WHO IS RELATED?
Related engages in business practices that endanger the timely and responsible completion of work on their projects and expose their partners and financiers to entanglements in litigation and negative media. Recent hallmarks of some of Related’s development projects, particularly at Hudson Yards, include allegations against construction firms of sexual harassment and racial discrimination, unfair labor practices, and fraudulent use of alter ego firms to evade paying union benefits. One of Related’s own business entities is involved in a federal investigation separate and apart from any of the preceding.
Related has built a reputation for producing a high-quality construction product while using union contractors whose workforce is highly skilled and trained. The quality and safety standards that union-members have brought to past Related projects enables the firm to sell future investors, including government agencies, a false bill of goods. Using a reputation built on union quality, Related intends to use an inferior open-shop model. As described in detail in this report, open shop contractors used on Related projects, including projects in Hudson Yards, introduce exploitation and danger to Related projects.
WORKER FATALITIES
Subcontractors on Related Companies’ projects have histories of worker and end-user fatalities on other projects. These companies include Northeast Interiors, Park Side Construction, Rock Group NY Corp, and North American Elevator. These deaths include a Park Side worker crushed to death in 2014 by a concrete slab; Rock Group NY Corp was penalized by the Department of Buildings when Luis Matta was fatally struck on April 21, 2016 by a wooden plank that fell from the 10th floor of 421 Hudson Street; Northeast Interiors employee Pedro Basilico died on the first floor of a demolition project at 25 West 38th Street when five floors of debris collapsed on him and coworker Kairo Garcia, who was rescued in a three hour emergency operation. North American Elevator was reportedly contracted to inspect the elevators in December 2016 when Stephen Hewett-Brown was pinned between the ceiling of an elevator cab and the third floor at 131 Broome Street and died.
WAGE THEFT
Some subcontractors used by Related Companies have histories of wage theft allegations. For example, Spring Scaffolding settled a class action lawsuit alleging wage theft with up to 195 workers for $560,000 who were employed by Spring Scaffolding between 2014 and 2006. An ACS-NY worker filed a lawsuit against ACS alleging the firm failed to pay him overtime, allow breaks, or provide paystubs. Before the case could be adjudicated, ACS filed bankruptcy and the action was stayed. Wage theft allegations against Gilbane span the country, including a lawsuit over the company’s alleged failure to pay the prevailing wage in Maryland, and a class action lawsuit in California against Gilbane alleging failure to pay overtime rates. Workers brought an on-going class-action lawsuit against Park Side Construction in 2016 alleging that they regularly worked 55 to 60 hours per week, but were never paid an overtime premium.
FRAUD
Some contractors hired to work on Related Projects have histories of fraudulent and criminal activity. While defending their company in an unrelated case, Advanced Contracting Solutions(ACS) admitted to acts that amount to insurance and visa fraud. Park Side principal Salvatore Pugliese was sentenced to two years in prison in connection with his alleged involvement in a violent criminal organization known as the “Giannini Crew” in 2001. Government officials in California, Arizona, Connecticut and Ohio have faced ethics scandals involving Gilbane. One incident has been called “the Largest Public Corruption Case of its kind in San Diego County” and in another 11 employees in Maricopa County, Arizona were placed on administrative leave.
SEXUAL HARASSMENT
Female construction employees of Trade Off describe a hostile workplace where sexually harassing behavior is routine. Some of the worst examples of this occurred at 55 Hudson Yards, where a worker claims her supervisor exposed his penis and solicited her for sex on multiple occasions. Others reported harassment included inappropriate sexually demeaning comments, and cat calling.
INVESTOR RELATIONS
Subcontractors on Related Companies projects create a fiduciary risk to investors. Many Contractors that work on projects developed, managed, and financed by Related Companies have histories of endangering and exploiting workers. In addition to the unethical decision to potentially expose workers to these conditions, these practices open risk of law suits, work stoppages and regulatory enforcement actions which all endanger the timely completion of construction work.
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