Saying the landlord’s acquiescence to the labor unions’ demands amounts to an illegal conspiracy to generate kickbacks for union contractors, a former tenant of an office high-rise owned by Jones Lang LaSalle in Chicago’s Loop has delivered a class action lawsuit against its ex-landlord, demanding the company be made to pay back potentially thousands of current and former tenants throughout the city for forcing them to use more expensive union labor when renovating their offices or moving in or out of office space in the JLL-managed buildings.
On Aug. 13, plaintiff Wacker Drive Executive Suites LLC filed suit in Chicago federal court against Jones Lang LaSalle Americas (Illinois) LP, asserting the company’s actions in conjunction with three labor unions violated federal anti-racketeering law and other statutes.
The lawsuit identifies the labor unions as the International Union of Operating Engineers Local 399, AFL-CIO; Service Employees International Union Local 1; and Teamsters Local 705. The labor unions are not named as defendants in the legal action.
According to the lawsuit, JLL, which manages “numerous large commercial office buildings in the Chicago Loop,” has allowed the three union locals to “restrict access to its buildings by any non-union contractors” since at least 2014.
James Zouras Stephan Zouras LLP
According to the lawsuit, JLL holds collective bargaining agreements with IUOE Local 399 and SEIU Local 1. It does not hold any CBA with Teamsters Local 705, but the plaintiff alleges the landlord has still allowed the union local to “forbid non-union movers from accessing its buildings.”
WDES was a JLL tenant from 2005-2017, leasing the third floor at 125 S. Wacker Drive, according to the complaint. The building, a 31-story office tower, offers more than 566,000 square feet of space at the corner of Wacker and Adams Street, in the West Loop, according to a website established by a management company to promote the building.
“The conspiracy is an illegal ‘hot cargo’ agreement carried out by JLL at all of its Chicago Loop locations in response to union demands,” WDES said in its complaint. “And by requiring tenants of the buildings it manages to use unionized labor, JLL is compounding the hot cargo agreement with violations of the Hobbs Act, a type of racketeering activity.”
According to the complaint, JLL grants its tenants a “construction allowance” when leasing office space, essentially allowing them to use future rent money to renovate their work spaces to suit their needs. However, the complaint asserts JLL tells the tenants in advance they are not free to hire non-union contractors to perform the work or move their equipment and furnishings in or out of the work spaces, because non-union contractors will not be permitted to access the freight elevators.
“These three unions have exerted their power over JLL for years,” the complaint said. “Their business agents, who operate outside the buildings, and union stewards, who are employees inside, closely monitor all contracting in JLL buildings. If they see a truck near the loading docks without the familiar union decals they spring into action and immediately notify the property manager and demand the non-union contractor/firm be removed. If this is not done, the agents and/or stewards notify their union officials at its local office.
“They will then call the property manager, demand expulsion and, if necessary, threaten a work stoppage (strike), picketing outside the building which may include the display of a large inflatable rat (sometimes called a ‘union rat’) on or immediately adjacent to JLL’s managed property for public viewing and shaming.”
According to the complaint, such threats and other actions allegedly violate the terms of the CBA and the National Labor Relations Act. Yet, the plaintiffs claim, rather than assert their rights, “JLL accedes to their demands, at the considerable expense of its tenants.”
The plaintiffs estimate the forced union hiring requires tenants to pay a premium of 20 percent or more for the work, compared to the cost of hiring a non-union competitor.
WDES, for instance, estimated it was forced to overpay by more than $41,000 when it renovated offices in 2014 and 2017.
The plaintiff asserts the arrangement essentially “holds hostage” tenants, who must hire union contractors or “they will not be able to start or complete their renovations and open for business.”
“This is effectively a kickback by JLL to the unionized contractors who would otherwise not get hired by the tenants,” the plaintiffs assert.
WDES asks the judge to issue an injunction forbidding the alleged conspiracy from continuing, and to order JLL to pay triple its alleged damages.
But the complaint also asks the judge to expand the action to include potentially thousands of other current and past JLL tenants in Chicago who may have been subjected to the alleged “conspiracy.”
WDES is represented in the action by attorneys James B. Zouras and Ryan F. Stephan, of the firm of Stephan Zouras LLP, of Chicago; Howard Foster and Matthew Galin, of Foster PC, of Chicago; and Aaron Walner, of The Walner Law Firm LLC, of Northbrook.
Editor's note: This article has been revised from a previous version to clarify Jones Lang LaSalle's role as manager of the office buildings referenced in the lawsuit discussed in the article.