New Flyer settles fraud case

New Flyer America is one of the biggest government contractors for buses. The company was sued by a nonprofit, Jobs to Move America, for failing to fulfill a commitment to creating several dozen jobs above a specific pay rate. On the basis of this promise, New Flyer won a contract for hundreds of buses with the Los Angeles County Metropolitan Transportation Authority.

The complaint was filed on behalf of the transportation agency and the State of California. The company claimed that it would create more than 50 full-time positions at a facility in Ontario, California, more than 90 percent of which would pay at least $18.35 per hour. Jobs to Move America uncovered documentation that indicated that most workers were making $17 per hour or less early on in the contract. The lawsuit has also accused New Flyer of submitting false information to LA Metro about worker benefits. 

Although New Flyer has not admitted to any wrongdoings, it will pay $7 million to settle the case which is likely to be divided evenly between LA Metro and Jobs to Move America after legal expenses are deducted. The nonprofit also plans to distribute some money among the people employed by New Flyer in California. New Flyer will adopt measures to help ensure better compliance with the government norms in subsequent contracts, this includes but is not limited to, designating an official trained in tracking wages and benefits to maintain compliance. In recent decades, the government has given out many contracts because they provide a certain number of jobs or pay or benefits; however, it has never followed through. Thus the events of this case are very prominent.