This Labor-Trafficking Case Exposes the Twin Cities’ Seedy Subcontracting Underbelly

This Labor-Trafficking Case Exposes the Twin Cities’ Seedy Subcontracting Underbelly

This Labor-Trafficking Case Exposes the Twin Cities’ Seedy Subcontracting Underbelly

Workers allege that their employer engaged in labor trafficking, theft of public funds, and insurance fraud.

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The workers had arrived in the Twin Cities in a rush of hope—a wave of migrants lured by the promise of $20-an-hour wages and steady jobs amid the region’s real-estate boom. But when they came to Minneapolis in search of decent work last summer, they stumbled into a nightmare instead: life-threatening injuries on the job, crushing debt, a bout in the local jail, and, for some, deportation orders.

The labor-advocacy organization Centro de Trabajadores Unidos en Lucha (CTUL) has helped local authorities bring a criminal complaint charging Ricardo Batres and his construction firm American Contractors and Associates with labor trafficking, theft of public funds, and insurance fraud. Though labor-trafficking prosecutions are rare in this industry, advocates say the case illustrates who really pays for the Twin Cities’ new office towers and suburban row houses: the immigrant workers whose labor is rewarded with broken bodies and one-way tickets back across the border.

During the summer of 2017, American Contractors allegedly recruited about a dozen workers and deployed them to local projects for 10-to-12-hour shifts, about six days a week, often in dangerous conditions that ultimately left two workers severely injured.

These brutal conditions appear to be increasingly typical in the Twin Cities, one of the Midwest’s fastest growing, but also most racially and socially segregated, regions. Though Minnesota has a strong tradition of unionization in the construction industry, recent growth in Minneapolis and St. Paul has drawn many immigrant workers into construction jobs with substandard conditions.

At American Contractors, according to the complaint, in addition to their punishing daily work regimen, workers were routinely shorted on weekly wages and denied standard benefits. Batres allegedly denied them overtime pay and often tried to undercount the hours they worked. The various projects they worked on, including wood framing and wall installations, were rife with hazards; workers often had to scale elevated buildings without proper protective gear. Several workers were injured on the job and, without adequate medical care, forced to return to work before they recovered. Two workers with serious injuries were treated only with massage-therapy sessions with a “traditional healer.” Workers were allegedly discouraged from consulting a chiropractor to avoid costly litigation over insurance. That would make it more difficult to secure new contracts, they were told, and undermine the work prospects.

In early July, several workers got into an argument with Batres about their working conditions, the lack of safety protections, and their having to pay for their substandard housing. They warned they would soon move on to find a new employer. Days later, the workers were suddenly apprehended by ICE outside their apartment—apparently Bartes had reported them in retaliation.

About a month later, one worker, Jose Adalid Zavala Lopez was released on bond. But Batres claimed he had paid his bail and legal fees, which left Lopez thousands of dollars in debt to his boss. Batres then told him he would “have to continue working with him so I can save up to pay for the lawyers’ expenses…. and if I keep working for him, then I will get lots of money, a work permit, a visa, and more.”

Despite the trauma of the abuse and detention, the workers who have come forward are, in a way, fortunate; some coworkers have since been deported. Lopez and coworker Yimer Iriarte Banegas say they decided to work with CTUL and local authorities on the investigation in hopes of exposing the industry’s endemic abuse.

In addition to trafficking, Batres was charged with insurance fraud and “swindling” public funds. When dealing with insurers and the local hospital-aid program, Batres allegedly tried to “cover up his crimes” by forcing the workers to sign documents that falsely classified them as independent contractors, and denying he employed them at all.

Reuter Walton, a construction company that is one of the area’s largest developers, is known to have indirectly used American Contractors’ workers via a subcontractor in 2017. Though not directly named in the complaint, the company has publicly stated it takes the charges seriously and offered to cooperate with the investigation. Yet it claims it had not been aware that American Contractors had worked on their projects. That the developer was unaware of its indirect ties to an abusive employer reflects a pattern of corporate deniability: Rampant use of under-regulated contract labor allows many large developers to circumvent labor laws and drive down labor costs.

According to Aaron Sojourner, a professor at Carlson School of Management’s Department of Work and Organization, escalating competition among local subcontractors has precipitated a steady regression in labor conditions in the Twin Cities.

This low-road strategy puts ethical employers at a competitive disadvantage, creating a race to the bottom. Some real estate developers encourage this by heavily pressuring contractors to reduce costs and turning a blind eye to wrongdoing and corner-cutting.

The brutal conditions sometimes turn violent. In a separate case of alleged abuse, photographs obtained by CTUL show a worker getting choked on a worksite, reportedly by a contractor who attacked the worker after he had “asked for wages that had not been paid to him.”

Nationwide, immigrant construction workers are particularly vulnerable to work-related injury and death—often stuck in the lowest paid and most dangerous jobs in construction and agriculture. Between 2014 ad 2017, according to the AFL-CIO, work-related deaths among Latinos increased from 804 to 903, with more than 280 deaths in the building trades, even as overall fatality rates have been declining over time.

Exploitative industry practices are being amplified by Trump’s immigration crackdown, as a surge in ICE raids and detentions have deterred workers from reporting abuse. One worker-organizer with CTUL, who wished to remain anonymous, said that since Trump’s election, “It seems like there’s a competition to oppress people, where workers can’t even complain about how much they’re making or how they want their working conditions to be.”

Minneapolis City Council member Steve Fletcher tells The Nation that among marginalized immigrant workers, “I don’t think that everybody feels safe accessing their rights…and bad actors prey on that vulnerability.” But he emphasized that cases like American Contractors should prompt the community to reevaluate the social costs of the region’s breakneck growth.

“People are certainly looking at individual developers,” Fletcher says, “and asking, ‘Do they share our values? Should we be letting them build this and make those profits in this city?’… If we’re seeing these kinds of working conditions on somebody’s worksite, that raises big questions for us.”

Meanwhile, workers are also recognizing that they have a right to equal protection of the law, and taking collective action to demand their fair share of the Twin Cities’ building boom.

In his work with CTUL, the organizer says, “I see myself as an educator rather than an organizer, and the thing that I try to do is remind workers that they’re human beings, and because they’re human beings they have rights. And you have to stand up for your rights as a human being…. And that there’s no reason why they have to put up with abuse from their employer.”

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