3 staffing agencies, client, accused of conspiring to keep workers' wages low

CHICAGO – An Elgin custom wood and metal manufacturer and three temporary staffing agencies were named in a lawsuit alleging they illegally conspired to fix temporary employees' wages below market and not to solicit or hire each other's employees, according to a complaint filed by Illinois Attorney General Kwame Raoul.

The lawsuit, which was filed in Cook County Circuit Court July 29, seeks an injunction to stop the illegal agreements as well as civil penalties and damages.

“This action challenges unlawful agreements among three temporary staffing agencies, facilitated by a common client, to refuse to solicit or hire each other’s employees and to fix the wages paid to their employees,” the lawsuit stated. “These unlawful agreements have harmed competition in the recruiting and hiring of temporary workers and have harmed temporary workers in Illinois by interfering with their ability to seek better employment opportunities and better wages and other terms of employment.”

The complaint names as defendants Elite Staffing Inc., also known as Elite Labor Services, with headquarters at 1400 W. Hubbard St., Chicago; Metro Staff, Inc., at 300 S. McLean Blvd. and 1601 Weld Road in Elgin; Midway Staffing, Inc., with headquarters at 2137 Euclid Ave.,Berwyn and offices in Elgin and Aurora; and their client, Colony Display LLC, 2531 Technology Drive, Elgin with facilities at 2500 Galvin Drive, Elgin.

A spokesperson for Colony Display provided a statement via email: “As an Elgin-based company, we have proudly put thousands of people to work from our community since opening our doors more than three decades ago. We look forward to presenting the steps we have taken to pay our workers a competitive wage and treat them fairly for the great work they do.”

Messages seeking comment were left with the three staffing companies were not immediately returned.

According to the 20-page complaint, at the request of Colony, Elite, Metro and Midway agreed not to compete with respect to the wages paid to temporary workers assigned to Colony, which has 75 to 100 full time employees and between 200 and 1,000 temporary workers at any given time.

Wages for temporary workers at Colony were set at $10, according to the complaint, but it does not state what the wages should have been had there not been a conspiracy.

'Illegal conspiracy'

Starting in March 2018, instead of competing with each other, the three staffing agencies agreed to fix the wages paid to their temporary employees to a below-market wage requested by Colony, the lawsuit stated.

“The purpose of this illegal conspiracy was to restrict any competition between the agency defendants that would benefit temporary employees assigned to Colony in terms of wages or other conditions or terms of employment,” according to the complaint.

The conspiracy among competitors, facilitated by a common client are violations of antitrust laws, as is the conspiracy to fix wages, the lawsuit stated.

“Defendants’ no-poach and wage-fixing conspiracies suppressed the wages of the temporary workers employed by the agency defendants and staffed at Colony and prevented workers who were unhappy with their treatment and conditions of employment from switching among the agency defendants,” according to the lawsuit.

“Defendants enforced their conspiracy by communicating with each other through Colony,” according to the complaint.

"If one of the agency defendants acted against the conspiracy by hiring the temporary employees of another agency defendant, a complaint would be made to Colony," according to the complaint. "Colony would then communicate the issue to all of the agency defendants and ensure that the conspiracy was enforced.”

Email evidence

Internal emails and emails exchanged between Colony and the staffing agencies provided evidence of the conspiracy, according to the complaint.

In one email detailed in the complaint, “Metro Staff’s Vice President of Operations told Colony and Elite: ‘I hate to sound like a broken record, but as long as we continue paying minimum wage, we will continue having these problems . . . Not that paying a little more would cure all, but it would definitely draw more people and at least it would put Colony on an equal playing field with most other companies. Right now, we are at a disadvantage. There is too much work out there offering better pay.’”

“If Colony and the agency defendants had not entered into a wage-fixing agreement, Metro Staff could have offered a higher hourly rate to potential temporary workers to fulfill Colony’s staffing needs,” according to the complaint.

No-poach agreements allow employers to take advantage of low-wage workers by trapping them in low-paying jobs and limiting their opportunities for advancement, Raoul stated in a news release about the lawsuit.

“We must do everything in our power to protect our workforce in Illinois. I will continue to work to ensure that companies like Elite, Metro Staff, Midway and Colony that take advantage of workers are held accountable,” Raoul stated in the release.

A hearing on the complaint is scheduled for Dec. 3 at the Richard J. Daley Center, 50 W. Washington St., Chicago.

Workers who believe their rights have been violated to call his Workplace Rights Hotline at 844-740-5076 or by visiting the website, www.illinoisattorneygeneral.gov.

This lawsuit is the result of collaboration between Raoul’s Antitrust Bureau and the Workplace Rights Bureau.

Bureau Chief Blake Harrop and Senior Assistant Attorney General Elizabeth Maxeiner are handling the case for the Antitrust Bureau. Bureau Chief Alvar Ayala and Assistant Attorney General Samantha Kronk are handing the case for the Workplace Rights Bureau.

Portions of the complaint were redacted based on defendants’ assertions that certain information uncovered during the investigation must remain confidential, the lawsuit stated.

The state disagreed and will file to have the court rule to allow the complaint to be unredacted.