Glenn O. Hawbaker’s 3-month suspension from PennDOT was lifted early. Here’s what happened
Glenn O. Hawbaker Inc., a large local construction contractor accused of millions in wage theft, can again bid on new state highway projects after a court ruled PennDOT’s temporary suspension was unconstitutional.
On April 19, PennDOT suspended the State College-based company for at least three months from bidding on or participating in contracts for new state highway projects. But, on June 30, the Commonwealth Court ruled that such a suspension violated due process, mainly because it came before a PennDOT hearing. (PennDOT argued, because it scheduled a hearing after the suspension, due process was still maintained.)
Judge Patricia A. McCullough wrote that it was “troubling” PennDOT had ignored similar due process concerns from a court case nearly 20 years ago.
PennDOT did not directly respond when asked by the Centre Daily Times if it planned to change its suspension procedure after the ruling, or if it would pursue another suspension in the future if Hawbaker was found guilty of wage theft.
“We cannot comment on the pending criminal or civil matters,” PennDOT spokesperson Erin Waters-Trasatt said Tuesday. “PennDOT continues to review the Commonwealth Court opinion and will determine appropriate next steps.”
In a written statement, the Hawbaker company said it was satisfied with the ruling: “We’re pleased the court granted our request, and ... we are eager to resume competition for new PennDOT projects.”
According to Hawbaker’s Steve Taylor, vice president of sales and estimating, the suspension led to the company losing out on at least four projects where its bids were rejected. The suspension also prevented it from participating in at least four PennDOT bid lettings that amounted to 28 different jobs.
The preliminary injunction against PennDOT ultimately has no bearing on the state attorney general’s case. The next court date is scheduled for Aug. 3 in Centre County.
The company is still facing four criminal counts of theft — no individuals were charged — after being accused in April of stealing more than $20 million from workers’ fringe benefits, including retirement and health insurance, from 2015 to 2018. Prosecutors said the business stole wages from its employees over three decades by using money intended for prevailing wage employees’ retirement funds to instead contribute to retirement accounts for all Hawbaker employees, including the owners and executives.
State Attorney General Josh Shapiro called it “a massive, unprecedented fraud” in an April press conference. His office said Tuesday it had no comment on the PennDOT matter.
Judge McCullough chided PennDOT for its handling of the suspension in her June 30 ruling, which was not initially filed online but which the CDT obtained Monday. In those documents, PennDOT acknowledged it did not conduct its own investigation and suspended Hawbaker based on criminal allegations made by the state attorney general.
The judge pointed out that allegations cannot serve as evidence for guilt, no matter PennDOT’s own suspension-related policies.
“DOT’s argument before this Court is, essentially, that we can do this because we say we can,” McCullough wrote. “Simply because an agency’s regulation ‘permits’ certain action does not mean that action is constitutional.”
Hawbaker, one of the top employers in Centre County, averages about $285 million in work annually, 60% of which is public work. It employs about 1,000 people.
The company has pleaded “not guilty” to the criminal charges, noting it has fully cooperated since learning of the attorney general’s investigation in 2018. Hawbaker previously stated it believes it has “always acted in accordance with all state and federal laws.”
A former employee sued in May, meaning Hawbaker could also be forced to contend with a class-action lawsuit.
CDT reporter Bret Pallotto contributed to this report
This story was originally published July 21, 2021 at 6:00 AM.
