Publisher’s Note: This is a guest submission to Working Class Heroes. Enjoy!
A Blue Collar Guy Hollers Back
Kristian Pedersen, a Master plumber from Massachusetts, worked as a Licensed Plumber for Roto Rooter, a subcontractor for Chemed corporation (CHE on the NYSE). In Massachusetts as well as several other states, it is mandatory that all plumbing be done by a Licensed plumber.
Then Mr. Pedersen discovered that Roto Rooters’ call center (to which all calls in The US are routed) were dispatching unlicensed people to plumbing jobs in direct violation of state law . As a matter of fact, in Massachusetts, this constituted consumer fraud. Not disclosing to the customer that they were in fact charging for licensed work -but having,unlicensed plumbers do the work- made more money for the company since the unlicensed employees were of course paid less.
Mr Pedersen’s complaints to the company (both verbal and via email) fell on deaf ears. Mr Pedersen was hospitalized for three days after a workplace accident, which the company failed to document and was alleged to have covered up in retaliation for Kristian’s complaints.
Mr. Pedersen then wrote to the Plumbing Board, in effect blowing the whistle on this consumer fraud which involved using unlicensed plumbers. He was terminated by Roto Rooter two weeks later. Mr Pedersen had also joined a federal class action against Chemed which claimed that the company did not pay them minimum wage, forced them to work unrecorded hours and took illegal deductions from their paychecks. But he didn’t stop there.
Kristian filed a suit in Massachusetts Superior Court for breach of contract because Roto Rooter was using unlicensed people in lieu of licensed ones. He then filed a formal complaint with the State Board of Plumbers and Gasfitters. After his termination, Roto Rooter contested his unemployment three times. However, the General Manager made the mistake of admitting under oath that they do in fact use an unlicensed work force(stating that there is nothing in the employee handbook that says they cannot do so.) The General Manager then fell silent and asked for an attorney when he was informed that such a deception broke state law and constituted consumer fraud.
Mr Pedersen then took his complaint public and became the face of the Occupy movement in Boston. Several organized labor groups came to his aid in a supportive role and he recently drew international attention for his case in International Association of Plumbing and Mechanical Officials’ Magazine, the primary resource for the Plumbing industry.
The case also struck a chord with consumers in other states. In Minnesota a class action suit in a particular repair case developed over Roto Rooters’ sales practices targeting the elderly and others to perform unnecessary repairs at the cost of thousands of dollars to consumers.
This kind of actionable suit may very well carry over to other states as well. Connecticut CT made this kind of fraud an arrestable crime in order to stop Roto Rooters from using unlicensed people. In 2009 three Roto Rooter employees were arrested for breaking that law.
Kristian still didn’t stop there. He dug further and found that Chemed’s other bread winner, Vitas Healthcare, was being investigated for Medicare fraud (Vitas is an end of life for-profit hospice company). As it turned out, a whistleblower from Dallas sparked this investigation, which then led to Kevin Mcnamara, CEO of Chemed,being charged with securities fraud. Kristian himself exposed this hedge fund company, Chemed, as having been built on a foundation of consumer fraud, deceit and worker exploitation.
If you google “Kristian Pedersen roto rooter” you will find several of the articles about his case, including one from the Boston globe calling his suit one of the headline grabbers of 2011. However, Kristian’s story is by no means over. Roto Rooter is still trying to discredit him. And yet he is just one guy standing up for his trade, trying to make sure that his professional license retains its value. It may not surprise you to learn that since going public, he has received death threats. He is married with five kids and is putting himself on the line.