Building Trades, New York, topslot

Ironworkers Call Out L.I. Hospital for Hiring Company with a History of Wage Theft

October 16, 2020

By Steve Wishnia

Ironworks rally outside Mount Sinai South Nassau Hospital.

OCEANSIDE, N.Y.—Under the rubbery scowl of Scabby the Rat, about 100 union ironworkers protested outside Mount Sinai South Nassau Hospital here Oct. 13, demanding that the hospital stop using a Brooklyn subcontractor with a history of cheating workers to build the steel framework for its new utility plant.

The hospital is using $158 million in Federal Emergency Management Administration funds to cover more than half the cost of the utility plant and three other projects. It says the projects will “greatly bolster the hospital’s ability to provide uninterrupted vital medical services to the community, even during major disasters like Superstorm Sandy in October 2012.” 

“FEMA grants usually require the job to become a prevailing-wage job,” explains Ironworkers Local 361 vice president/business agent John Cush, but South Nassau Hospital received the funds as a “Public Assistance Grant” exempt from prevailing-wage requirements.

Instead, general contractor E.W. Howell hired two nonunion subcontractors, Lyndon Steel NC and FJM-Ferro, to fabricate and erect the project’s structural steel. FJM-Ferro, which advertises “a fully equipped and experienced non-union field labor force,” was barred from working on publicly funded projects in New York State from 2011 to 2016 after it pleaded guilty to felony charges of falsifying business records in order to avoid paying prevailing wages. Its chief operations officer, Joseph Casucci, pleaded guilty to failure to pay wages, a misdemeanor.

Casucci and another ironwork contractor on a National Guard training center in Cortlandt Manor had been arrested in 2010 and charged with concocting a scheme in which they wrote paychecks to workers at prevailing-wage rates—$55.90 to $85.90 an hour—and reported those numbers to the state. But they had actually paid them in cash at $15 to $18 an hour, cheating them out of about $425,000. 

Under the plea deal, FJM-Ferro and Casucci agreed to pay the workers the $425,000 plus about $100,000 in interest; $131,000 to the state in civil penalties; and $75,000 to the state Department of Labor to cover outstanding unemployment insurance and penalties for workers they’d paid in cash. 

The union contractor’s bid for the steel-erection work at South Nassau was $400,000 more than FJM-Ferro’s, according to Cush and Local 361 business manager Matthew Chartrand. In June, Cush says, Local 361 and Operating Engineers Local 138 offered to contribute $200,000 from their Target Fund to reduce the difference, but hospital management said that would still be $160,000 short and refused to make up the difference. 

All other work on the $93 million utility plant is being done by union contractors, according to Cush. The steel work will cost about $2 million. Mount Sinai South Nassau management said in a statement that approximately 80% of the work on all four projects will go to union contractors.

“The hospital has closely followed all appropriate federal procurement guidelines, which call for open and competitive bidding on each job to ensure that the dollars are spent efficiently,” it said. “The hospital’s contractor, E.W. Howell, did have discussions with union representatives earlier this year, but it is the hospital’s understanding that agreements have not been reached. As stewards of taxpayer and community funds, the hospital is obligated to build these projects in the most cost-effective manner possible to preserve scarce resources and maximize benefit for patient care.”

What is galling, says Chartrand, is that after the 9/11 attacks, the Ironworkers made a deal with the Mount Sinai chain to send its members to their clinics. “They’ve accepted millions of dollars from our health fund, but when it comes time to put our members to work, they’d rather hire a contractor that was convicted of stealing over $400,000 in wages from their own workers,” says Cush.

“FJM-Ferro is notorious for doing stuff like this,” says Eddie Jorge of the union-backed New York Community Alliance for Workers Justice. The company’s biggest advantage, he explains, is that it knows what union contractors will bid, and can undercut those numbers by 20% by paying lower wages.

FJM-Ferro has worked on numerous major developments around the city over the past several years, including the massive Essex Crossing project on the Lower East Side; the 84-story tower on “Billionaires’ Row” at 111 West 57th St., built by the nonunion JDS Development Group; and Brooklyn Navy Yard Dock 72, a 16-story office building where 12 nonunion ironworkers walked off the job in 2017, citing dangerous working conditions, poor pay, and lack of benefits.

“They were getting robbed,” says Jorge. Since the 2010 indictment, he adds, FJM-Ferro has tried “to stay away from prevailing-wage jobs,” but it continues practices like paying workers in cash without extra for overtime and hiring them as independent contractors, which enables it to avoid paying for unemployment benefits, Social Security, and workers’ compensation.

The 12 workers who walked off the Navy Yard job joined Local 361 and Ironworkers Local 580, says Jorge. The Community Alliance for Workers Justice filed a complaint with the National Labor Relations Board accusing FJM-Ferro of retaliating against workers for collective activity, including threats, surveillance, and firing them. The company, represented by the “union avoidance” specialist law firm Jackson Lewis, settled the complaint out of court in 2018.

Local 361 has sought aid from elected officials, including Sen. Charles Schumer, Reps. Kathleen Rice and Thomas Suozzi, and state Sen. Todd Kaminsky, but “the only one that made an effort to help out the situation was Tom Suozzi, and even he, to this point, has been unsuccessful to our cause,” says Cush. “Four months later, we are still outside the hospital with signs, handbills, and the rat.”

The union plans to continue the protests. “We’re looking to ramp things up as much as possible,” says Chartrand.

October 16, 2020

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