Thursday, May 10, 2012

Where were promised union jobs, and wages for training program? Lawsuit by trainees against BUILD, Forest City faces key court argument tomorrow; defendants ask judge to dismiss most but not all claims

Amid the Barbra Streisand hoopla, Atlantic Yards controversy persists.

The federal lawsuit filed last November against Forest City Ratner and job-training group BUILD (Brooklyn United for Innovative Local Development) faces a crucial hearing Friday, May 11, as a federal court will hear arguments on the defendants' motions to get most but not all of the charges dismissed.

Seven (of 36) people who went through a highly-competitive pre-apprenticeship training program (PATP) enumerated in the Atlantic Yards Community Benefits Agreement (CBA), sued BUILD, Forest City, and individual executives, as well as the company that BUILD found to provide unpaid training for them.

The plaintiffs, who sued on behalf of themselves and others similarly situated, seek to recover not only unpaid wages but also to recover damages based on what they call broken promises that led them to participate in a "sham employment training program."

Whatever the result of the motions, some version of the case will persist. If the motions are unsuccessful, the court argument will ultimately concern damages that represent lost earnings from a union career, and paid potentially by deep-pocketed corporate defendants.

If successful, the motions will reduce the case to an argument about smaller sums that represent unpaid wages from the training program, paid by less-established defendants. Note that a motion to dismiss must treat allegations as true, but argue that, as a matter of law, they are not valid.

The hearing will be at 11:30 am in U.S. District Court, Eastern District of New York, 225 Cadman Plaza East, Courtroom 6C South, Brooklyn, before Judge John Gleeson.

The overview

"I was robbed," plaintiff Maurice Griffin said at a press conference when the suit was filed 11/15/11. “They guaranteed me a union card, They said it’s not a question of whether we have it, but whether you complete the program."

The Forest City defense is essentially that the company and its executives were not responsible for promises purportedly made by BUILD CEO James Caldwell and BUILD, and that, whatever Caldwell may have said, it was belied by the language of the CBA.

Forest City Ratner's lawyers are also defending BUILD, Caldwell, and the individual Forest City defendants, the executives Bruce Ratner and Jane Marshall.

The other defendants, Gausia Jones and his company Orbin's Big Green Machine, have a separate set of lawyers. Charges against Jones and Orbin's for the failure of the plaintiffs to get union cards should be dismissed, say their lawyers, pointing out that those defendants were not CBA signatories.

The least ambiguous element of the lawsuit seems to be the clause seeking recovery of wages for unpaid work over two months. BUILD officials said last November that the trainees had agreed to waive their rights to be paid, but the plaintiffs' lawyers said that such agreements were not valid.

In this case, defense lawyers have asked that the claims regarding wages against the the Forest City defendants be dismissed, arguing that Forest City and its employees were not liable. However, neither BUILD nor Orbin's have asked for those Fair Labor Standards Act (FLSA) claims be dismissed.

Similarly, while Forest City's lawyers have asked that breach of contract claims be dismissed against individual defendants, they have not asked that such claims be dismissed regarding the company and associated entities, and BUILD.

Nor have Jones and Orbin's asked for the dismissal of charges seeking compensatory damages for unjust enrichment.

Meanwhile, as defense lawyers have pointed out, the plaintiffs have backed away from some of the multiple initial charges, choosing not to counter some defense arguments.

Even before the hearing begins, both parties have been proceeding with discovery, with a status conference set for 8/7/2012, though the scope of such discovery is unclear.

The background

As indicated in the lawsuit, a BUILD staffer in July 2010 sent recruitment letters to individuals on BUILD’s mailing list, stating, “After many years of delay, we are preparing to launch a pilot of the Pre-Apprentice Training Program for people interested in training for employment in the construction building trades.”

At a session for participants, Caldwell, according to the suit called the PATP “the opportunity of a lifetime,” and promised that those going through the program would each get a job at the Atlantic Yards Construction Site (AYCS) as well as membership in one of the three primary unions at the site, the laborers’ union, the electricians’ union, and the carpenters’ union.

One plaintiff, Kathleen Noreiga, charged that Caldwell in a personal conversation reiterated that PATP participants would get union jobs at the AYCS. Plaintiff Griffin was told: “you do not have to apply to a union. There are thirty construction books reserved for graduates of this class.” Forest City executive  Marshall similarly promised Griffin he'd get a union card, according to the suit, upon completion of the project.

Several of the plaintiffs quit or turned down jobs, or bypassed a union orientation session, in anticipation of the promised union cards, according to the suit.  Gausia Jones, an instructor in the program, "repeatedly" told participants he had seen the promised union cards. Caldwell, who said BUILD was "under" Forest City, said he'd seen the reserved union books.

At the worksite selected by Orbin's, a private house on Staten Island, the PATP participants were the only workers at the site, a job with "effectively no supervision" and several safety hazards. The plaintiffs worked for two months but were unpaid. Nor did they learn much--the inducement, according to the lawsuit, was a promise of union membership and work at the Atlantic Yards site.

As the program concluded, participants began to learn that things were going awry, according to the suit. They were steered to other pre-apprenticeship programs and told they might get building maintenance jobs at other Forest City buildings. None have gotten construction jobs at the site. Later, they were offered maintenance jobs and jobs at Planet Fitness.

Asking for dismissal

Forest City and BUILD defendants asked that most of the claims be dismissed.

The motion states:
Although there is no specific allegation that defendant Ratner made any such promises, or any allegation that Ratner, defendant Marshall or defendant Caldwell intended to bind themselves personally to the alleged contract, plaintiffs allege that all defendants were parties to the oral contract.
Plaintiffs allege that this reliance is based on promises made in the CBA and public statements made about the CBA.
The CBA itself, however, provides only that Atlantic Yards Development and Brooklyn Arena ““intend”” to negotiate with the NYC Building Trades Council to work out a project labor agreement for the Atlantic Yards construction site, and that ““[i]t is the intention”” of Atlantic Yards Development and Brooklyn Arena that the Trades Council will accept PATP graduates into the NYC Building Trades Council’’s apprentice program. The CBA also provides that non-signatories -- such as plaintiffs -- may not rely on its terms to form the basis of any claims.
Forest City's distance from the PATP, they motion states, is indicated by the fact that the plaintiffs were required to sign a waiver releasing only BUILD and Jones from liability if they were injured at the Staten Island work site.

Claims for fraudulent inducement by all of the plaintiffs against all of the defendants, according to the motion, are not only duplicative of the breach of contract, they rely on evidence regarding just one plaintiff and one defendant, Griffin and Caldwell.

Claims for unjust enrichment against Forest City and BUILD, according to the motion, should be dismissed, since the work was allegedly performed for defendants Jones and Orbin's.

For their part, Jones and Orbin's note they're not parties to CBA, nor did they commit Orbin's to provide the plaintiffs with union jobs, and there's no allegation that Jones intended to be personally bound by the one promise he purportedly made.

The plaintiffs respond

The plaintiffs, in response, argue that the defense too narrowly interprets the Fair Labor Standards Act, and that that PATP was financed by the developer and jointly administered by both BUILD and the FCR defendants. Individuals need not have absolute control to be an employer.

The motion notes that the plaintiffs don't base their claim merely on the CBA but on promises made directly to them, Caldwell, according to the motion, made clear and unambiguous promises, and Marshall echoed Caldwell.

Moreover, the Forest City defendants gave the plaintiffs every reason to believe that the speakers at the PATP orientation spoke on behalf of the FCR defendants, according to the plaintiffs' response.

The defendants respond

Getting the final word in the first set of briefs, lawyers for the defendants point out that there are no facts that suggest that Forest City controlled the PATP participants, such as setting their work schedule. Nor are there facts to show that Marshall and Ratner were employers.

The motion points to potentially contradictory arguments: the plaintiffs, in arguing labor law claims, allege their were employees, but in arguing for damages under General Business Law, the plaintiffs assert they were participants in a job training program and thus consumers.

Claims of promissory estoppel--essentially promises without a formal contract--must be dismissed against Forest City and BUILD, who do not control union jobs, according to the motion. If the claims survive, they at least should be dismissed against Ratner, who was not asserted to have made direct promises, according to the motion.

Lawyers for Jones and Orbin's argue that various claims should be dismissed against them, for example because "no allegation from which it could be inferred that Jones and Orbin’s induced plaintiffs to forego existing employment opportunities in order to participate in the PATP."

Nor are are there "allegations from which it could be inferred that their reliance on the one promise Jones allegedly made to them was reasonable and foreseeable."

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