WASHINGTON — Four former employees of Blackwater, the scandal-plagued security firm now called Xe, have filed a $60 million class action lawsuit claiming the firm failed to pay health and pension benefits to its employees.
Their lawyer, Scott Bloch, said Wednesday that Xe improperly classified thousands of its employees as independent contractors, allowing the company to avoid “millions of dollars in taxes, withholding and payments of benefits.”
“Blackwater made hundreds of millions of dollars from taxpayers and hired thousands of former veterans of military service and police officers,” said Bloch in a statement.
“It is a grave injustice to them who were mistreated and left without any health insurance or other benefits for their families, and left to fend for themselves in paying into Social Security and Medicare,” he said.
The lawsuit was filed Monday in federal court in Washington, and hopes to recover Social Security, unemployment insurance, health and other benefits for the four plaintiffs, all of whom were injured while working for Blackwater.
“Plaintiffs and many of those similarly situated came home wounded physically and psychologically from Iraq, Afghanistan and other countries, and needed health insurance to take care of difficulties for themselves and their families,” according to the complaint.
The lawsuit says Xe and its workers compensation insurers refused to provide benefits until forced to do so “after drawn out disputes in administrative courts.”
According to Bloch, the plaintiffs were in fact employees of Blackwater entitled to a full range of benefits because Blackwater had the right to control their “actions… hours, training,” and equipment.
Bloch said the US tax agency, the Internal Revenue Service, had already determined that Blackwater had misclassified one of the four plaintiffs as an independent contractor.
“Thousands of people will likely be entitled to benefits they were denied due to the misclassification, including payment of their employer share of pension, health and disability insurance premiums,” Bloch added in the statement.
Xe Services, which was founded as Blackwater in 1997 by Erik Prince, has earned hundreds of millions of US taxpayer dollars over the years, providing security services to the US State Department and CIA.
Two years ago, amid a financial restructuring, the company changed its name to Xe Services, and Prince stepped down from day-to-day operations.
The company still maintains a 7,000 acre (28 square kilometers) training facility in eastern North Carolina, considered one of the largest in the United States.
Over the years, Blackwater has faced numerous legal problems.
In 2007, Blackwater security guards were accused of killing 14 Iraqi civilians. A US appeals court reopened the prosecution of four of these former guards last month.