Defense Base Act Compensation Blog

The Modern Day DBA Casualty

Judge Denies Blackwater’s Motion for Arbitration

Posted by defensebaseactcomp on May 23, 2012

Law Offices of Scott J Bloch  May 23, 2012

WASHINGTON, DC (May 23, 2012) – Blackwater Industries, which changed its name to Xe Services, and now has changed it yet again to Academi LLC, lost its initial bid to have the $240 million suit for employee misclassification sent to arbitration and dismissed from federal court in Washington, D.C.

Scott Bloch filed an amended complaint (see link above) in the class action lawsuit on behalf of four former security specialists, who were injured while working for Blackwater, in order to recover their payment of social security, unemployment insurance, and unpaid benefits and state and local withholding and unemployment insurance, and other unspecified damages. The action seeks $240,000,000 in damages for lost benefits, overtime, treble damages and punitive damages, as well as additional amounts as proved for the class of specialists.

The court has rejected that motion filed by Blackwater and required it to file another motion to determine if the same Plaintiffs agreed to have an arbitrator determine if the agreements were unconscionable, procured by duress, fraud and undue influence.

“Blackwater acted illegally and unconscionably toward these brave individuals,” said Bloch. ”Through their fraud as pointed out in the Amended Complaint, they avoided overtime for security workers who worked sometimes 12-16 hours a day 6 days a week. They were forced to sign agreements they never read and were not given time to read and not given copies, which took away valuable rights and were unlawful in their terms. Now the court has rejected their initial motion and required Blackwater to seek the same relief if they can prove that the Plaintiffs who never were allowed to read the original agreements agreed to have an arbitrator determine whether they properly agreed to anything. We continue to assert the illegality of the agreements and the actions of Blackwater.”

Read Xe’s Arbitration Bid Denied in Misclassification Suit here.

3 Responses to “Judge Denies Blackwater’s Motion for Arbitration”

  1. […] Read more… […]

  2. superman said

    Blackwater or Xe or Academi or whatever you want to call them is going down on this one. That is why after this law suit was filed, Blackwater Xe Academi changed everyone from Independent contractors to employee’s, what an admission of guilt.

    The funniest thing is that Blackwater’s recruiters are emailing people telling them that change occurred because of the law suit!!! How funny is that! Wow what a bunch of clowns.

    This judge is not stupid and knows that Blackwater has been up to underhanded things for a long time and now its time for them to “Pay the Piper”, tax evasion is what brought down Al Capone ! Tax fraud, Defense Base Act fraud is what is going to bring down Blackwater Xe Academi!

    Think about it Blackwater had a contract that stated you are an employee so that the company can get Defense Base Act Insurance required so that they could be awarded the Government contract in the first place. But your an independent contractor for everything else, i.e. so that Blackwater could avoid paying required taxes. How Criminal is that one!!!

    They have still attempted to avoid this even after the IRS ruled against them in 2007. Yet the US Government still awards Blackwater more government contracts. This conspiracy goes all the way up the flag pole.

  3. Ronco Consulting also did this to their overseas employees for many years.
    Right up until April of 2003 with my husband and many others whose paperwork I have.
    Prior to that most of the contracts he worked with them were State Department and they presented him as an employee for Defense Base Act Insurance coverage but sent him a 1099 for tax purposes.
    Ronco even went so far as to have two employees sign back dated rewritten employment contracts after they were blown up so they would be covered under the Defense Base Act.
    This would all suggest Defense Base Act Insurance Fraud to me, as well as Tax Fraud, let alone Labor Law violations for the benefits they provide most employees but not a chosen few.
    Ronco Consulting has even been investigated by the State Department and had their hands slapped a few times and hopefully lost their favored standing with the DoS.
    Ronco has committed other DBA violations but I’ll save those for another post.

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