Subcontractor Fired From S.F. Public Works Job Plans to Appeal to State Supreme Court

A company fired by San Francisco officials, after its workers were blamed for causing a series of gas leaks in a major infrastructure project several years ago, plans to appeal the decision to kick it off the job to the California Supreme Court.

Last week, a state appeals court ruled in favor of the city, which removed Synergy Project Management from a $13.7 million project in the city's Haight neighborhood in late 2015.

City officials blamed the firm's workers for repeatedly breaking natural gas lines, and said its crews were involved in several episodes that raised questions about its safety practices. That included one widely publicized incident in which workers dangled a foreman headfirst into a manhole as traffic moved nearby.

The project involved sewer replacement, water main installation and street repaving. San Francisco Public Works hired Ghilotti Bros. as the main contractor on the project and Ghilotti, in turn, hired Synergy as a subcontractor.

In October 2015 the city halted work on the job. Then, in a rare move, public works officials removed Synergy from the project.

When the subcontractor was fired, then-Supervisor London Breed, who represented the Haight before being elected mayor, told KQED: "It's about freakin' time."

Synergy argued that it had hit gas lines during the project because PG&E had not provided accurate information about the lines' locations, a claim the utility disputed.

The company appealed, and the following January an administrative hearing officer ruled in favor of the city's decision to fire the company. The hearing officer found that four gas leaks on the project were the result of Synergy's unsafe practices.

Synergy and Ghilotti then filed suit. They argued that the hearing officer lacked jurisdiction and that state law bars the city from removing a subcontractor over the objections of the main contractor.

A San Francisco Superior Court judge agreed and reversed the city's decision. On Thursday, the state's 1st District Court of Appeal overruled the lower court.

"We are pleased that the appellate court confirmed that the city always has the authority to remove a subcontractor from working on a city project to protect public safety," said John Coté, spokesman for the San Francisco City Attorney's Office.

"The decision makes that crystal clear. The city had valid and numerous concerns about Synergy's work. We took reasonable and lawful actions to protect the interests of the public," Coté said.

Kris Cox, a lawyer for Synergy, said the appeals court was incorrect in its interpretation of the state law in question -- the Subletting and Subcontracting Fair Practices Act.

"The Court of Appeal gave powers to the government which are not in the act," Cox said in an email. "The city did not have the power ... to directly remove a subcontractor from a public works construction project over the objection of the prime contractor."