Doing business in New York

[regexcellent]

We've had a number of discussions about unions in this forum but I think this story about a particularly excellent restaurant which I enjoy here in Rochester pretty much sums up the issues surrounding them and why they shouldn't exist.

http://stickylipsbbq.com/stickylips/archives/507

[hide][top]So You Want To Do Business in New York?

I’d like to share the story of my recent challenges with the New York State Labor Department.
For my second Sticky Lips BBQ restaurant, I purchased a building that was the old Road House Grill on Jefferson Road. This is situated on property that is controlled by the Genesee Valley Regional Market Authority, which is a New York State Authority. I own the building but lease the land from the Authority.

It took me a year and a half to build the new Sticky Lips BBQ Juke Joint, and it is a real showpiece. That took everything mentally, physically, and monetarily that I had. I did not use any state, local, or federal money to build it.
Halfway through the project, I received a visit from the carpenters union, who was looking for work. I was nice to the guys, but told them that I had my own independent contractors, of whom many are my personal friends. I know that the construction industry has been slow, but being that mine was not a state or publicly funded job, I wondered why they would come to a small job like this. The Sticky Lips construction was relatively small compared to schools, hospitals, and public buildings that are usually associated with union jobs.
Within two days after talking with the union reps, there was an OSHA inspector camped out across the street with a telephoto lens just waiting for an infraction to happen. After spooking the contractors, this slowed our progress for a while.
About a month later the electrical union reps stopped by and were working for work. Once again, I said that I had my own guys and did not need their help. (I guess they didn’t remember that eight years ago, when we built the first Sticky Lips, I did hire an electrical union contractor, who was a personal friend.)
Once again, within two days, Bob Bibbins from the New York State Department of Labor showed up. He informed me that he wanted a list of my contractors and that we had to pay prevailing wages on this job. During our initial negotiations with the GVRMA, we were not told about the prevailing wages issue.
My first question is: why and when did these two government agencies start doing the dirty work for the construction unions?
The restaurant opened in the first week of October, 2011. I paid all the contractors and everyone is happy. Now my contractors have just been served subpoenas for a May 16th hearing.
Bob Bibbins pressured me to go online to register this project with the labor department, which would automatically commit me or my contractors to pay prevailing wages. He said he would start the violation from the date he showed up, but wouldn’t put that deal in writing. I did not submit to this online filing. My lawyer at Woods Oviatt Gilman gave Bibbins our stance that we own the building privately and we are only making improvements to the building and not the land which it sits on. I insisted that Bibbins tell me who was really behind this pressure that the Labor Department was putting on this project. I asked him point blank if it was the electrical union. In a round-about way, he let me know I wasn’t too far off.
According to Public Work Article 8, Section 220, N.Y.S. Labor Law, part A: “What is a Public Work? In determining whether a construction project is a public work, two conditions must be fulfilled….”
Out of the two, the one that would apply is #2: “The contract must concern a public work project. To be public work, the project’s primary objective must be to benefit the public. Ownership (public or private) is also a factor in determining whether a project is public work.”
More simply, Webster’s II New College Dictionary defines public works as “construction projects, as highways or dams, financed by public funds and constructed by a government for the general public.”
Also from the law, part B: “Who makes the determination whether a project is a public work? Generally, projects for construction, reconstruction, or maintenance done on behalf of a public agency (entity) are public work. In instances where there is a question regarding whether this condition exist, the Bureau of Public Works will make a determination based on the project details.”
As I discovered, the Bureau of Public Works and Commissioner of Labor are both part of the N.Y.S. Labor Department, and in fact have offices on the same floor. So who there can make an unbiased decision on what is a public work?
My take on this Article 8, N.Y.S. Labor Law is that the primary objective is to benefit a private entity not the public. This alone should exempt Sticky Lips BBQ or myself from the prevailing wage.
In the meantime, Bibbins is going to push this and see that I pay these prevailing wages. He has subpoenaed the contractors, who have to show up May 16^th and attend before Ralph Gleason, public work wage investigator. He has been designated by the Commissioner of Labor to conduct an investigation concerning Sticky Lips BBQ, “an entity subject to an investigation by the New York State Department of Labor concerning a public work project pursuant to the provisions of Article 8, New York State Labor Law.”
All I did was to put many construction workers to work. I bought hundreds of thousands of dollars of construction materials from local companies. At this restaurant, I have created over 120 good-paying jobs. The business will collect and pay hundreds of thousands dollars in sales, property, employment, and other taxes. Between my three restaurants, I have over 200 employees. I am contributing to the state, I am creating jobs. I am the type of businessman the state wants. I feel like I am being attacked by these two unions, who have put pressure on the N.Y.S. Labor Department to see this through.
Not only do I need to reinvest my profits to grow my business, but now I have to pay thousands of dollars in legal fees and worst case scenario – if the Labor Department wins, many more thousands for this prevailing wage issue.
Is this the type of business practice I should expect from New York State as I try to grow my business in the upcoming years?
Howard Nielsen

Because this man decided to hire his friends as contractors, for a wage that they deemed totally acceptable to do work like electrical wiring and construction, completely within code, the unions started harassing him, and when that didn't work the unions appealed to sympathetic bureaucracy in Albany to harass him for them. Now this man, who by all rights did nothing wrong, is facing an expensive lawsuit for not paying "prevailing wage" (though we all know his real crime is not hiring the Rochester unions). It's putting his business in jeopardy.

This is outrageous.

I'd like to add, by the way, that this is getting a huge response in the Rochester area, with loads of people writing letters to their state representatives.

[Dinner]

That does seem to be an abuse of the system.

[Zoetstofzoetje]

crony-ism is everywhere. why adapt to changing circumstances, if you can manoeuvre the business environment to adapt to you?

thankfully entrepreneurs like the one above stand up for themselves

[Hauldren Collider]

Wow. This is insane

[Lorizael]

This is an argument against corruption generally, but not labor unions specifically. Additionally, it might be nice to see things from another point of view.

[rah]

Additionally, it might be nice to see things from another point of view.

Corrupt Union official. That bastard is doing work without using the union. We can't have that. It's too bad we can't just have him knocked off like in the old days. (or break a few legs or start a fire).
Fortunately we contribute to many politicians that are corrupt enough to do our dirty work for us. It will even look legal. Thank god for America.


And that's my biggest problem with unions. Originally they served a great purpose but eventually obtained enough power that the became corrupted, and mob influenced. While a lot of that has changed, the corruption still exists. (pension fattening in Illinois recently comes to mind) Unless you get rid of it, we're better off without unions.

[rah]

Upon further review, some might say the same of big business and there would be some truth in that.
But I remember when I was younger and working as a non-union carpenter. We were doing a small job and some union reps showed up (if they had ever held a hammer before it was for breaking knee caps) and tried to intimidate us off the job. When we refused to quit the work site, we were roughed up. I had grown up hearing how the Unions were the heroes of the little people. This was my first up close experience and was the beginning of my bias against them. Having studied history, I was well aware of all the positives they had accomplished for the emerging middle class but the reality got quite ugly. There are some unions that probably still provide some value, but when I see a union action so stubborn that the company that employs them can't afford to do business anymore which costs the union jobs, I just shake my head. Or unions that fight any evaluation method to protect non performing teachers. Heck, if I don't do my job well, I'd be on the street in a second. And I'm sure there are exceptions out there, but overall I can't justify them.

[gribbler]

If he owned the land instead of leasing it from the government, he'd be fine, right?

[rah]

Not sure of that legal aspect but I have a sneaking suspicion that if not that it would have been something else. IF it's anything like Chicago and you're not paying off inspectors they will find "CODE" violations whether they exist or not. Or not approving blue prints and such just to cause delays that will cost you money.

[Ben Kenobi]

I had grown up hearing how the Unions were the heroes of the little people. This was my first up close experience and was the beginning of my bias against them.

When I went to school - I was assigned student notetakers by the disability organization. They would take submissions, wade through them, and fill out the application from those who applied. I would never meet the notetaker and they would never meet me. After my first year, I said, screw that - let me pick my own notetaker, I'll get them set up and then you can pay them.

I wanted to have the same person in all of my classes so that instead of dealing with 5 people, I had to deal with 1. No go. Union said - we can't pay her more than 5 hours a week notetaking. Union contract. Find 5 people or go without. I fought them all year, and eventually they decided to let her take notes for me for all the classes. They never did pay her what she was owed for the work she did, and they kept bouncing checks on her. She would come to me to complain and I'd have to go back to the office.

I was better off doing it all myself then dealing with the union bullshit. They were harassing me because they wanted to sift through the applicants themselves and decide who would get paid rather then me doing that work. That way they could pick and choose their own friends.

[The Mad Monk]

Labor union suing Obama's Labor Department byJoel Gehrke Commentary Staff Writer
Share on emailShare on printFollow on Twitter:Washington, D.C. -- Alex Bastani, president of the local 12 chapter of the American Federation of Government Employees (AFGE), told union members that they are filing a complaint against the Department of Labor that may develop into a class action lawsuit.

AFGE is affiliated with the AFL-CIO, a mega-union that has endorsed President Obama, but parking rate increases at DOL have Local 12 up in arms against the Obama administration.

"Management has made it clear that it intends to move forward on July 1st with the parking increase without the involvement of the Union and despite any hardship expressed by the employees," Bastani wrote to union members in an email obtained by The Washington Examiner.

The union is angry about losing a $35 per month parking fee as the DOL turns management of its parking spaces over to a private contractor. "The eventual contractor will charge 'slightly below' the average Washington rate of '$220 to $260/month,'" The Washington Examiner's Paul Bedard explained, per Labor Department official Al Stewart's announcement of the change.

"We will be filing a complaint with the Federal Service Impasses Panel requesting an order that the United States Department of Labor be compelled to bargain with us over its decision to contract out the parking, [and the] increase in rates," Bastani told members.

Local 12 will also attempt to haul the Obama administration before the Federal Labor Relations Board, and may file a civil lawsuit against the Labor Department. "We will also explore whether a class action can be filed pursuant to the Rehabilitation Act for those employees who are disabled and park in the Frances Perkins Building Garage," Bastani wrote.

In the meantime, they will organize more public protests.

http://campaign2012.washingtonexamin...artment/558766

[DaShi]

So?

[Dinner]

Yeah, that was my reaction too.

[DanS]

I've always wondered why business hasn't fought back with public service organizations -- e.g., somebody like the ACLU for businesses. Sue the pants off of these unions if they do stuff like this.

[dannubis]

I didn't know you could "sue" unions.

[Elok]

I didn't know you could "sue" unions.

Why not? You can sue pretty much anybody in this country AFAIK.

[dannubis]

Because, the way I understood it is that unions are no legal entity (something my be lost in translation here but what I mean with that is that the union itself can't be held leaglly accountable for damages done).

If you can show that some members of the union were engaged in illegal stuff you can charge them personally but not the union itself.

This is how it works here.

[Imran Siddiqui]

A little bit of, before we fly off the handle (too late for some, I see):

http://rochester.ynn.com/content/top...ment-of-labor/

- Under New York’s Constitution and Labor Law, contractors and subcontractors must pay the prevailing rate of wage and supplements (fringe benefits) to all workers under a public work contract. Employers must pay the prevailing wage rate set for the locality where the work is performed.

- There are two conditions which determine whether a construction project is public work:
(1) A public entity must be a party to a contract involving the employment of laborers, workers or mechanics; and
(2) The contract must concern a public work project.

- In the present matter, public documents show that Sticky Lips BBQ constructed a building on publicly-owned land. Specifically, the property is owned by the Genesee Valley Regional Market Authority, which is a public entity. Because the building was constructed on publicly owned land and because the agency received a complaint, the Department of Labor (as it is required to do under law) simply advised the owner that the construction project may well be subject to prevailing wages. There has been no decision as to whether or not prevailing wages apply in this case and the matter is under review, as the Department continues to gather information. Further, the Department DOL has not been in contact with OSHA in regard to this matter.

So basically the state just informed him that they MAY be subject to prevailing wages and no decision has yet been made one way or the other. In addition, as pointed out, the land is owned by the State of NY, and the state may consider improvements on its owned land to all be considered a "public work" (as it improves the value of the land).

The article also acts like subpoena to the contractors is some huge, massive thing. Most likely it was for documents, such as their contracts to see if they are subject to prevailing wages. The state simply seems like it is doing a routine investigation.

[Kuciwalker]

Because, the way I understood it is that unions are no legal entity (something my be lost in translation here but what I mean with that is that the union itself can't be held leaglly accountable for damages done).

If you can show that some members of the union were engaged in illegal stuff you can charge them personally but not the union itself.

This is how it works here.

I can't believe that's true. There is a contract between the union and the employer. That can only happen if the union has some independent legal existence ("union personhood"). I believe in the US unions are actually incorporated, though I'm not certain.

[Kuciwalker]

Yes, Imran, that is the most pro-union spin you can put on it.

[dannubis]

the dutch term is "rechtspersoonlijkheid".

Translation:

http://www.mijnwoordenboek.nl/vertaa.../rechtspersoon

This means, as far as the judiciary system goes, they don't exist.

[Hauldren Collider]

A little bit of, before we fly off the handle (too late for some, I see):

http://rochester.ynn.com/content/top...ment-of-labor/



So basically the state just informed him that they MAY be subject to prevailing wages and no decision has yet been made one way or the other. In addition, as pointed out, the land is owned by the State of NY, and the state may consider improvements on its owned land to all be considered a "public work" (as it improves the value of the land).

The article also acts like subpoena to the contractors is some huge, massive thing. Most likely it was for documents, such as their contracts to see if they are subject to prevailing wages. The state simply seems like it is doing a routine investigation.

You are a tool, Imran. I love how you managed to spin this as something routine when it obviously isn't routine, and would not have happened if the guy had hired the unions.

[gribbler]

How the hell do you know that? The only point of view you've been exposed to is that of the guy building the restaurant. It could have easily been a routine inspection of construction on public property.

[Imran Siddiqui]

Indeed. I love it when people attempt to assign nefarious ends to relatively routine investigations. After all, working for the US DOL, we're required to investigate when a service provider tells on their clients, and in that investigation we may subpoena the records of the third party investigators and go to the office and look at their books - but in the end there may be nothing there.

The union told on the company, so what? The company is leasing the land from NY State and there may be prevailing wage concerns. The State Agencies appear to be simply looking into it at the moment.

[loinburger]

You are a tool, Imran. I love how you managed to spin this as something routine when it obviously isn't routine, and would not have happened if the guy had hired the unions.

You mean the unions wouldn't have complained if the guy had paid prevailing wage? Unbelievable.

[Felch]

Indeed. I love it when people attempt to assign nefarious ends to relatively routine investigations. After all, working for the US DOL, we're required to investigate when a service provider tells on their clients, and in that investigation we may subpoena the records of the third party investigators and go to the office and look at their books - but in the end there may be nothing there.

The union told on the company, so what? The company is leasing the land from NY State and there may be prevailing wage concerns. The State Agencies appear to be simply looking into it at the moment.

If I understand you correctly, this is not an isolated incident. Instead, government lawyers at both state and federal levels routinely harass and intimidate innocent Americans in order to advance the narrow interests of politically connected groups. That's deeply disturbing.

[Imran Siddiqui]

Is it better if the government ignores people claiming a potential violation of state and/or federal law? I'm positive that would go over well.

[Felch]

It would go over great with me.

[Imran Siddiqui]

That'd work up until you were wronged and couldn't afford your own lawyer. I see it all the time. The most ardent anti-government people are the ones who tend to call up government agencies yelling about violations of the law by their employer, etc.

[Felch]

Is Imran calling me a snitch?