CHICAGO — A federal judge isn’t ready, yet, to allow a former tenant of a Loop office high rise to turn its antitrust lawsuit against commercial real estate giant Jones Lang LaSalle over union-contractor-only building rules into a class action that would include tenants at 20 JLL-managed downtown Chicago towers.
Wacker Drive Executive Suites sued building management company JLL in August 2018, alleging JLL conspired with unions to force tenants to use expensive union labor for renovations and other work. In January, Magistrate Judge Sunil R. Harjani struck a conspiracy claim from the suit.
Now, in an opinion issued Sept. 23, Harjani denied WDES’ request for class certification.
James Zouras
| Stephan Zouras LLP
According to Harjani, WDES asked the court to approve a class of additional plaintiffs to include any JLL tenant in at least 20 Chicago properties who may have been forced to hire union labor for moving or renovation work since August 2014. The company also sought to create two subclasses, one for tenants made to hire union contractors for improvements and the second for those compelled to hire union movers.
WDES’ allegations of Racketeer Influenced and Corrupt Organizations (RICO) Act violations, Harjani explained, is built on evidence the company says points to extortion and bribery. JLL countered by noting a union-only requirement — which it didn’t deny instituting — is not itself illegal.
The key issue, Harjani continued, is if WDES can prove a conspiracy or illegal agreement between JLL and three labor unions: International Union of Operating Engineers Local 399; Service Employees International Union Local 1; and Teamsters Local 705. The unions are not named as defendants in Wacker Drive's lawsuit.
“JLL contends that there is no conspiracy between JLL and the unions to enforce the union-only restrictions,” Harjani wrote. “Rather, JLL presents evidence that the union-only requirement was a mandate directly from the building owners and JLL handled enforcement of the building owners’ union-only requirement on a day-to-day basis.”
While WDES’ reply brief had no evidence demonstrating such an agreement, it argued that question wasn’t at issue with regards to class certification. Harjani disagreed, saying absent such an agreement, the proposed class members don't have enough in common to be grouped together as a class.
“WDES must come forward with ‘significant proof’ that its RICO claims can be proved on a class-wide basis,” Harjani wrote, adding that all six of WDES’ commonality questions depend on the existence of an illegal agreement. “There are no facts suggesting that JLL and the unions operated together as a single unit in implementing the union-only rule.”
Frank Falzone, chief engineer at the JLL-managed 180 North LaSalle property, testified under oath, confirming JLL required dock security guards to check contractors for union identification. Falzone acknowledged he personally asks nonunion contractors to leave.
WDES said that proves the conspiracy.
Harjani, however, said there is no evidence Farzone’s written job description incorporates those responsibilities. The judge noted Falzone testified that he takes these steps to protect fellow union members.
Harjani ultimately decided class certification “is better explored on a more developed factual record” and denied the motion without prejudice.
The parties are to file joint status reports by Sept. 30 to identify remaining discovery topics and proposed schedules for the discovery process.
WDES is represented by the Chicago firms of Stephan Zouras LLP and Foster PC, and Walner Law Firm, of suburban Northbrook.
JLL is represented by attorney Scott Schutte, and others with the firm of Morgan Lewis & Bockius, of Chicago.