by fberman in Uncategorized
Posted on March 1, 2010 at 10:53 pm
Last Modified on March 7, 2010 at 9:28 pm
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Aldermen will hear from City Solicitor John Gannon tonight (Tuesday, March 2 at 8pm in City Hall) about the City’s options for terminating the new five year contract with Russell Disposal, in the wake of the announcement on January 21, 2010 by Attorney General Martha Coakley of a settlement agreement “… to pay $70,000 to 352 current and former employees as well as a $20,000 penalty to the Commonwealth to resolve allegations that the company violated the Massachusetts Wage and Hour Laws.” As per a January 27 story by Tom Nash in the Somerville News, the settlement is the culmination of a longstanding dispute between Russell and its employees, which has included a battle over efforts of some employees to affiliate with Teamsters Local 25.
As per a February 3 article in the Somerville Journal by Meghann Ackerman, Ward 6 Alderman Rebekah Gewirtz submitted an order asking for guidance from the City Solicitor about options for revisiting the City’s decision to sign a new five year contract with Russell Disposal for trash pickup. In response to Alderman Gewirtz’ s order, City Solicitor John Gannon will explain the City’s options, including terminating the contract, at the March 2 Committee meeting.
Mayor Joe Curtatone was quoted in Ms. Ackerman’s story as saying that the alleged wage and hour violations (i.e., under-payment of workers) were “tantamount to clerical errors and mistakes,” and not grounds for termination of the contract. Come to the BOA’s Legislative Matters committee meeting tonight to hear what our Aldermen think.
If you’re already planning on attending the BOA’s Land Use Committee meeting (about the proposed Senior Housing zoning amendment – starting at 7pm), why not make it a double-header, and check out the debate over the Russell contract. After all, what’s a public meeting without the public?
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Why do I smell a major breach of contract lawsuit in the future?
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The meeting tonight did not give any indication that a breach of contract issue was being pursued. The only way that Somerville can get out of the current contract is if Mayor Curtatone ends it, or if Russell gets debarred from operating which would come down from the AG. The AG’s office made it clear that a debarment was not going to be an option.
The Committee is seeking to find out if the violations pertained to Somerville-resident employees specifically (please note that the fact that the company is Somerville-based was also brought up). The assistant AG that handled the case didn’t give the City Solicitor’s office many details regarding their investigation, so this city-specific information was not available to committee members or John Gannon.
The committee is going to issue an invitation to Russell to attend a Legislative Committee meeting and explain their side of the story before making their next move.
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Courtney, I am not looking at the situation at present. I am looking into the future if Somerville cancels the contract and Russell decides the reason is not legit. I am seeing this with my lawyer classes I wear every day. Russell can file a breach of contract suit possibly and I am sure that idea is being weighed by Mr. Gannon silently right now.
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Janine, I agree with your prediction. I was just stating a matter of information that leaving the contract isn’t the next course of action, at least, that’s what I got out of the meeting last night. I’m sure it’s being weighed, as it should.
I’m interested to see if Russell accepts the committees invitation to attend a meeting. Do you think they will?
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I doubt it. They are under no legal obligation to attend and if I was their attorney I would tell them not to go.
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Russell breached their contract with the city when it signed the Tax Compliance Certificate under the “penalties of perjury”. Attorney Curtatone and Attorney Gannon have to look no further than this:
“Pursuant to M.G.L. c. 62C, §49A, I certify under the penalties of perjury that, to the best of my knowledge and belief, I am in compliance with all laws of the Commonwealth relating to taxes, reporting of employees and contractors, and withholding and remitting child support, as well as paid all contributions and payments in lieu of contributions pursuant to MGL 151A, §19A(b). ”
By not paying these 352 people Russell violates and the AG proved this when they charged:
“Russell has been cited by the Attorney General’s Office for three intentional and one unintentional violation of the Commonwealth’s wage and hour law”
These facts may have been brought up Tuesday Night or perhaps will be brought up next time the Committee meets.
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While violating that provision appears to constitute a violation of state law, I’m not sure how it would void Russell’s contract, unless it contained an explicit statement to this effect. Am I missing something?
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I would need to read the contract. I doubt the tax certificate was part of the contract with the city.
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By violating this provision Russell should have no grounds to go after the City for Breach of Contract.
Most contracts with the city or any government agency contains this clause, especially with the amount of the contract and the # of workers involved. It protects the city or government to ensure that they are working with legit contractors who are following all the rules for reporting their employees for tax purposes etc…
To Somerville’s credit they go above and beyond with it’s “living Wage ordination.”
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Then if this paragraph is in the contract, this only begs the question why hasn’t the city cancelled the contract? Something is missing from the contract if it had not been cancelled. I assume the city lawyers are dragging their feet to give any responses. Plus, I am not saying any “breach of contract” lawsuit has to be successful. I am just stating that I can see someone filing one.
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According to the Mayor, Solicitor, and the DPW Commissioner, the contract wasn’t cancelled because Russell did not breach terms of the contract with the AG ruling and because it provided the lowest bid among the 4 companies that submitted one. I’m sure the fact that it’s a Somerville-based company plays a huge role too.
The Solicitor did state that Somerville has the legal right to revisit the contract, at any point, if they feel that Russell has not lived up to the terms of the agreement.
Clearly the AG ruling was not a good enough reason to revisit. I would like to see how many of the 300+ employees that received back payments were Somerville residents.
@Janine: Rebekah Gewirtz asked if a clause could be added that tied in ethical practices to the contract. Is that something that’s feasible? (I think you’re an attorney, right?)
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Adding language to a contract after the fact is always dangerous. A party (let’s say Russell) would almost definitely object to the language. I would say from this point forward that any contract with Russell or anyone else have this language.
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You know I would be all for Russell keeping the contract and telling the city to go take a flying you-know-what at the moon, but after their latest frisbeeing of my barrels…. we really need a new contractor. At least one that doesn’t seem to relish flinging barrels as far as they can.
Oh… if I were the Russell employees — I’d just be happy to have a job with the progressives / socialists / marxists we have running this state and country now. We just have to all hang in until November and then the adults can take over.
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Courtney you are right that Russell based in Somerville should be a good reason. If the trucks are registered in Somerville and paying the excise tax to the city. The funny thing is that the trucks I see in my neighborhood say Woburn on the side. The company has many local ties to a lot of the decision makers in the city too….
If cost is the only factor when it comes to doing business with the All American City than anyone who can quote a low price at the expense of their workers should only be allowed to do business with the city.
It will be a black eye for Somerville when other cities and towns change trash/recycling vendors from Russell like Lowell did.
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The Somerville Journal Blog has just picked up this story if anyone wants to comment there too.
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