CEO Leonard Glenn Francis, who pleaded guilty to conspiracy, briery and fraud charges.

These cases have cumulatively netted hundreds of millions – likely billions – of dollars in recouped money for the federal government that was gained through allegedly fraudulent means.

“It’s not a fact that there’s an uptick in defense contractor prosecutions, but there’s certainly aggressive investigations into the behavior of government contractors,” said Seth A. Rosenthal, a Venable LLP partner in Washington D.C. “The contracting community is definitely on notice about it.”

But while government prosecution of contractor wrongdoing has a strong track record of success, private, civil suits against these companies are less tested. Only last year a labor case involving Raytheon Co. was thrown out of court by a federal judge who said the plaintiffs did not have grounds to bring the suit.

That case, Robinson v. Raytheon Technical Services Co. LLC et al., CV13-12705 (Mass. Dist. Ct., filed Oct. 24, 2013), in the U.S. District Court for the District of Massachusetts is different than the SOC case, however, because it dealt strictly with overtime claims. The suit against SOC also includes multiple allegations of breach of contract, which is what has the case on the verge of class certification.

Gizer said the evidence his firm has seen in discovery shows SOC could not have been unaware of the environment and work schedule they were putting plaintiffs in because it was essentially contained in their bid proposal to the government.

“These guys represented to our clients that their position would be six days a week and 12 hours a day and from what we’ve seen SOC knew that not to be the case,” Gizer said. “The bid contracts they submitted show they could not have believed that.”