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City of Belton Scammed by Rope Factory, According to Lawsuit Filed by Former Workers

Several former factory workers have filed a federal lawsuit against High Performance Ropes of America in the U.S. District Court in Waco, alleging that owners and managers of the factory it operates in Belton, TX, cheated the plaintiffs out of the wages required by law, and intentionally failed to accurately record the hours employees worked.

The factory was opened to produce rope for construction and manufacturing in 2009 by the Grupo Alvarez, a Mexican conglomerate, after securing approximately one million dollars in tax subsidies from the City of Belton in exchange for promises to enhance and expand the local economy and create value through job creation.

However, the lawsuit by the former workers alleges that the company consistently failed to pay all their plant workers, misclassified factory workers as independent contractors for many months, ignored overtime pay requirements, and then attempted to cover up the violations by falsifying their employment records.

In addition, Bell County authorities issued a tax search and seizure warrant to High Performance Ropes in late August, after the company was found delinquent for taxes owed the County in 2011.

The former workers bringing the lawsuit are represented by the Equal Justice Center. They expect additional workers to join in the lawsuit, and have brought the suit as a class action, allowing additional qualifying plaintiffs to join in order to recover withheld wages.

“The consequences of a failure to pay workers the wages they are owed is to depress the local economy and create more poverty,” according to Kayvon Sabourian, an attorney for the Equal Justice Center working on the case. “The city is getting a raw deal twice. The workers are getting a raw deal, and the tax base is getting a raw deal.”

In addition, by illegally misclassifying workers as independent contractors, companies avoid paying the required federal Social Security and Medicare taxes.