Chicago property manger JLL: Ex-tenants can't sue for forcing them to use union labor; allowed under NLRA

By Dan Churney | Nov 20, 2018

Diego Delso [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], from Wikimedia Commons

The management company that oversees a number of Loop office buildings is saying a suit by an ex-tenant, which alleged the company made them use union rather than cheaper non-union labor for renovations and other work, is groundless, because federal labor laws allow for such union-only conditions. 

In August, Wacker Drive Executive Suites sued Jones Lang LaSalle in Chicago federal court, alleging JLL violated federal anti-racketeering law and other statutes, by conspiring with three union locals to “restrict access to its buildings by any non-union contractors” since at least 2014. 

“JLL did nothing unlawful: the building is legally permitted to require union-only contractors for work at a site of construction, and JLL, as the building manager, enforced this rule,” JLL said in summing up its response to the suit. 

According to the suit, JLL manages “numerous large commercial office buildings in the Chicago Loop.” WDES identified the unions, which are not defendants in its lawsuit, as International Union of Operating Engineers Local 399, Service Employees International Union Local 1 and Teamsters Local 705. 

WDES was a JLL tenant from 2005-2017, leasing the third floor at 125 S. Wacker Drive, according to the suit. The landlord is named in the suit as “125 S. Wacker Drive.” 

WDES said JLL tells tenants they cannot hire non-union contractors for renovation or cartage. WDES estimated this mandatory union hiring makes tenants pay 20 percent or more, compared to costs for non-union work. WDES said it had to overpay more than $41,000 for office renovations. 

WDES wants the suit to be a class action, potentially bringing in thousands of other past and current JLL tenants. WDES further wants an injunction abolishing the union-only practice and JLL to pay triple its damages. 

In a response filed in late October, JLL doesn’t dispute a rule is in place requiring tenants use unions, but said the National Labor Relations Act and the Labor Management Relations Act permit such requirements, so as, quoting a 1993 federal appeals court ruling, to “reduce construction site tensions” and develop a “uniform and ready supply of skilled labor.” 

Further, WDES voluntarily signed the lease with the landlord, agreeing to comply with the landlord’s rules, which included the union requirement, JLL said. In this regard, if any damages are due WDES, the damages should come from the landlord, not JLL, in JLL’s view. 

WDES alleged there was a racketeering “agreement” between JLL and the unions, but also alleged the unions “pressured JLL through threats, picketing, and public shaming,” to enter into the alleged agreement. JLL countered an “agreement” brought about through such alleged tactics, does not constitute a bona fide agreement. 

JLL said WDES alleged JLL “extorted” money from WDES. However, WDES paid the money to the union contractors, not JLL, with JLL receiving nothing from the unions for “enforcing” the union requirement, JLL contended.  

Likewise, JLL said the unions do not get a “kickback” from JLL, as alleged. Instead, the benefits the unions receive through the union-only rule, such as union dues and health and welfare fund payments, are allowed by federal labor law. 

As for the injunction request, JLL claimed WDES has no standing, because WDES is no longer a tenant. 

A status hearing is set for Jan. 7. 

WDES is represented by the Chicago firms of Stephan Zouras LLP and Foster PC, and Walner Law Firm of suburban Northbrook. 

Jones Lang LaSalle Americas is defended by the Chicago firm of Morgan, Lewis & Bockius.

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Organizations in this Story

Foster PC Jones Lang LaSalle Morgan, Lewis and Bockius LLP Stephan Zouras LLP The Walner Law Firm LLC U.S. District Court for the Northern District of Illinois

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