Building Trades News

Five Unions File Unfair Competition Lawsuit Against Redevelopment Project in Downtown Los Angeles

By Roy San Filippo
Staff Writer

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The suit was brought by Ironworkers Local 433, Ironworkers Local 416, Sprinklerfitters Local 709, IBEW Local 11 and Painters and Allied Trades, District Council 36. Two dozen of Gilmore’s partners and sub-contactors in the El Dorado and Rowan loft conversion projects in the 400 block of South Spring Street were also named in the lawsuit.

The suit alleges that the developers, contractors, subcontractors and labor finders named in the suit "have conspired to engage in an underground economy of paying cash, employing undocumented workers and violating prevailing wage laws to unfairly compete against law-abiding developers, owners, general contractors, and sub-contractors."

Robbie Hunter, President of Ironworkers Local 433 said while other developers are working with unions to change the face of downtown, Gilmore has not followed suit. "Unfortunately, Gilmore has decided to run this like a third-world operation – paying employees cash under the table at rates well below the industry standard, hiring unskilled workers who aren’t qualified, ignoring Workers’ Compensation, and cheating local kids out of apprenticeships," Hunter said.

"The business practices on the Gilmore projects are the very essence of unfair competition—cash pay, failure to pay workers what they owe, and dangerous job conditions," added Ellyn Moscowitz, attorney for the trades. "The trades are making a stand on this project because it so dramatically shows everything that is wrong with ‘building LA’ non-union."

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"Taxpayers financed these projects, but employers like those on this Gilmore project think it’s okay to avoid paying taxes by paying workers in cash," said Marvin Kropke, Business Manager for IBEW Local 11. He added that the City of Los Angeles has given developers significant economic incentives for private for-profit projects.

"We are sending a message to all of the developers and contractors working downtown that they are not going make money off the backs of these workers and jeopardize the health and safety of the community," said Michael Huerta, President of Sprinklerfitters 709. "The trades are not going to stand by and let the underground economy grow and flourish here."

The lawsuit also alleges that Gilmore and his subcontractors have failed to pay prevailing wages or overtime, or provide meal and rest periods as required by law. As a result, they have underbid law-abiding competitors and put employees’ and the public’s health at risk.

"The craft unions are taking a stand against cheating contractors that seek to gain an unfair advantage by not paying workers proper wages, ignoring health and safety regulations, and cheating the taxpayers." said Grant Mitchell, Business Manager of Painters and Allied Trades, District Council 36."Legitimate contractors who pay workers correctly and follow the law simply cannot compete against unscrupulous contractors who illegally cut costs at the expense of workers and taxpayers."

Hunter of the Ironworkers estimated the at least 50 percent of the downtown redevelopment projects are a part of the underground economy – and it’s spreading. "Many of these redevelopment projects are15-story buildings that will take two and three years to complete. We are talking about hundreds of jobs on these projects. This is not small potatoes," he said.

"The state and federal agencies just don’t seem to care," Hunter said. "It’s up to us to take the fight to them, which is precisely what we are doing with this lawsuit."

Jim Irwin, an organizer with District Council 36, said, "We all know construction work is hard, but making people work under unsafe conditions means unnecessary risks. What does it cost them to make sure employees stripping lead-based paint or removing asbestos have respirators? Almost nothing. Over the years, though, we pay with our lives."

The unions are seeking restitution for an as-of-yet unspecified amount for damages that have resulted from the alleged unfair business practices. They are also seeking an injunction to stop the work currently in progress on these projects.

Stay tuned to future issues of Building Trades News for updates.