The company refused to hire women, telling applicants the jobs were for men only.
Then, the company disappeared.
No one ever paid the women. Government lawyers said they couldn’t collect from a company that didn’t exist anymore. And yet a company with the same leaders and same brand-name client has popped up again.
This is how the company got away with employment discrimination:
1. Set up shop
ILM Group, as it was known, provided temporary workers for industrial employers like manufacturing plants and warehouses. It was a family business, run by a couple, Daniel Ponce and Gina Mendoza, and Ponce’s brother, Jorge. They had branches in Southern California, and one near Nashville, Tennessee.
“Our family is passionate about achieving success,” Daniel Ponce told trade publication Staffing Talk in 2011. “This shared passion fuels the entire organization. We are excited that more and more companies recognize the need for diversity, and the need to deal with woman-owned businesses.”
When Sherry Brewer applied for a job with ILM Group in 2011, the company was one of the fastest-growing temp agencies in the country, with $30 million in revenue. Brewer, on the other hand, was struggling to pay her bills.
A company representative at the Tennessee branch allegedly told her she didn’t qualify – the jobs were for men. The agency was filling laborer positions at a nearby film manufacturer, requiring heavy lifting. Brewer was angry and filed a complaint with the Equal Employment Opportunity Commission.
Marco Valverde, ILM Group’s local supervisor at the time, told Reveal from The Center for Investigative Reporting that the film company specifically asked for men. But he denies having told that to Brewer.
“The problem was the lady,” he said. “I didn’t say nothing wrong.”
3. Get caught
The Equal Employment Opportunity Commission, the federal agency that enforces the ban on job discrimination, filed suit in 2013. The temp agency had placed 55 men at the manufacturing plant, and not even one of the 44 women who applied, according to legal filings.
Hiring based on sex, race and age is a nationwide problem in the temp industry, an earlier Reveal investigation found.
In this case, Valverde said the women who applied simply couldn’t do the lifting. But the commission found that men who didn’t meet the lifting requirement were hired. Women who did meet it were rejected.
Valverde acknowledged he color-coded the application files by gender. Blue was for men, yellow for women. “For me it was kind of nice to do this, but I didn’t know that I’d get problems with that,” he said in an interview.
During settlement negotiations in 2014, the company told government lawyers it was having financial struggles. The Equal Employment Opportunity Commission reduced the amount of money it was demanding.
But then the company went dark. Daniel Ponce told company lawyers it had shut down completely. The lawyers withdrew from the case.
So the government got a court order that the company owed $162,800, including compensation for a few of the women and punitive damages. It’s like an unpaid bill, waiting for collection. And it’s not unusual: The commission resorted to the same tactic in a very similar case this month.
5. Form a new company
While the company was tangling with the employment commission in Tennessee in 2014, Daniel Ponce started a new temp agency in California, called International Labor Exchange, corporate records show.
Ponce, his brother Jorge and Gina Mendoza shuffled their names around on corporation filings for the old and new businesses. The new company, known as Labor Xchange, opened branches in the Los Angeles area as well as in Fairfield and Hayward in Northern California. There are also branches in Texas and Florida.
Another Labor Xchange client is cake-maker Just Desserts, whose treats can be found in grocery stores like Safeway, Costco and Whole Foods.
Reached by phone, Daniel Ponce said, “I appreciate you following up, but I’m not going to comment on anything.”
Ponce’s other company, ILM Employment Group, is also on the hook for $154,000 in judgments from the California Labor Commissioner for acting as an unlicensed farm labor contractor and giving workers incorrect paystubs. That sum also sits unpaid.
6. Wait for the feds to give up
Rose Crigger has been waiting a long time. She applied at ILM Group’s Tennessee branch in 2011, but didn’t get any work. Living with her daughter’s family without a job was stressful. “I knew that I was taking away from my grandchildren because of it,” she said.
Then she got a letter from the Equal Employment Opportunity Commission, the first sign it was a case of gender discrimination. Crigger, now 60, says she worked hard industrial jobs for years and could have handled the lifting. The employment commission included more than $6,000 for Crigger in its judgment against ILM Group. It was the money she would have earned in 2011 if she had been hired.
But this April, five years after she applied for the job, Crigger got another letter from the employment commission.
“Because ILM has discontinued its operations, we have been unable to collect on the judgment,” it said. “You should therefore, not anticipate receiving any payout from this judgment.”
“They slapped us in the face when this happened by hiring only men, and they’re just going to slap us in the face again,” Crigger said. “They’re just going to get away with it.”
7. To be continued
The Equal Employment Opportunity Commission can go after companies that pretend to go out of business to wiggle out of a judgment and then pop up somewhere else.
But the commission didn’t know the new company existed, said Faye Williams, the commission’s regional attorney who brought the original lawsuit.
“We won’t ignore it. We’re going to look into it,” she said. “A default judgment is an order of the court, and we take it very seriously.”
The commission tallies all the money it wins for discrimination victims each year as a measure of its achievements. Commission headquarters, though, doesn’t keep track of which companies never end up paying, officials said.
So last November, the commission announced that its lawsuits had nabbed $65.3 million for victims in fiscal year 2015. That figure included $162,800 that ILM Group still hasn’t paid.
Will Evans can be reached at firstname.lastname@example.org. Follow him on Twitter: @willCIR.