ARCO Construction Cos., the large contractor that does a lot of concrete design and construction work, has grown its New England operations by two employees and about $10 million in revenue in 2018 to a level of roughly $300 million. dollars in annual regional income. Much of the growth is due to the efforts of Jason Grant, Regional Office President, and George Green, Vice President.
For several years, however, ARCO has been the target of a campaign to discredit the company and its reputation by two Boston-area workers who ARCO accuses of interfering with customers and costing the company $73 million in revenue from a single project. The fight has involved complaints of unfair labor practices by the union and a defamation suit against the union by ARCO.
A state Superior Court judge in Boston recently dismissed ARCO’s claims for defamation, tortious interference and unfair trade practices, but the contractor says it is appealing.
As the union share of the construction market fell sharply since the 1960s, unions have often used lobbying campaigns, mainly against open shop employers. ARCO, based in St. Louis, says it is a signatory to union agreements with other trades in other regions, though not in New England, and uses both types of subs on its New England projects.
The Boston workers’ campaign also involves a legal battle at the federal level.
Between May 2023 and May 2024, ARCO and the workers’ union were parties to four National Labor Relations Board charges of unfair labor practices involving issues other than those in state courts. The contractor says that in each one he prevailed; Labor counsel for the unions could not be reached for comment.
In dismissing the contractor’s state court civil suit, the state court judge said the labor board’s case “gets state law even where the two merely conflict” and that the unions’ conduct in issue in the civil suit is “within the regulatory scope of federal legislation”. labor law rather than that of the state police power”.
At the heart of the defamation and contractor interference lawsuit is the workers’ campaign last summer that involved sending ARCO customers copies of Facebook posts made by Green 13 years ago when he was at the high school. The posts contained sarcastic comments tinged with racism, sexism and insults to other groups. After sending the messages to ARCO customers, the union demanded that customers take action.
Michael Gagliardi, business manager of Local Obrers 175 and leader of the campaign, noted in an interview that his local is “majority minority” and says the issue is related to the policies of diversity, equity and inclusion.
ARCO, Gagliardi claims, has or should have a DEI policy “and it didn’t follow it or didn’t verify it” Green.
Gagliardi characterized Massachusetts “as a state that cares about DEI,” and that those DEI principles should apply to developers who receive support for their investments from the state.
In its lawsuit filed last year in state court in Boston, ARCO claimed the union effort was “designed to intimidate ARCO and its customers, harm ARCO’s community standing, and take strong economic opportunities away from “ARC”.
“Defendants have demonized ARCO and antagonized its current and potential customers long enough,” the lawsuit stated.
Among other things, ARCO claims the union is making it appear as if ARCO or its clients are endorsing the long-ago Facebook posts and “falsely associating ARCO with Mr. Green’s alleged social media posts from 2010 and 2011 “.
Ended projects, lost revenue
One customer, according to ARCO’s lawsuit, ended its “engagement with ARCO on a project in Franklin, Massachusetts that deprived ARCO of millions of dollars in revenue.”
The suit alleges that another of ARCO’s clients rescinded its commitment “on a project valued at approximately $73 million.”
After the union sent the publications to ARCO customers and then sent follow-up letters or emails demanding action from the customers, ARCO sued the union in state court.
ARCO Construction Cos., based in St. Louis, ranks No. 17 among ENR’s top 400 contractors, with $6.64 billion in revenue by 2023.
The contractor’s New England regional office has been a remarkable growth story.
By the time it opened its New England regional office, it had already done a lot of work in the area for clients such as FedEx, Performance Food Group, DHL and Scannell Properties. The area portfolio was largely industrial when the office opened, but has since expanded to include numerous new clients.
When an ARCO customer did not respond to the union’s mailing of a letter and flyer about Green’s Facebook posts, Gagliardi wrote to the company that “since we have not had any response from you regarding information we sent you and having started making placards in your Boston office, I’m going to assume you’re aware of vile statements, labor practices, and wage violations, to name a few.”
“I will be writing to investors about these issues and your lack of response as we see this as tacit approval of the problems we are flagging.”
ARCO also uses Union Subs
ARCO, in its statement to ENR, said it has “strong relationships with unions across the country” and that “certain ARCO divisions have union agreements in place at various locations with specific unions/locals.”
Union agreements are made on a case-by-case basis, the company said, and ARCO’s New England division has no union agreement in place.
“The majority of projects performed by the New England division consist of a combination of union and open subcontractors,” the company adds, and whether a subcontractor is a union or open shop, “are selected based on qualifications, experience , quality, cost and efficiency”.
