The Middletown Press (Middletown, CT)
State fines FedEx site
Labor office delivers $30,000 in penalties, stop-work order as ironworkers stage picket at Middle Road work area
MIDDLETOWN >> A 10-foot inflatable “corporate fat cat” stood tall Monday while local union ironworkers picketed the FedEx construction site on Middle Road.
“That about says it all,” said ironworkers warming their hands at a fire burning in an oil drum. The workers, who gestured toward the caricature of a boss with a big diamond ring on one pinkie and his other hand gripping the neck of a construction worker, stood in 20-degree temps while “exercising our First Amendment rights,” they said. Through 2 p.m., five men carried neon yellow signs with messages such as “shame on steel workers,” “shame on BlueScope” and “BlueScope undermines the area standard of wages and benefits” Monday afternoon.
Steelworx LLC, a Fedex subcontractor, was issued a $30,300 civil penalty after the state’s labor department issued a stop-work order at the local site because the Floridabased company failed to produce proof of state workers’ compensation insurance to labor officials.
The penalty came as the weeks-long picket continues by unemployed residents who
belong to Ironworkers Local 15. The workers are demonstrating against the hiring practices of Bluescope Construction, which hired Steelworx, in a process that excluded local union workers and hurt state taxpayers, a union official said.
“This is a multibilliondollar, multinational corporation and they put their hand out to squeeze everyone they can get,” charged Joseph Toner, business manager for Ironworkers Local 15, which is based in Hartford.
On Dec. 12, investigators from the state Department of Labor visited the worksite, where the department said Steelworx was unable to produce Connecticut workers’ compensation insurance for its workers. The state issued a stopwork order from Dec. 12 to 16, when the company provided proof of coverage, according to Nancy Steffens, labor department spokesperson.
In its investigation, the state learned that Steelworx was not registered to do business in Connecticut. Therefore, it was not paying taxes to the state, Steffens added. In response, the state issued $30,300 in civil penalties, citing a $300-perday fine for 101 workers counted on the worksite during the six-week period of operation.
The $30,300 penalty is pending, Steffens said.
“BlueScope undertakes strict selection of qualified subcontractors and is committed to full legal compliance,” Director of Construction Jennifer Morrison said by email.
Steelworx was contacted by phone and email Monday and Tuesday for a response to the civil penalties issued, the lack of state business registration by Steelworx and the picket line. On Tuesday, a man answered the phone and identified the business as Steelworx. After a request for comment, the man claimed to be in the middle of a meeting before asking for a call the next day and hanging up.
“As with all FedEx Ground facility construction projects, including the new hub in Middletown, we select vendors who are solely responsible for the selection of qualified workers and subcontractors,” David Westrick, FedEx Ground Media Relations, said in an email. “In all aspects of FedEx Ground operations, we are committed to complying with law and regulations applicable to our business and we expect the same from our vendors.”
The 525,000-square-foot FedEx Ground distribution hub is being built on a 260acre property purchased in March from Aetna for $18 million. The FedEx site is under the supervision of Chicago-based developer Barton Malow, who hired general contractor BlueScope Construction of Missouri.
“We have some great employers out there and others who don’t understand the rules,” said Steffens. “Other employers think it’s easier, cheaper to operate that way.”
Jobs offered by Steelworx might pay as little as $12 per hour without benefits while a union worker might earn up to $65 per hour in wages and benefits, explained Toner. A worker’s comp insurance policy is very expensive for the company, with policies for ironworkers costing as much as $300,000, he added. For any worker hurt on the job who seeks treatment at Middlesex Hospital without insurance, ultimately, it’s the local taxpayers who pick up the tab, Toner said.
“If workers get hurt, there’s no money to pay for health care,” agreed Steffens. “Taxpayers would have to take it on.”
FedEx, a company valued at $44 billion by Forbes, applied for a state tax incentive program to abate 80 percent of its tax bill for five years, with the state responsible to reimburse the city for half of the abatement amount.
For the first five years, FedEx Ground’s abated city tax bill will total $250,091 annually, then increase to $1.25 million. Without the tax abatement, the city was slated to collect $12.5 million in revenue over the course of 10 years for the property, so Middletown will forgo $5 million in taxes to subsidize the company’s entry.
Aside from the ironworkers, the majority of jobs on the FedEx construction site are being filled by union workers from around the state, said Mayor Dan Drew, who added his support for ironworkers “and their right to picket and collectively bargain.” Even if Steelworx was fined, FedEx and Bluescope Construction are “responsible for this” result, according to Toner. “It’s complete exploitation.”
Once the construction site becomes fully productive, up to 60 steelworkers may get long-term jobs from Steelworx, the union estimated.
“Local contractors can’t compete,” said Toner. “It happens all the time.” Construction professionals always “work ourselves out of a job,” said Toner. Many qualified resident ironworkers now are collecting unemployment insurance, so all residents paying taxes are negatively impacted, Steffens and Toner agreed.
The FedEx Ground facility will have up to 250 loading/unloading doors and is estimated to employ several hundred full- and part-time workers when the facility opens in Sept. 2018.