Sheet metal laborer Manuel Hernandez has been working on the $1.6 billion LBJ Hospital expansion project for months, but he’s not being paid the “prevailing wage” required by law for his trade, his attorney told the Harris Health Board of Trustees on Wednesday.
Hernandez is one of more than 100 sheet metal workers claiming they’ve been underpaid by subcontractors at the northeast Houston job site. Insulation workers and painters also say they are not being properly compensated or that medical benefits have been withheld. Some have said they are only paid in cash and were never issued insurance cards; others say the certified payroll records that have been turned into the county don’t match their pay stubs.
The workers were planning to speak out at Wednesday’s Harris Health board meeting but they didn’t show up for fear of retaliation; instead, they were represented by union leaders. Attorney Kathryn Mecredy is representing Hernandez, but the others don’t have lawyers and some say they’ve been threatened with termination if they speak up.
The claims of wage theft and withheld benefits are directed at subcontractors; however, the union leaders say Harris Health should be accountable for ensuring that the contract terms are followed. The LBJ Hospital is the “marquee project” funded by a 2023 bond issue approved by Harris County voters and slated for completion in 2028.
After hearing from five union representatives and Mecredy on Wednesday morning, the Harris Health board adjourned into executive session. When trustees returned, Harris Health officials reported that just one complaint is currently being investigated regarding a prevailing wage complaint and another has been resolved.
Harris Health president and CEO Dr. Esmaeil Porsa noted that 75 percent of the workers on the LBJ construction site live in Harris County and are potential patients at the hospital. He said he expects excellence from hospital administrators and staff and wants that standard to extend to “everybody who engages with us as experts to ensure that they are keeping the promises that we are making to our community.”
“I know that recently there have been discussions about prevailing wages and the issues that have been identified, and I just want to reiterate my commitment, and I know that the board shares this commitment, that we expect excellence,” he said. “Specifically for the purpose of ensuring that we manage the prevailing wages correctly and to the full extent of our obligation to the people.”
The day before the board meeting, union leaders held a press conference at Hutcheson Park across Interstate 610 from the job site and aired their grievances to a small group of reporters. Following the press conference, Harris Health issued a statement saying it is “committed to integrity, accountability and respect for the skilled tradespeople supporting the expansion project” and has hired a third-party auditor, HPM, to review wage-related claims that have been raised.
“Harris Health requires contractors and subcontractors on the project to comply with prevailing wage requirements and all applicable labor laws as part of this critical community investment,” the statement reads. “Harris Health takes all claims seriously and is following statutory requirements to review and respond appropriately, while continuing to exercise oversight to promote lawful and responsible use of public funds.”
Amy Zachmeyer, executive director at New Economy for Working Houston, said after Wednesday’s board meeting that she found the Harris Health response “unimpressive and inaccurate,” noting that trustees said there had only been two formal complaints when they’d just heard from three separate trade unions that multiple workers had lodged grievances.
“When we talk about these workers — the glaziers, the sheet metal workers, the insulators and others — we are talking about community members, parents, neighbors, family and friends,” she said. “These people are going to a job, working hard, using their hard-earned skills, to build our community’s much-needed medical facilities. They are facing underpayment, intimidation, retaliation, gaslighting and other abuses.”
“They know what is happening to them isn’t right but they have bills to pay and they have children who have birthdays, field trips, Christmases and all of the things we have to pay for in our day-to-day lives,” she added. “When they push back on these abuses, they are told to deal with it or get fired.”
Irresponsible contractors are being awarded the jobs, rather than union-accredited companies, because they’re submitting the lowest bids, Zachmeyer said. She asked that the contractors accused of wrongdoing be barred from doing business with Harris Health in the future and face criminal consequences if deemed necessary.
The workers are accusing subcontractors with McCorvey Sheet Metal, Phoenix Insulation and Chaparral Insulation, among others, of shorting laborers on their hours, paying less than the required minimum wage for their trade and withholding benefits. McCorvey did not respond to requests for comment. An attorney from Chaparral Insulation said the company has received no complaints and wasn’t aware of an issue until they read about the union leaders’ press conference on Tuesday.
Jared Grein, president of Phoenix Insulation Company, said in an email to the Houston Press on Wednesday that his business “has never been accused of or involved in wage theft of any kind.”
“We have not been notified of any such activity or complaints related to our employees,” he said. “We have our payroll records and other documents that prove we are not involved in the wrongdoing referenced in your article. This is not hard to prove as we have been paying full wage rates.”
At least one complaint has been filed with the county’s Department of Economic Equity and Opportunity, but union leaders said Wednesday they didn’t think investigators were provided comprehensive information. Additionally, Mecredy said that Patrick Casey, Harris Health’s senior vice president of facilities construction and systems engineering, found that wages were improperly withheld from her client but again, she said Harris Health did not have all the records.
“I don’t believe that the board, from what I can tell, had the full data,” she said. “The certified payroll record covers only a scope in time that’s finite, and Mr. Hernandez’s paycheck stubs showed he worked well outside the scope of the payroll records. I believe that Patrick Casey only had access to approximately 50 percent of the work that Mr. Hernandez completed.”
“I believe this is a canary in a coal mine,” she added. “There are 130 Manuel Hernandezes out there that have been shortchanged. I hope that having an opportunity to look at an actual human being who’s been very impacted by the wages that have been stolen from him will make an impact and this investigation will extend to all the [workers].”
Hany Khalil, executive director of Texas Gulf Coast Area Labor Federation, led Tuesday’s press conference and said that workers have been coming forward since October, claiming they’ve been collectively deprived of at least $489,000 in lost wages and benefits. When the workers questioned their paychecks, some were fired or, as alleged by those working for McCorvey Sheet Metal, forced to sign letters saying the matter was resolved, Khalil said.
Khalil outlined the accusations before the Harris Health board on Wednesday and said the trustees promised when they took the project before voters three years ago that a fair and lawful process would be employed. “That promise is being broken by several unscrupulous contractors on this project,” he said.
“The hardworking men and women building this hospital, and taxpayers, deserve to know, how did contractors like these get awarded contracts on a publicly funded project with clear labor standards in place? Why has oversight been so poor? When will these workers be made whole? How will these issues be prevented going forward?”
Rafael Rivas of the steelworkers union SMART Local 54 said 130 of 179 sheet metal workers were underpaid just in medical benefits. A DEEO investigation found that about $489,000 was owed to 130 workers, but it was not a comprehensive audit, Rivas said. Disparities exist among paychecks of workers doing the same job, who are supposed to be paid the same “prevailing wage” based on their trade, which, for steelworkers, is $43.55 per hour.
Lacy Wolf, business manager of Heat & Frost Insulators Local 22, and Rico Sanchez of SMART Local 54 also addressed the board on Wednesday.
Harris Health officials broke ground on the LBJ Hospital in May 2024, championing the project as an opportunity to expand and modernize Harris Health, the public hospital system serving Harris County’s uninsured and underinsured residents. The new 12-story hospital with a Level 1 trauma center is expected to open in late 2028.
