ARCO Construction Cos., the big contractor that performs a great deal of design-build and concrete construction work, has built up its New England operations from two employees and about $10 million in revenue in 2018 to roughly a level of about $300 million in annual regional revenue. Much of the growth is due to the efforts of Jason Grant, the regional office president, and George Green, the vice president. 

For several years, however, ARCO has been targeted in a campaign to discredit the company and its reputation by two Boston-area laborers' locals that ARCO accuses of interfering with clients and costing the company $73 million in revenue from just one project. The fight has involved unfair labor practice complaints by the union and a defamation lawsuit against the union by ARCO.

A state superior court judge in Boston recently dismissed ARCO's defamation, tortious interference and unfair trade practice claims, but the contractor says it is appealing.

As the union share of the construction market dropped sharply since the 1960s, unions have often used pressure campaigns, predominantly against all-open-shop employers. St. Louis-based ARCO says it is signatory to union agreements with other trades in other regions, although not in New England, and uses both types of subcontractors on its New England projects.

The Boston laborers' campaign involves federal-level legal warfare, too.

Between May 2023 and May 2024, ARCO and the laborers union were parties to four National Labor Relations Board unfair labor practice charges involving different issues from those in state court. The contractor says it prevailed in each one; the unions' labor lawyer couldn't be reached for comment.

In dismissing the contractor's state court civil lawsuit, the state court judge said the labor board case “preempts state law even when the two only arguably conflict” and the unions’ conduct at issue in the civil court lawsuit is “within the regulatory purview of federal labor law rather than that of state police power.” 

The heart of the contractor's defamation and interference lawsuit is the laborers' campaign last summer which involved sending ARCO customers copies of Facebook posts made by Green 13 years ago, when he was in high school. The posts contained snarky comments tinged with racism, sexism and insults to other groups. After sending the posts to ARCO customers, the union demanded the customers take action.

Michael Gagliardi, business manager of Laborers' Local 175 and the leader of the campaign, noted in an interview that his local is "majority minority" and says the issue is related to diversity, equity and inclusion policies.

ARCO, Gagliardi claims, has or should have a DEI policy "and either didn't follow it or didn't vet [Green]."

Gagliardi characterized Massachusetts "as a state that cares about DEI," and that those DEI principles should apply to developers who receive support for their investments from the state.

In its lawsuit filed last year in state court in Boston, ARCO claimed that the union effort was "designed to intimidate ARCO and its clients, damage ARCO's community standing, and strong-arm economic opportunities away from ARCO."

"Defendants have demonized ARCO and antagonized its current and prospective clients long enough," the lawsuit stated.

Among other things, ARCO claims the union makes it seem as if ARCO or its clients were endorsing the long-ago Facebook posts and "falsely associating ARCO with Mr. Green's alleged social media posts from 2010 and 2011."

Projects Terminated, Revenue Lost

One client, ARCO's lawsuit states, terminated its "engagement of ARCO on a project in Franklin, Massachusetts which deprived ARCO of millions of dollars in revenue."

The lawsuit states that another of ARCO's clients terminated its engagement "on a project worth approximately $73 million."

After the union sent the posts to ARCO customers and then sent follow-up letters or emails demanding action from the customers, ARCO sued the union in state court.

St. Louis-based ARCO Construction Cos. ranks No. 17 on the ENR Top 400 Contractors, reporting $6.64 billion in 2023 revenue.

The contractor's New England regional office has been a notable growth story.

When it opened its New England regional office, it had already done much work in the area for clients such as FedEx, Performance Food Group, DHL and Scannell Properties. The area portfolio was largely industrial when the office opened, but it has since expanded to include numerous new clients.

When one ARCO customer did not respond to the union's sending a letter and leaflet about Green's Facebook posts, Gagliardi wrote to the company that "as we have not heard back from you regarding the information that we sent to you and after we have started bannering at your Boston office, I will assume that you condone the vile statements, work practices and wage violations to name a few."

"I am going to write investors regarding theses issues and your lack of response as we see it to be a tacit approval of the issues we are bannering."

ARCO Uses Union Subs, Too

ARCO, in its statement to ENR, said it has "strong relationships with unions across the country" and that "a number of ARCO divisions have union agreements in place in various locations with specific unions/locals." 

Union agreements are done on a case-by-case basis, the company said, and ARCO’s New England division does not have any union agreements in place.

"Most projects performed by the New England division consist of a combination of union and open-shop subcontractors," the company adds, and whether a subcontractor is union or open shop, "they are selected based on qualifications, experience, quality, cost and efficiency."