Farfield Company: False Certified Payroll on a Federally Funded Rail Project

The U.S. District Court for the Eastern District of Pennsylvania ordered Farfield Company to pay $1,055,320 for false certified payroll on a federally funded rail project after finding that workers classified as groundmen and laborers had performed higher-paid lineman work. The weekly payrolls said the classifications matched the work. The people who pulled the wire and laid the conduit could tell a different story, and their testimony helped establish what the company’s records left unclear.

Farfield, a construction company based in Lititz, Pennsylvania, worked on SEPTA’s track-and-signal improvements between Wayne Junction and Glenside in the Philadelphia area. Work ran from 2002 through 2007. SEPTA paid Farfield, and the Federal Transit Administration reimbursed part of the cost. The court’s account of the case describes how the electrical workers’ union brought a False Claims Act case over the payroll certifications.

The union’s inquiry began with a business manager’s concern about Farfield’s low bids and use of lower-paid workers. The manager requested certified payrolls, consulted the local union familiar with outside electrical work, and met with Farfield employees who had worked on the project. That brought the payroll categories together with people who could explain the work behind them. The union pursued the case after the Justice Department declined to join it.

What Is a False Certification?

A false certification tells the government that a requirement has been met when it has not. In Farfield’s certified payroll fraud case, the promise was specific: each worker’s classification and pay had to match the work that person actually performed.

On covered Davis-Bacon construction work, the wage determination sets the wages and benefits attached to the work. The Department of Labor’s payroll instructions address the weekly payroll and signed Statement of Compliance. The signature certifies information the government depends on when paying for the job.

Farfield’s contract required it to send certified payrolls to SEPTA for transmission to the Federal Transit Administration. Each week’s Statement of Compliance said the information was correct and complete and that workers had received the applicable wages and benefits for their work classifications.

The contract also addressed workers who moved between classifications. Farfield could pay the different rates for time spent in each, but its records had to show that time accurately. The connection between the task, the worker and the hours was part of the bargain from the start.

Groundmen and Laborers Did Lineman Work

The court found that groundmen and laborers had pulled wire and laid conduit, tasks reserved under the applicable local practice for higher-paid linemen.

Farfield argued that groundmen could assist linemen and that a lineman was present on nearly every jobsite. The testimony showed that groundmen and laborers performed the tasks themselves. Crews were largely unrestricted in what they did, and workers across classifications installed conduit and pulled wire. The court rejected the account that the lower-paid workers were merely helping.

The company also relied on its reading of collective bargaining agreements that did not expressly prohibit all the work it assigned to groundmen. But the contract’s wage determination drew on local union rates. The court looked to how the local trade actually classified the work, including testimony about practices on comparable transit projects. Farfield’s own witnesses confirmed that only journeymen could install conduit under those local practices.

That is why trade knowledge mattered. Someone who understands a wire pull can explain who did the skilled work, who assisted, and whether the payroll describes that division accurately.

Phase Codes Could Not Say Who Did Which Task

Farfield’s phase codes recorded employee hours against categories of project work, but its records did not reliably separate lineman work from lower-paid work. The gap ran through the daily paperwork that fed the payroll story.

Forepersons entered each employee’s daily hours on handwritten or typed timesheets and assigned those hours to phase codes. The codes also covered time spent in briefings, traveling to the worksite and waiting for trains to pass. Daily crew reports described the work and counted workers by classification, yet did not identify which workers performed the particular tasks within each code.

Those records could show hours charged to a phase without showing what each person had done. The contract required the missing distinction when workers performed work in different classifications.

Why the False Certified Payroll Mattered

The payroll certifications mattered because accurate worker classification and pay were conditions of the government’s payment. Finishing the rail project did not erase those promises.

Farfield argued that the $159,273 in wage underpayments was small beside the $54.7 million contract. The court rejected that comparison as the sole measure of whether the false statements mattered. Prevailing-wage requirements protect the labor standards built into a publicly funded job, even when meeting them costs the contractor more.

We see the problem with Farfield’s framing: make the contract large enough, and the workers’ missing pay starts to look like a rounding error. The people doing the work still lost that pay. Contractors paying the required rates still had those labor costs in their bids.

SEPTA had paid Farfield in full. The court nevertheless found the payroll promises important to payment, considering the contract, what Farfield’s decisionmakers knew and the repeated misclassifications. The finished infrastructure was only part of what the government had agreed to buy.

The Court Found Reckless Payroll Certifications

The court found that Farfield recklessly disregarded whether its workers were properly classified and paid. That finding rested on how the company assigned responsibility for the work and the payroll.

Farfield relied on its transit division vice president for his rail-classification expertise. Yet forepersons received broad discretion to assign tasks without instruction on how to classify rail workers.

Forepersons and managers said the vice president told them any worker could do any task. The vice president himself acknowledged limits on groundmen’s work, including pulling wire through conduit. The court found that delegating classification decisions to people without the necessary knowledge supported the recklessness finding.

Farfield also relied on a Department of Labor audit conducted during the project that found only minor holiday-pay violations. The court explained that the audit evidence did not show an examination of what groundmen and linemen actually did. Here, worker testimony supplied a detailed account of the tasks performed.

How the Court Measured the Judgment

The court used wage underpayments as the damages measure in this case. Workers testified about their coworkers’ tasks as well as their own, giving the court evidence beyond the witnesses’ own hours.

The court connected those accounts to phase codes involving lineman tasks and the company’s records. Farfield could show how much time belonged to other work, and the calculation allowed for unproductive time before determining the underpayment.

The judgment calculation tripled the wage-underpayment damages to $477,820. It also imposed $577,500 in civil penalties for 105 false weekly payrolls, using the historical rate of $5,500 per violation.

The court separately awarded $1,229,927 in attorney fees and $203,226 in costs. The fee award alone exceeded the judgment for damages and penalties. That puts the small-underpayment argument in perspective: the payroll discrepancy produced a bill far beyond the missing wages.

What Proof Do You Need as a Whistleblower?

In a payroll case like Farfield’s, the useful proof connects the work actually performed with the classification, pay and certification. Here, daily work records and employee accounts explained what the certified payroll failed to show.

A related comparison appeared in Nagan Construction’s civil payroll settlement. Nagan agreed to pay $435,000 and admitted underpaying workers and misclassifying their work on Merchant Marine Academy and South Bronx Job Corps projects. Its certified payrolls described skilled carpentry and bricklaying as lower-paid laborer work, while daily supervisor reports recorded the actual tasks.

In both cases, records created to describe the job helped expose the problem in records used to certify the pay. For a payroll employee, foreperson or worker, the useful knowledge may be precisely that difference: the category used in the office and the task performed on site. We work with insiders to understand what their records and experience can establish about the government’s payment.

How Much Money Can a Whistleblower Get From a Qui Tam Lawsuit?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In Farfield’s case, the court allocated a 30% whistleblower share of the judgment to the electrical workers’ union that brought the case. Fees and costs were awarded separately.

You Know What the Crew Actually Did

If you can explain why the certified payroll does not match the work on a public construction job, talk with our whistleblower experts about that discrepancy. We develop the case with you and bring in construction fraud whistleblower lawyers who understand Davis-Bacon classifications and the records behind the pay. You bring the view from inside the job, and we stay beside you as we turn that knowledge into your strongest construction payroll whistleblower case.