Virginia-based personnel and payroll business Littler Mendelson loses contract as part of US Department of Health and Human Services review of employment practices
The Washington DC-based firm that administers medical benefits for 9/11 survivors has lost its federal contract as part of an investigation of workplace safety issues.
After a short time on the job, Columbia was forced to hand over its expanded health benefits staff of about 200 to a former Littler Mendelson employee.
The termination of Columbia’s contract came amid a Department of Health and Human Services review of the firm’s employment practices. In an internal memo, HHS said Littler Mendelson had committed several infractions, including failing to follow national wage and hour regulations, violating workplace safety standards and making “financial and other financial impermissible contributions” to its employees’ retirement accounts.
But the health department also cited Littler Mendelson and Columbia for working together to skirt an internal ethics policy.
“A summary record review of incidents – with a view to better understanding of these incidents – reveal multiple instances of misconduct in which Littler Mendelson and Columbia apparently worked together, or cooperated and interwoven their work, in violation of the rules and regulations of [the department],” the department said in a memo released at the end of May.
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“The Department finds this behavior most troubling because [the department] considers the potential of a copycat, or other violators, arising from such a situation.”
Contract renewal was stalled as the federal agency investigated Littler Mendelson and Columbia’s actions. The investigation began in May 2017 and has been extended over the past year.
Littler Mendelson did not respond to an inquiry from the Guardian. Representatives for the department said that the company had not produced substantial changes to its management or practices since the notice was issued.
“Some troubling allegations have been reported to us from a former employee that the entire staff of the DFS [Direct Labor Force] Health care Center breached ethical standards,” the memo said. “There have been significant management changes at Littler Mendelson since the allegation and staff turnover has increased.
“The Department expects stronger compliance throughout the contract.”
The health department said it expects Littler Mendelson to review its own prior violations before restarting negotiations on its new six-year contract.
Those involved in the administration of 9/11 health care coverage disagree on the scope of the problems between the company and the federal department.
“I wasn’t aware of any infractions at all,” said Richard Loughran, a spokesperson for New York City’s health department, whose offices administer the program. “We were consulted on the process by which Columbia Mendelson was being terminated and we thought it was done fairly.”
Loughran pointed to the investigation’s focus on one specific finding, saying Columbia Mendelson had worked together to circumvent its own policy on payments for some workers.
“That policy was provided to us, that this facility was being asked to pay workers all the way down to minimum wage,” Loughran said. “And we told them it violated our wage and hour laws, and they were made to know that.”
But when asked whether Loughran’s description of how Columbia Mendelson and Littler Mendelson worked together was accurate, however, he would not elaborate.
“I’m not going to talk about that specific policy,” he said.