Builder says race ‘discrepancies’ found on government forms

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Knutson Construction says it has discovered “discrepancies” in employee demographic information reported by the company, an acknowledgment that follows allegations from current and former employees that the company pressured workers to mispresent their race on government recordkeeping forms.

In a recent letter to an unidentified client, a Knutson project manager said an investigation has “confirmed a discrepancy in demographic data” limited to a former employee and three current employees. Current employees, the letter states, have “been given the opportunity to update their voluntary EEO-1 [Equal Employment Opportunity] information.”

EEO forms include information about an employee’s race, gender and disability status and are used for government recordkeeping and reporting requirements.

“As soon as we learned of possible discrepancies, we took immediate action to investigate the situation and updated our employee onboarding process.  We have also been communicating with our clients and employees as appropriate,” Casey Sarver, Knutson’s vice president of Human Resources, said in an email to Finance & Commerce, Minnesota Lawyer’s sister publication.

“This remains something that we take very seriously and our investigation remains ongoing.  Because this matter involves private employee information, we cannot comment further,” Sarver said.

Also this week, the University of Minnesota, a Knutson client, confirmed to Finance & Commerce that it’s investigating the claims. Former Knutson concrete worker Laura Larson alleged in an interview that her racial identity was misclassified while she was working for Knutson on a U of M project.

At least four other Knutson workers — all of whom are white — were misclassified as Asian or Hispanic while working for Knutson on university projects, she said.

Jake Ricker, U of M spokesman, confirmed that the U of M is “looking into the concerns reported to us.”

“We take these concerns seriously,” Ricker added. “The University of Minnesota is deeply committed to working with diverse businesses and partnering with historically underrepresented communities to build strong economic partnerships.”

Larson, who now works for another company, has filed a complaint with the Minnesota Department of Human Rights, as Finance & Commerce previously reported. Larson alleges, among other things, that she was wrongfully terminated after refusing to lie about her race on an Equal Employment Opportunity form.

Employee misrepresentation is an industry-wide concern — and just one example of how companies under intense pressure to meet difficult-to-attain diversity goals are tempted to game the system, according to Barb Lau, executive director of the Association of Women Contractors and a 16-year veteran of Minnesota’s construction industry.

“When goals are unattainable, we see unethical things being done so the numbers look better.  While we hear that agencies are not strictly enforcing the workforce goals in one conversation, the contractors are being pressured by the owners, agencies, and community leaders to meet them,” Lau said.

“In an effort to be in compliance with their obligations, contractors may cheat the system such as bicycling women and people of color from job to job so they work hours on all the projects with goals, misclassifying race on paperwork, hiring for projects with goals only to let go of those employees when the project ends, and other creative ways.”

The Minnesota Department of Human Rights sets workforce goals for “people of color and indigenous people and/or women on state construction projects,” according to its website.  Workforce goals apply to contracts with the state, major metropolitan agencies, the University of Minnesota, cities, counties and other entities.

Workforce goals for Hennepin and Ramsey counties are 32% people of color and 20% female, according to the Minnesota Department of Human Rights.

While Minnesota’s construction industry is becoming more diverse, women and minorities are still underrepresented. Specifically, only about 7% of union construction apprentices are women, and roughly 20% are people of color, according to the Minnesota State Building and Construction Trades.

Lau said the industry is “mandated” to meet diversity goals for contracting and workforce participation on publicly funded projects.

“The goals were established as ‘stretch goals’ with the intent that the industry would solve barriers to entry and increase the pool of women and people of color in the construction trades,” Lau said. “In 10 years, the workforce pool has increased depending on which trade we are looking at and if projects are vertical construction or horizontal.  That said, we are not close to those overall numbers.”

As for the Knutson matter, Lau said the company’s leaders have assured her “this is an isolated occurrence, and not a companywide issue” and that the company is “committed to inclusion.”

“In my opinion, taking responsibility and showing zero tolerance for these actions within Knutson’s team is urgent and should include the firing of whoever was the initiator in requiring falsification of records,” Lau said.

RELATED: Ex-employee says builder pushed workers to lie about race on forms