Court rules Glenn O. Hawbaker can continue bidding on PennDOT projects

A Pennsylvania appeals court ruled last week that a State College-based contractor who pleaded without contest paying theft charges can continue to bid on national highway projects.

On January 19, the Commonwealth Court granted Glenn O. Hawbaker Inc. a request for a preliminary injunction restraining the Pennsylvania Department of Transportation from excluding the company from the bidding process.

PennDOT was seeking to bar Hawbaker, one of the state’s largest highway contractors, from bidding on projects for three years.

“Glenn O. Hawbaker, Inc. is satisfied with the decision of the Court of the Commonwealth of Pennsylvania and looks forward to continuing to serve both PennDOT and private clients,” a company spokesperson said Wednesday.

The ruling marked a second legal victory for the company against PennDOT’s attempts to suspend Hawbaker from the bidding. PennDOT temporarily suspended Hawbaker from bidding on projects in April 2021, after the company was accused by state prosecutors with four counts of larceny by failure to dispose of required funds, but it was lifted in june when the Commonwealth Court ruled that the department breached due process by implementing the ban before a hearing was scheduled.

Following the new decision, a PennDOT spokesperson said the department is “reviewing the decision and considering its options.”

After a three-year investigation by the Pennsylvania attorney general’s office, Hawbaker was charged with theft for violating Pennsylvania’s state wage law and the federal Davis-Bacon Act, laws that require companies hired to public projects to pay workers a fixed rate determined by the state. and federal agencies.

Attorney General Josh Shapiro accused the company of “massive and unprecedented fraud” that caused workers to retire with less money in their retirement accounts than was owed to them or continue working beyond their planned retirement to make up for the shortfall.

The company was accused of using money intended for existing employee retirement funds to contribute to the retirement accounts of all Hawbaker employees, including executives, and “essentially taking from a group of workers to pay the rest of the business,” Shapiro said. year.

Prosecutors also said the company took funds that should have gone to existing employee health and welfare benefits and used them to subsidize the cost of a self-funded health insurance plan that covers all the employees.

The company did not contest the charges in August and agreed to pay $20.7 million in restitution, in what is believed to be the largest criminal case and wage settlement in US history.

Hawbaker also agreed to pay the $240,000 cost for a business monitor during his five-year trial period.

A plea of ​​nolo contendere, or no contest, means that the defendant does not admit guilt but agrees to accept the penalties.

Hawbaker cooperated with the investigation and began to address its effective pay practices in 2019, according to the attorney general’s office.

After the plea, PennDOT asked a special hearing administrator to suspend Hawbaker from bidding on state projects, which the company appealed.

In granting the injunction against the ban, Judge Patricia McCullough wrote that the Department of Labor and Industry oversees existing wages law cases and questioned whether other agencies could impose penalties.

The 70-year-old family business is one of Pennsylvania’s largest construction contractors, and between 2003 and 2018 it secured $1.7 billion in contracts from PennDOT alone.

Vincent Corso of the Center County Gazette contributed to this report

Laura J. Boyer