Skip to main content

At hearing in case over promises of jobs to trainees, judge expresses skepticism about tying BUILD to Forest City; plaintiffs' lawyers point to atypical situation and unreliable witness

Lawyers representing former trainees in a coveted but ill-fated pre-apprenticeship training program (PATP) authorized by the Atlantic Yards Community Benefits Agreement (CBA) yesterday faced a judge somewhat skeptical of attempts to tie developer Forest City Ratner to the nonprofit Brooklyn United for Innovative Local Development (BUILD), which operated the program.

The plaintiffs are trying to recover significant damages for promises of construction union cards and careers--whose CEO, James Caldwell, readily admitted he made promises--as well as unpaid training in the program and at a work site on Staten Island.

(There are 20 plaintiffs listed in legal papers, from a program that enrolled 36, but discussion in court referenced a total of 19. Background on case here.)

To recover any significant damages in this civil lawsuit, the plaintiffs must tie BUILD, now defunct, to its deep-pocketed patron as "joint employers," while lawyers representing Forest City seek to narrow the case via motions for summary judgment.

Tying BUILD to Forest City?

U.S. District Judge John Gleeson, who has a dry and measured style, wondered how a company could be responsible for a non-profit it funded, suggesting it might set a dangerous precedent. "You're saying BUILD's promise was the principal's promise?" he asked plaintiffs' attorney Matthew Brinckerhoff.

"This is not a typical situation in which a for-profit creates a not-for-profit," responded Brinckerhoff, trying to point to the questionable specifics surrounding Atlantic Yards, just as he did in the uphill and ultimately unsuccessful battle representing property owners and renters in the Atlantic Yards eminent domain litigation.

"None of our clients believed BUILD had the power to give them apprenticeships," Brinckerhoff said, regarding the coveted first-run placement in a construction union. "The entity that had the power to make good on the promise... was Forest City."

Gleeson said he was looking for a "limiting principle," asking of there's anything BUILD could have done that could be seen as not being an agent of Forest City.

Brinckerhoff suggested that, if Forest City had given BUILD money for its offices rather than free rent, "nobody would think Forest City Ratner was responsible for the lease. This is why the history does matter."

"There's a certain black-heartedness attributed to Forest City Ratner," mused Gleeson. "But there are political sins and there are legal sins."

It was the money quote in the hearing, which lasted a little more than an hour in federal court in Downtown Brooklyn. None of the plaintiffs or defendants--or executives from defendant Forest City Ratner--were in the audience.

Brinckerhoff countered that the distinction between the two entities was more blurred than is typical: "What was not happening here is that Forest City Ratner was engaging in some philanthropic endeavor, contracting with an established not-for-profit." Rather, he and plaintiffs' lawyers point out, BUILD was set up to support Atlantic Yards.

Can witness be trusted?

Another key issue, and one on which the plaintiffs surely felt stronger ground, was whether former BUILD CEO James Caldwell was "strong-arming" Forest City Ratner to change the rules for PATP graduates, as he contends in his deposition, or whether he felt had the authority to make the promises.

(Despite authorizing a pre-apprenticeship training program, Forest City asserts that BUILD's PATP was merely supposed to feed additional pre-apprenticeship training programs. But it willingly funded construction skills training, though executives said BUILD's program was supposed to only cover "life skills.")

Brinckerhoff noted that, in March 2010, before the PATP began, "a person spies on" Caldwell for a Forest City Ratner contractor and reported that Caldwell was publicly promising union jobs. The contractor conveyed it to executive Sonya Covington. "What did Ms. Covington do? Absolutely nothing," Brinckerhoff said.

He scoffed at defense counsel Harold Weinberger's claim that it was offensive to question Caldwell because he's now being paid (and defended) by Forest City. "That matters," Brinckerhoff said, detailing Caldwell's history of inconsistent testimony regarding the program.

"They're saying in June [2010] he was told he couldn't make those promises," Brinckerhoff declared. "He can say that all he wants, but we're certainly entitled to have a jury hear it. The reality is: why would he be lying if the result was going to be so catastrophic?"

That thought lingered: if Caldwell was knowingly lying to students when promising them jobs and union cards, he may not have been over-optimistic about whether he could get Forest City to ensure an on-ramp to the unions but also taking the risk of crushing the hopes of desperate people.

The PATP was a big deal, the only part of the Community Benefits Agreement that, if not funded, would trigger a specific payment of damages, $500,000 by Forest City. Caldwell's colleague Marie Louis began trying to get the PATP off the ground in 2005, the same year the CBA was signed.

It was stalled for years, and both Louis and Caldwell expressed frustration. Finally discussions get serious in March 2010, the time the arena groundbreaking began. A contract was signed in June or July 2010. The 15-week program began in August, including "life skills" classes, construction skills classes, and an ill-fated--and aborted--off-site hands-on training at a house in Staten Island.

Stretching the law to fit the case?

Though BUILD was seen as a Forest City dependent--one Forest City executive, in an email, peevishly said "THEY WORK FOR US"--at issue are the nature of their ties. Did the training program serve a "business purpose"? Could the two could be considered "joint employers"?

Defense lawyer Weinberger--representing Forest City, BUILD, Caldwell, and Forest City executives Bruce Ratner and Jane Marshall--suggested that the latter two claims were stretches.

BUILD did not perform any business purpose or gain profit, so it thus was exempt from the Fair Labor Standards Act (FLSA), the federal law that requires payment for work. New York State law, he noted, has an exemption for paying "learners" that covers ten weeks, so if the claim for wages applies, it can only cover five weeks.

"We believe the plaintiffs have not come remotely close" to proving the "joint employer" relationship, he said. Despite "a lot of rhetoric" over BUILD's history, the question, he said, was, "Did Forest City exercise functional or formal control over these plaintiffs? I think the evidence is very clear."

Yes, Forest City "hired BUILD in essence" to run the training program, Weinberger acknowledged. "But they didn't tell them how to do it."

"Obviously, Forest City wanted to make sure they were getting what they paid for," he said, "They did some quality checks." But that doesn't make them joint employers, he said.

Unmentioned was that the "quality checks," according to the record, rather inadequate.

Though plaintiffs' attorneys have tried to use a case known as Enterprise, in which a parent company was alleged to be a joint employer of wholly owned subsidiaries, Weinberger said there was no comparison. "Here we have two entities that have no legal relationship," he continued. "If funding a not-for-profit amounts to being a joint employer, that will mean a pretty dramatic change in not-for-profit law."

He noted that Forest City knew nothing about what was going on at the Staten Island site and had not been involved in choosing it. (He didn't mention that Forest City was supposed to provide space for the program, so the Staten Island site--a house where contractor Gausia Jones and his company, Orbin's Big Green Machine, were supposed to create a basement apartment--was an ad hoc decision.)

The individual defendants

"For Bruce Ratner, they allege virtually nothing," Weinberger said, noting that one meeting cited had nothing to do with the PATP.

Later, plaintiffs' attorney Nicole Salk, of South Brooklyn Legal Services, strained to suggest that Ratner "had operational control of getting community support."

Marshall, said Weingerber, "was more involved, but at the level of insuring Forest City was getting what it paid for." (That was an odd statement, given that Marshall approved a budget that included construction skills.)

Salk later responded that Marshall and her subordinate, Covington, made decisions about implementation of the PATP.

As to plaintiffs' claims that Forest City was the primary beneficiary of the PATP, Weinberger said the plaintiffs were the beneficiaries, since almost all said acknowledged they'd gotten some benefit from it.

Salk said "we think evidence shows the primary beneficiary" was Forest City.

Weinberger said eleven of the plaintiffs don't have a claim against Marshall and Forest City for promises of union jobs, because they admit they don't remember what Marshall said at the PATP orientation or even whether she was at the meeting.

He acknowledged there's "a lot of confusion about language" in the contract. He said that Forest City had negotiated to deliver people from BUILD's program to 200 slots in established union pre-apprenticeship programs. But if the BUILD program was actually a pre-pre-apprenticeship, they didn't use that term.

The Jones defense

Michael Tremonte, representing Jones and his company, also argued for summary judgment. Jones and his company were not employers, Tremonte said, since he was an at-will employee of BUILD who had no role in operating the PATP.

In fact, he said, BUILD unilaterally decided to end the hands-on training prematurely, after complaints from the students.

Regarding claims of unpaid wages under the Fair Labor Standards Act (FLSA), he said, an employer must have $500,000 in annual revenue, and Jones's company falls way short. Though plaintiffs try to conflate revenue from Orbin's and BUILD with that of much larger Forest City Ratner, that would require "operational interdependence," he said.

Beyond that, he said Jones had not been unjustly enriched, since plaintiffs had no expectation of compensation but rather had expectation of union cards.

In response, Salk said Jones did supervise the Staten Island worksite and gained by not paying the trainees, who did work that his (dismissed) workers would have done.

What was BUILD for?

Responding to Weinberger's argument, Salk said it was "very much disputed" that BUILD not-for-profit criteria, since it was "essentially created and funded for the purposes of this project. We would argue that it absolutely had a business purpose... to get the Atlantic Yards project built."

Forest City, she noted, employed Randall TourĂ©, who recruited Caldwell to support the project and join the fledgling, unincorporated BUILD.

She gained some ground by noting that defense attorneys "seem to ignore their own evaluation" by consultant Ritchie Tye, hired by Forest City, which found, as noted in legal papers, "that it appeared that FCRC financially compensated the organizations for their potential to secure community support for the Atlantic Yards project, and not for their capacity to fulfill the programmatic goals in the CBA."

At this point, Gleeson first said he was "having a little trouble identifying a limiting principle," since funding a not-for-profit surely doesn't make the two entities joint employers.

"It is all about control," Salk said, pointing to Forest City's close role in the minutiae of the PATP, denying a stipend in the budget and helping shape the curriculum. "It's not like other cases where they can do what they want to do," she said.

After Caldwell's promises backfired, she added, Forest City was very involved in trying to find jobs--albeit not union construction jobs--for the trainees.

Who to trust?

Weinberger tried to undermine the claims that Caldwell had reason to believe he was authorized to make promises of union jobs and careers. "You can't have stronger evidence that Mr. Caldwell's testimony" denying that, he said.

The response that Caldwell's lying, he added, is not enough to defend against a motion for summary judgment.

Brinckerhoff countered that the defense entire motion "is premised on Mr. Caldwell's testimony." And while case law does say belief that someone's lying is not enough, the plaintiffs have far more evidence, he said.

"He is all over the place in terms of what he believed at the time," Brinckerhoff said, pointing to Caldwell's signing in June of a contract that said participants would leave the PATP for apprenticeships. (Contract language is murky.)

That led to Gleeson's question about whether BUILD's promise could be Forest City's promise, and the exchanges with Gleeson noted above.

Brinckerhoff closed by saying that "we have other impeachment evidence" that would cut into Caldwell's credibility. He cited a video, which appeared on this blog a day after the case was filed in November 2011 and again on Thursday, in which Caldwell flatly denied he made promises--even though he later admitted doing so.

Weinberger, given a few moments for rebuttal, noted that Salk didn't address the issue of Forest City controlling the employees.

Nor, he said, was there evidence Forest City had told Caldwell to make the promises.

Going to a jury?

Brinckerhoff, at one point, expressed incredulity that a jury wouldn't get to "hear any of this."

And, given that defense lawyers are not trying to dismiss claims against BUILD, he noted that at least part of the case would be going to a jury.

As I wrote, it's unlikely the case will ultimately go to trial. Once Gleeson narrows the case--either slightly or significantly--the parties will have a better sense of the case's value, and revisit the issue of settlement, an issue they've already discussed.

It's hard to imagine that Forest City would want Caldwell to go on the stand and face cross-examination for his series of conflicting statements. And some of the plaintiffs, who in depositions display fuzzy or untrustworthy memories, may not be the best witnesses, either.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlantic Yards/Pacific Park graphic: what's built/what might be coming (post-dated pinned post)

Click on graphic to enlarge. This is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change, and the project is already well behind that tentative timetable.


Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…