LUMBERYARDS

Labor Department investigating home builders

BY Brae Canlen

The federal government has begun an in-depth investigation of possible wage infractions in the residential construction industry, according to an article in the Wall Street Journal. 

So far, government officials have sent out broad demands for records on wages paid and hours worked by direct employees of home builders, as well as those working for their contractors. Recipients of the letters include PulteGroup, Lennar, D.R. Horton and KB Home, according to people familiar with the matter. A Labor Department spokeswoman confirmed the investigation but declined to discuss details.

The letter instructed the home builders to immediately turn over the names, addresses, Social Security numbers, pay rates and hours worked for all employees over the past two years. It asked the names of all contractors hired in the past year. The letter didn’t allege any specific violations of law.

Nancy Leppink, acting director of the labor department’s wage and hour division, told the New York Times that the government was focusing on the residential construction industry because it had so many vulnerable immigrant workers and because some construction contractors had been misclassifying workers as independent contractors to circumvent wage laws.

Executives in the residential construction industry called the investigation yet another example of overaggressive regulation in the Obama administration. The Leading Builders of America, an association of 19 production home builders, said the inquiry was overly broad and “especially troubling given that no issues have been identified to warrant an investigation,” according to the Times.

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Drywall distributor offers $53 million settlement

BY By Brae Canlen

Banner Supply Co., the Miami-based drywall distributor, has agreed to pay $53 million to settle a class-action lawsuit claiming it sold defective drywall imported from China. The settlement offer, which is still subject to court approval, will be deposited into an escrow account for plaintiffs who claim their houses need remedial work after being built with toxic drywall.

Banner and its insurers deny any wrongdoing, pointing out that the company never manufactured the drywall it sold or delivered. 

The settlement was reached before in the New Orleans court of U.S. District Judge Eldon Fallon, where many of the Chinese drywall cases have been consolidated. 

A final approval hearing is set for Feb. 3, 2012, in New Orleans.

 

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ENAP names president, CEO

BY Brae Canlen

The board of directors of ENAP, an LBM co-op based in New Windsor, N.Y., has named Stephen Sallah as president and CEO.

Sallah, the organization’s chief financial officer since 2008, has served as ENAP’s acting CEO since the departure of Russ Kennedy at the end of 2010. Prior to his service with ENAP, Sallah  spent 16 years at IBM as division controller and in other marketing and operational roles. He started his career with the U.S. Navy and served for nine years in active duty as a submarine officer and is a retired Commander in the Naval Reserves. 

In a telephone interview with Home Channel News, Sallah said the buying group, which ranked in 11th place on the HCN Top 100 Distributors Scoreboard, is in the midst of formulating its next growth strategy.

“We picked up eight new members in this year alone,” Sallah said. Although the board also did an outside search for a new CEO, Sallah believes he was chosen because ENAP’s employees have been so successful. 

“That’s what I told the employees yesterday,” Sallah said. “I’m only in this job because they’re doing so well.”

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