Questionable Competition

[bphgravity]

I would like to hear your opinions on a situation which I am not completely sure what is the best way to handle.

I have recently became aware of a non-licensed electrician that is advertising for work in the jurisdiction that I also perform work. The circumstances are questionable to say the least.

It is not legal to work in the state of Florida without proper licenses, insurance, etc... How this person is getting away with this is quite unique. His employer, which is a licensed contractor is allowing this person to use his license and insurance coverage to do work on the weekends and after hours that the contractor would normally have to pay overtime wages for. To save this cost, the contractor is allowing his employee to advertise and solicit work for himself as "extra" income.

During the normal working hours, this employee works for his boss which is a legitimate competitor of mine. This is not a problem for me. As it turns out, this contractor charges the same rate as I, which is $70 a hour. However, at night and weekends, this employee of his is advertising only $30 dollars an hour as an "electrical handyman".

I personaly feel this is abuse of the system and unfair practices. He can under bid and under charge my rates on the basis that he is not responsible for any of the overhead. This is a risky practice for his employer, but he seems to be unconcerned of any risks.

So, the question is, should I just let it go and not let it bother me, or should I push it by filing a complaint with the state licensing board. The local code compliance department is requiring that his advertisments show his employers name and license number as required by the state, however, they have no control of the other business practices.

I feel I have a legitimate complaint, but maybe this goes on all the time and this is just the first time I have been made aware of it happening.

Any experience with this type of thing? How would you guys handle this issue? Thanks

 

[roger]

Re: Questionable Competition

Bryan, I simply have no use for people "cheating" and I don't see another explanation.

Yes, I would report it.

I don't keep up with FL statutes, but here are some of N.C.'s and the bold would seem to apply.

87-47. Penalties imposed by Board; enforcement procedures.

(a1) The following activities are prohibited:

(1) Offering to engage or engaging in electrical contracting without being licensed.

(2) Selling, transferring, or assigning a license, regardless of whether for a fee.

(3) Aiding or abetting an unlicensed person, partnership, firm, or corporation to offer to engage or to engage in electrical contracting.

(4) Being convicted of a crime involving fraud or moral turpitude.

(5) Engaging in fraud or misrepresentation to obtain a certification, obtain or renew a license, or practice electrical contracting.

(6) Engaging in false or misleading advertising.

(7) Engaging in malpractice, unethical conduct, fraud, deceit, gross negligence, gross incompetence, or gross misconduct in the practice of electrical contracting.

(a2) The Board may administer one or more of the following penalties if the applicant, licensee, or qualified individual has engaged in any activity prohibited under subsection (a1) of this section:

(1) Reprimand.

(2) Suspension from practice for a period not to exceed 12 months.

(3) Revocation of the right to serve as a listed qualified individual on any license issued by the Board.

(4) Revocation of license.

(5) Probationary revocation of license or the right to serve as a listed qualified individual on any license issued by the Board, upon conditions set by the Board as the case warrants, and revocation upon failure to comply with the conditions.

(6) Revocation of certification.

(7) Refusal to certify an applicant or a qualified individual.

(8) Refusal to issue a license to an applicant.

(9) Refusal to renew a license.

(a3) In addition to administering a penalty under subsection (a2) of this section, the Board may assess a civil penalty of not more than one thousand dollars ($1,000) against a licensee or a qualified individual who has engaged in an activity prohibited under subsection (a1) of this section or has violated another provision of this Article or a rule adopted by the Board. Civil penalties collected under this subsection shall be deposited in the General Fund of North Carolina as nontax revenue.

In determining the amount of a civil penalty, the Board shall consider:

(1) The degree and extent of harm to the public safety or to property, or the potential for harm.

(2) The duration and gravity (I highlighted that because I thought you would like it) of the violation.

(3) Whether the violation was committed willfully or intentionally, or reflects a continuing pattern.

(4) Whether the violation involved elements of fraud or deception either to the

ETC...

Roger

[ July 05, 2003, 06:19 PM: Message edited by: roger ]

 

[bphgravity]

Re: Questionable Competition

Thanks Roger!

The Florida Stautes are similar. Here are the ones that I feel apply to this issue.

-Making misleading, deceptive, or fraudulent representations in or realted to the practice of the profession.-

-Failure to perform any statutory ot legal obligation placed upon the licensee.-

-Making deceptive, untrue, or fraudulent representations in or related to the practice of a profession or employing a trick or scheme in or related to the practice of a profession.-

-Practicing or offering to practice beyond the scope permitted by law or accepting and performing professional responsibilities the licensee knows, or has reason to know, the licensee is not competent to perform.-

-Delagating or contracting for the performance of professional responsibilities by a person when the licensse delagating or contracting knows, or has reason to know, such person is not qualified by training, experience, and authorization when required to perform them.-

-Failure to comply with a lawful order of the department or the board.-

-Fraud, deceit, negligence, incompetence, or misconduct.-

-Negligence, incompetence, or misconduct.-

-Willful violation or disregard of applicable building codes or laws.-

-Any act assisting unlicensed activity.-

-Aiding unlicensed practice by combining or conspiring.-

-Acting in a name not on the license.-

-Failure to supervise.-

-Failure to affix a registration or certification number.-

-Failure to obtain building permits or inspections.-

-Practice beyond the scope of license.-

(All form Chapter 489, PART II of the Florida Statutes.)

I like the Gravity mention! Fines are assigned by the "Gravity of the violation" in Florida as well.

 

[jerod]

Re: Questionable Competition

california law limits unlicensed electricians on how much they can charge, it used to be 400.00 time and material, i think it is higher now. when i started in business i felt the same way you do and i complained, cslb basically said as long as he is registered and satisfied registration requirements he is legal. i found these guys splitting there invoices thinking they were legal, i persued again. the bottom line is they are not prosecuted, they may get a letter but that is it. there are more out there today than ever. they were never a threat to my business but going over the state limit is just not right.

 

[jxofaltrds]

Re: Questionable Competition

See if he is paying into a workers compensation fund. They will come down fast because as we all know they want their money.

Just a thought.

Mike P.

 

[goldstar]

Re: Questionable Competition

Bryan,

Our laws up here are similar to those down south.

"the contractor is allowing his employee to advertise and solicit work for himself as "extra" income.

In New Jersey we contractors also have to take out business permits. Having a license is one thing - doing business with the public is another. If this person is advertising for work under his employer's name that could prove to be a sticky situation. However, if he is advertising under his own name (without being licensed) I think you've got a case.

We also have to post a surity bond in the amount of $1000.00 favorable to the State of NJ. Basically the insurance company issuing the bond is attesting to the fact that we are who we say we are.

If you file a complaint with your licensing board make sure "all your ducks are in a row". What I mean by that is make sure your charges are accurate and provable, that your license # appears on your stationary, etc. Also, I would try to get some other legitamate contractors to join in the complaint if you can.

Good luck with this. By the way, the fines up here ( for doing business without a license or business permit) start at $1000.00 for the 1st offense.

 

[ryan_618]

Re: Questionable Competition

Bryan, as an inspector I work with the DOPL fairly often. I would just make a phone call to them and let them worry about it. In my experience, they know every type of violation they can cite him with and will be happy to do so.

 

[brian john]

Re: Questionable Competition

I say go after the culprit, you pay the required fee's and so should he. I'll compete against the anybody, but they should play fair.

I had a similar problem in Maryland and Virginia, I lost a major job to an unlicenced contractor. I called the local jurisdiction and they told me, that don't have time or money to track unlicenced contractors. I said that I should turn in my license and save the money and inspection hassles. Sir you can't do that is against the law, Well DUH........ I was told if I could document the work, get mine (and his) customer to file a complaint they would investigate. I figured that taking this customer to court would be a bad idea. I lost a lot of work to this one contractor.

In Virginia there is an Infrared contractor, that performs electrical IR scans. He is not an licensed, either master nor electrician, he is not an electrical engineer, nor a certified IR tech (which means nothing in the electrical field).

I questioned the locals on this issue and they say the understand my concern but the state has jurisdiction and the state is not concerned over this issue.

We also compete against manufactures for service contracts. many have no business licenses, or anything in the State. I understand manufactures making repairs, but why should they be allowed to perform service (often on equipment they did not manufacture), without proper licenses?

 

[russellroberts]

Re: Questionable Competition

This kind of thing goes on around here some. Most of the established contractors shrug it off or look the other way.

Some of the newer "move-ins" make some noise about it but seldom report them because of an incident a few years ago in which an employee of a EC did a lot of "side work" with his employer's blessing.

Now, there was no advertising,the employer simply let him do small jobs that he had calls on but couldn't get to. The employee did these nights and weekends.

One of the "move in's" reported him and the state board issued a cease and desist order.

Turns out the guy's wife had M.S. and needed alot of expensive meds and treatments that his insurance would only partially cover.

The end result of this was the EC who reported him saw his business dry up overnight when the story got out among the builders in the area.

This is an unusual story I'm sure,and It sounds like Bph's guy is just trying to beat the system.

Russell