(Dry)Walla Walla Contractor Ordered to Pay $1 Million in Workers’ Comp Premiums, Penalties

The Washington State Board of Industrial Insurance Appeals recently held Shawn A. Campbell and his spouse personally liable for unpaid premiums, interest and late penalties racked up by his drywall company, E & E Acoustics LLC.

A Washington State Department of Labor & Industries (L&I) investigation into the Walla Walla, Wash., company determined that Campbell significantly underreported the hours that his employees worked by failing to accurately report the size of the company’s drywall jobs from April 2007 through June 2009.

“This is a particularly egregious case of an employer cheating the legitimate businesses and employees who fund the workers’ comp system,” said Elizabeth Smith, assistant director of L&I Fraud Prevention & Labor Standards. “The board found that Mr. Campbell clearly knew what he was doing in his attempt to skip out on paying workers’ comp premiums.”

Campbell owes L&I more than $615,000 in premiums, $102,000 in late penalties and $296,000 in interest as of mid-March. The judgment is believed to be one of L&I’s largest-ever holding an employer personally liable for his company’s workers’ comp premiums, interest and penalties.

Campbell has appealed the ruling to Walla Walla Superior Court.

Employees Listed as Company Owners

In filings to the secretary of state, Campbell sometimes listed his employees as co-owners in his company to avoid paying workers’ comp premiums on them, the board decision said. However, in 2011, he failed to list any company officers, prompting the secretary of state to “administratively dissolve” the business. L&I assessed Campbell and his spouse personally for the company’s debts after it was no longer operating and the debts remained unpaid.

The board decision said Campbell’s “failure to pay workers’ compensation assessments was the result of an intentional, conscious and voluntary course of action, and thus was willful.” But the board did find Campbell is not personally liable for other fees and a record-keeping penalty, which had totaled nearly $39,000. 

Carpenters Union Played Major Role

The Pacific Northwest Regional Council of Carpenters played a major role in assisting L&I in the case. From 2009 to 2012, union representatives witnessed Campbell’s employees working on job sites in Central and Eastern Washington, and researched job bids and other public documents. The 2009 job sites included the Yakima Walmart Super Store, Toppenish High School, Union Gap Kindergarten and Yakima Wheatland Bank.

“Mr. Campbell created an unfair advantage through unlawful practices which harm the state, and more importantly, honest tax-paying construction contractors who contribute to a successful economy,” said Ben Basom, the union’s communications director. "We wish the E&E Acoustics case was an anomaly. Unfortunately, there are other unscrupulous contractors operating in similar ways.”