Read Complaint as filed Mercadante et al. v Blackwater et al here.
WASHINGTON, DC (June 7, 2011) – Since 2007, Blackwater Industries, which has changed its name to Xe Services, has employed over 10,000 personal security specialists to perform operations in Iraq and Afghanistan under lucrative contracts with departments of the United States Government including the State Department and CIA. While employing these individuals, many of whom are decorated veterans of the armed services including Special Forces, Army Rangers, Navy Seals, Blackwater sought to avoid millions of dollars in taxes, withholding, and payments of benefits to these employees by classifying them improperly as independent contractors.
Yesterday, Scott Bloch filed a class action lawsuit on behalf of four former security specialists, who were injured while working for Blackwater, in order to recover their payment of social security, unemployment insurance, and unpaid benefits and state and local withholding and unemployment insurance, and other unspecified damages. The action is brought on their own behalf and thousands of others who have worked for Blackwater and its newly named Xe Services. The action seeks $60,000,000 in damages and punitive damages, as well as additional amounts as proved for the class of specialists.
“These brave individuals who worked in support of Operation Iraqi Freedom and Afghani Enduring Freedom, deserve better than to be turned away without health insurance, pension benefits, unemployment benefits, and other withholding afforded to Blackwater’s other employees,” said Scott Bloch.
According to the lawsuit, the United States treasury loses billions of dollars annually to misclassified employees. Under the common law and the IRS 20 questions put out in 1987 pursuant to a regulation, Blackwater was obliged to classify these individuals as employees if Blackwater had the right to control the employees’ actions, manner of performing duties, hours, training, equipment, whether the duties of the employees go to a core function of the employer or are duties that are consider ancillary to the main purpose of the company, and other factors.
The suit also states that one of the representative plaintiffs already had a determination from the IRS that Blackwater misclassified him as an independent contractor. “The IRS already determined in the case of one of my clients that he should have been classified as an employee,“ said Bloch. “Now thousands of people will have to file amended returns. Thousands of people will likely be entitled to benefits they were denied due to the misclassification, including payment of their employer share of pension, health and disability insurance premiums, and other plans that Blackwater filed with the government for its employees, promising it would not discriminate against those employees as they did here.”
“Blackwater made hundreds of millions of dollars from taxpayers and hired thousands of former veterans of military service and police officers. They also had in their ranks Federal Agents, such as current employees of the FBI on leave of absence. They were hired as security specialists in Iraq and Afghanistan,” said Bloch. “It is a grave injustice to them who were mistreated and left without any health insurance or other benefits for their families, and left to fend for themselves in paying into Social Security and Medicare. They laid down their lives to protect dignitaries and carry out duties in support of wars for America, and they deserve better than this. Many of these same men risked their lives to protect everyone from the President of the United States to U.S. Senators, Congressman, U.S. Diplomats, to Foreign Presidential & Diplomatic Figures in one of the most dangerous places on the planet.”
Read full PRESS RELEASE Suit against Xe Blackwater here. See additional reports from Article Law 360 report here.
Contact Scott J. Bloch, PA:
Scott Bloch, 202-496-1290