Union says Trade Off owes it $100M in double-breasting scheme

New lawsuit alleges company is alter ego of union company

Jan.January 28, 2019 08:30 AM

(Credit: Pixabay)

The Mason Tenders District Council is accusing Long Island-based construction company Trade Off of cheating it out of more than $100 million in payments to its benefit funds.

In a lawsuit filed in federal court, the district council alleges that Trade Off and Trade Off Plus are merely alter egos of Exterior Wall Building Consultants, a company that hires the laborer’s union Local 79, the district council’s largest union. This violates EWBC’s agreement with the district council because Trade Off should’ve been contributing to its funds since 2012, according to the complaint.

Running both union and nonunion construction operations — a practice known as double-breasting — isn’t illegal outright. But collective bargaining agreements often contain clauses that aim to prevent the practice. In this case, the Mason Tenders District Council claims that its agreement with EWBC required affiliated companies that perform the same work and have common ownership to pay into its pension, health and welfare funds. The complaint claims EWBC and Trade Off are affiliates of Construction & Realty Services Group, which shares employees with the two companies, provides general laborers to both and is owned by Ronald Lattanzio. A spokesperson for EWBC called the lawsuit “frivolous.”

Ronald Lattanzio (Credit: LinkedIn)

“It’s sad to see that Local 79 and the Mason Tenders District Council are willing to target union workers and treat them as nothing more than collateral damage in a failing campaign to stay relevant,” the spokesperson said in an emailed statement.

In the past year, there’s been a lot of bad blood between Trade Off, owned by Lattanzio, and Local 79. The two have fired off several lawsuits against each other. Local 79 filed complaints with the National Labor Relations Board against Trade Off and former employees have accused Trade Off supervisors of sexual harassment in complaints filed with the Equal Employment Opportunity Commission. The company, in turn, has accused the union of harassing its employees and conspiring to put it out of business.

The latest lawsuit accuses Lattanzio, who testified in the early 2000s that he bribed Department of Buildings officials while working as an expeditor, of creating “a web of interrelated companies” to again use his DOB contacts to “enrich himself.”

“This is just another attempt in a long-line of frivolous lawsuits executed by the Mason Tenders as part of a conspiracy to stifle competition and attack anyone who gets in the way of their attempted monopoly of the construction industry,” Lattanzio said in a statement. “We believe there is room for all types of companies to thrive, but when the competition reduces itself to baseless lawsuits, intimidation and harassment to scare off competitors, we draw the line.”

Mike Prohaska, business manager for Local 79, called the lawsuit an “encouraging step.”

“Local 79 has always viewed Mr. Lattanzio’s operation of Trade Off as a crass effort to make money off the backs of a highly exploitable community of mostly formerly incarcerated workers, including by depriving them of the collective bargaining protections people paid under the affiliated EWBC receive,” he said in a statement.

The legal fighting between Lattanzio’s companies and Local 79 come as union groups continue to clash with Related Companies over its use of nonunion labor at Hudson Yards. Since 2017, the Building and Construction Trades Council has held a series of protests against Related for its use of nonunion labor — including Trade Off — at the megadevelopment.

The Mason Tenders District Council’s lawsuit is also the latest case in the city involving dual-shop contractors, an issue that’s become more prevalent as the competition between union and nonunion construction companies intensifies. In 2017, concrete contractor Navillus was ordered to pay $76 million to settle claims that its nonunion affiliate violated union agreements. In August, that judgement was vacated and the settlement amount was cut to $26 million.

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