Building Trades

LiUNA Appeals Directly To Lenders For Construction Reform

March 31, 2015
By Joe Maniscalco

LiUNA members rallying in New York City.

LiUNA members rallying in New York City.

New York, NY – This week, hard-pressed construction workers who have for years borne the brunt of widespread industry abuses, will be calling on the largest and most powerful lenders in the country to adopt new standards that could, if accepted, finally rein in bad contractors.

The unprecedented Washington, D.C. forum bringing together Laborer's Union of North America [LiUNA], with Mass Mutual, Cornerstone and other members of the construction lending industry on March 31, will closely look at the JDS Development project at 626 First Avenue in Manhattan, as an example of why change is needed. 

Crucial financing provided by Mass Mutual, Cornerstone and other lenders allow high-end developers, including JDS Development, to pull off massive, multi-million-dollar construction projects. At the same time, however, those same developers share a long history of employing sub-contractors accused of some of the most heinous worker violations on record – everything from wage theft to sexual harassment on the job. 

One such contractor – the Thomas Auringer family of companies – is facing a class action lawsuit by low-wage employees  here in New York City, alleging systematic violation of minimum wage and overtime laws.

"We think that once people recognize that the issues go a lot deeper than union versus non-union, they will be spurred into action," Erin Hutson, LiUNA director of corporate affairs, told LaborPress. 

Abused workers who have allegedly suffered at the hands unscrupulous contractors have already appealed to the City of New York, elected officials and the public, to back industry changes. But this is the first time they will have an opportunity to directly call on the biggest lenders in the industry for help.

"Most people still haven't heard about what's going on," Hutson added. "Our hope is that through education, there will be support for new industry standards."

According to supporters, the model for new responsible lending — one that protects workers from wage theft, fraud and other NLRB [National Labor Relations Board] violations — consists of a single page, and could be written directly into new loan agreements immediately. 

Nevertheless, to be truly effective, support from the biggest players in the lending construction industry including Mass Mutual and Cornerstone, is needed in order to preclude unscrupulous contractors from trying to secure loans from non-participating lenders.

"We have to start at the top, or else contractors will just go down the block," Hutson said. 

March 31, 2015

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