Bankruptcy Amid Labor Dispute With DirecTV

MILWAUKEE (CN) - Besieged by claims that DirecTV misclassifies technicians to withhold overtime, a major contractor has filed for bankruptcy.

DirectSat USA LLC, a party named in several of the ongoing labor disputes with DirecTV installation technicians, is owned by UniTek Global Services Inc., which recently filed for voluntary Chapter 11 reorganization in Delaware.

The company reports $186 million in liabilities and $3.2 million in assets in its petition. It owes DirecTV more than any other creditor: $7.6 million, according to the federal petition.

Reorganization will convert the publicly traded company into a private one, with creditors accepting equity as partial payment, UniTek said in a statement.

DirecTV, along with the other 30 largest creditors, support the petition, UniTek's website says.

DirectSat is one of several companies with direct control over the hiring, firing and pay of technicians who install DirecTV systems. Technicians allege that both DirecTV and DirectSat treat them as employees but classify them as independent contractors to get away with wrongly underpay them.

The bankruptcy is unlikely to have any effect on DirecTV in the labor litigation, bankruptcy-law Ralph Anzivino said in an interview.

Anzivino, a professor at Marquette University, did note, however, a court is likely to enjoin any claims against DirectSat while the restructuring is ongoing.

Claims against DirectSat would then be settled as part of the bankruptcy proceedings, Anzivino said.

DirecTV's lead counsel, T. Warren Jackson, directed questions to UniTek, which has not returned a request for comment.

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