Billionaire Pohlad Family Accused of Using Anti-Worker Construction Contractors

The Minneapolis-based developer has not done enough to ensure good labor practices throughout its supply chain, critics say.

This article is a joint publication of Workday Magazine and The American Prospect.

The Minneapolis-based billionaire Pohlad family has a national profile, as the owner of the Minnesota Twins and the 75th-richest family in the United States. And the Pohlad Family Foundation has cultivated a progressive image for its stated commitment to “housing stability” and “racial justice,” with a special focus on reducing racial disparities.

But the Pohlad family empire of dozens of businesses includes a real estate development firm called United Properties. The Minneapolis/St. Paul Business Journal calls United Properties one of the biggest developers in the Twin Cities, having developed 3.3 million square feet in the area from 2020 to 2022, and the company’s projects can be found in Minnesota, Colorado, Texas, and Florida.

According to eyewitness accounts and public records, for some of its housing developments, United Properties relies on non-union labor in the construction sector, where it has worked with contractors that have documented track records of mistreating workers on other sites, including worker misclassification, injuries, and retaliation.

For more than two years, United Properties has refused to meet with—or even respond to—worker advocates seeking to improve labor standards in the company’s contracting chain. Advocates say they are frustrated that United Properties is ignoring them, because the developer has tremendous power to set the tone for workers’ rights in the construction sector, yet is rarely made to answer for the contractors and subcontractors it works with.

“They have an image of being the progressive billionaires of Minnesota, and reaching out to them, our expectation, given their reputation, is that we would get a response,” says Merle Payne, co-director of Centro De Trabajadores Unidos En La Lucha (CTUL), a Minneapolis-based worker center.

Worker advocates do not have any direct evidence of abuses committed on United Properties sites; the non-union construction industry, which relies on layers of contractors and subcontractors, is notoriously difficult to monitor. But advocates argue that the track record of some of United Properties’ contractors should create concern that the same practices could carry over to their sites—making monitoring that much more important. “It’s not like the contractors change their business model on other sites,” says Woodrow Piner, business representative for North Central States Regional Council of Carpenters.

When asked about concerns that United Properties works with problem contractors, and has not responded to workers’ requests to discuss improving labor standards, spokesperson Kate Lohnes stated, “United Properties is firmly committed to adhering to the highest ethical standards with integrity, honesty and good faith in all areas. In each of our projects, we expect companies that work on our behalf to uphold these same principles.”

“We take concerns voiced about subcontractors, both union and non-union, very seriously,” she continued. “Subcontractors on all company-affiliated projects are required to comply with federal and state labor, benefit, workers’ compensation and wage laws. If we learn of unfair labor practice accusations made against subcontractors who have worked on our projects, we investigate the accusations in close partnership with our general contractors, and, when appropriate, will stop working with certain subcontractors.”

Lohnes did not respond to a request to provide an example of a time the company has stopped working with a contractor or general contractor because of that company’s misconduct on other projects.

Payne called the statement from United Properties “formulaic.” He said, “Pretending a corporation is going to self-monitor and be able to fix it does not work—there’s an inherent conflict of interest. We need a worker-centered enforcement mechanism to ensure workers are being treated fairly.”

CONSTRUCTION WORK IS NOTORIOUSLY DANGEROUS, especially in the non-union sector, which accounts for approximately 88 percent of the U.S. industry. Abuse, too, is rampant, and Minnesota has seen at least seven cases in the past four years in which construction employers were charged with egregious wrongdoing, including labor trafficking.

None of these publicly known cases were on United Properties sites. But in September 2022, United Properties broke ground on the Ellie Apartments in Eden Prairie, Minnesota, which includes 25 percent “affordable” residential units, and received public funds through a tax increment financing (TIF) agreement. Two contractors with troubling labor records were hired to work on that project, according to a November 14, 2023, report from the pro-worker research organization North Star Policy Action: Painting America, Inc., and Wolf Construction Services LLC.

Doug Gjerstad, business representative for North Central States Regional Council of Carpenters, corroborated the involvement of these companies. “I absolutely can verify that. I spoke with workers from Wolf Construction and Painting America on that project. I’ve been at that project many times,” Gjerstad told Workday Magazine and the Prospect.

Painting America is a painting and drywall company headquartered in Hudson, Wisconsin. In June 2018, the Minnesota Department of Labor and Industry (DOLI) accused the company of violating Minnesota state law when it “knowingly misclassified individuals providing drywall services as independent contractors” and “hired a drywall contractor that did not hold a valid contractor registration.” The charges resulted in a consent order, signed by the company in January 2019.

Such practices are rampant in the industry: Nearly 1 in 4 construction workers in Minnesota are either misclassified or paid under the table, according to a 2021 study from the Midwest Economic Policy Institute, a status that makes them susceptible to wage theft, and denial of workers’ compensation and overtime pay. “Misclassification is the vehicle through which the most marginalized workers in the construction industry are exploited,” says Burt Johnson, general counsel for the North Central States Regional Council of Carpenters.

Asked to comment on the consent order, Cory Howard, the CEO of Painting America, said, “The Order came as a result of Painting America inadvertently using a subcontractor who failed to renew its DOLI registration while working on a project for us. At the time, Painting America was unaware that the registration had lapsed. Painting America agreed to resolve this matter and now routinely ensures that any subcontractor it uses maintains active registrations with DOLI.”

But public records show that Painting America agreed in the consent order “it engaged in the conduct leading to the allegations,” and “misclassified employees as independent contractors,” in addition to violating another state labor law.

In February 2019, Arturo Hernandez, a construction worker, testified to the Minnesota House of Representatives Labor Committee that the previous year, Painting America had subjected him to wage theft. When he asked for three weeks of wages that were owed to him, he said his employer declined to pay him “in money” and instead offered him some drugs to sell. “I need my money because I need to feed my family,” he testified.

When asked about this allegation from Hernandez, Howard said that Painting America has “no record of him ever working for the company” and denied that he had been an employee. But Jake Schwitzer, co-author of the report, and executive director of North Star Policy Action, says, “It’s not surprising that they don’t have records of Arturo ever working for them, since, according to Arturo’s testimony, they were trying to pay him off the books with drugs. I’d be shocked if they kept records of their off-the-books employees that they’re trying to pay with illegal drugs.”

Schwitzer says that “Painting America is among the worst offenders we identified. Time and time again, Painting America has shown they have no care for their workers at all, and are doing what they can to make the biggest profit off of this work.”

Painting America denied this characterization and said, “Painting America takes allegations of wage theft and worker abuse seriously, does not condone such conduct, and investigates all such allegations immediately.”

Wolf Construction, too, is identified in the North Star report as a troubled contractor. “Lower tier Wolf Construction Services subcontractors and/or labor brokers have been charged … for conduct that ranges from misclassification to retaliation to sex trafficking,” notes the report, whose other co-author is Lucas Franco.

In one case, a Wolf Construction subcontractor was convicted. Giron Construction is a wood-framing company. Its owner, Nelson Israel Lopez Giron, was sentenced on December 4 to electronic monitoring for 20 days and two years of probation after he pled guilty to insurance fraud. The case came to light after one of his workers, Juan Carlos Escalante Serrano, was injured at work when a nail went into his eye. Escalante Serrano  he was initially offered eye drops and told to keep working. When seeking care days later, Escalante Serrano said he was told to lie about how he injured himself. When he initially attempted to receive coverage under his employer’s workers’ compensation insurance, he said he was denied because his employer claimed to not know him, and then later said he was a subcontractor of a subcontractor.

Giron did not work on the Ellie Apartments site, but advocates say that Wolf Construction’s association with Giron is emblematic of the company’s broader business model. “This company has time and time again used subcontractors that have been charged, and in one case convicted, of really horrific stuff,” says Schwitzer. “Wolf, like much of the construction industry, uses subcontractors upon subcontractors, so it can be hard to hold them accountable.” (Wolf Construction did not respond to a request for comment.)

THE NORTH CENTRAL STATES REGIONAL COUNCIL OF CARPENTERS says it has identified another concerning connection at a different United Properties development. The union says that, in 2019, Fabian Espinosa worked on The Pointe Roseville, a senior rental community in Roseville, Minnesota, developed by United Properties.

On December 12, 2023, Espinosa, former owner of Fabian Espinosa Construction LLC, pled guilty to insurance fraud and coercion related to work performed in 2017 and 2018 in Hennepin County, Minnesota (not at the United Properties site). According to the charging document in the case, one of Espinosa’s workers cut his finger with a saw blade while at work and was bleeding profusely. But Espinosa instructed the worker to simply buy first aid supplies at a pharmacy, telling him that the injury was not a big deal. When the worker finally went to the hospital for treatment, Espinosa instructed him to lie about the cause of the injury by saying he smashed his hand in a car door, telling the worker that failing to lie might cause problems for his immigration status.

Espinosa was also initially charged with nonconsensual sexual contact with a worker, but that charge was dropped as part of the plea deal. CTUL was not satisfied by this development. “When women come forward to report sexual assault, we believe them, so it is disappointing to see that Espinosa was able to reach a plea agreement dropping that charge, especially given the prevalence of gender-based violence in construction,” says Payne.

Jorge Duran, a representative for wage theft and tax fraud investigations for the North Central States Regional Council of Carpenters, told Workday Magazine and the Prospect that he “personally saw Fabian at the United Properties worksite in Roseville. I’ve seen him very many times, he was there.” According to Duran, Espinosa was working as a subcontractor for the subcontractor Prime Install LLC. “I know he worked for Prime Install.”

Piner, from the North Central States Regional Council of Carpenters, confirmed that Duran reported this sighting in September 2019, which is recorded in the union’s database. “I was in the meeting where he reported the information and can confirm all this information,” he says.

Asked about the association, Lohnes, the spokesperson for United Properties, said over email, “We can confirm that our general contractors have no records or evidence that Fabian Espinosa ever worked on any of our senior living job sites, including The Pointe of Roseville.”

But Piner says the lack of records is not proof that Espinosa was never there. “Fabian is a lower-tier subcontractor who likely never held a contract with the general contractor,” he says. “The lower-tier sub almost never holds a contract. Guys like that don’t usually sign contracts—it’s handshake agreements with the primary sub.”

Johnson, of the North Central States Regional Council of Carpenters, says “there is no law requiring general contractors to have knowledge of or record everyone on their site.” He noted that, as of August 2023, general contractors “are liable for unpaid wages on their projects,” due to a piece of legislation passed by the Minnesota legislature last year, but this would not have improved United Properties’ recordkeeping of Espinosa’s alleged role.

Prime Install did not return a request for comment, and Piner says he is not sure the company is still active in Minnesota: “We haven’t seen them up here for a spell.”

SCHWITZER SAYS THESE FINDINGS RAISE QUESTIONS about United Properties’ priorities. “To think that any developer is either so blindly hiring subcontractors that they have nothing in place to find out if any subcontractor has committed any criminal acts, is a level of ignorance that is concerning. Or, if they know and are hiring them anyways, that’s even worse. So there’s no real good argument here.”

CTUL first reached out to United Properties on November 16, 2021, after identifying the company as a key target, alongside the developers Yellow Tree and Solhem, because of its frequent use of problem contractors, as well as its influence in the industry. In a letter viewed by Workday Magazine and the Prospect, CTUL requested that company representatives meet with “workers in the industry,” as well as the Building Dignity and Respect Standards Council, a worker-driven, independent monitoring group aimed at eradicating abuse in the sector, and protecting workers from retaliation when they speak out.

Inspired by similar worker-driven social responsibility models in Florida’s agricultural industry, Bangladesh’s garment sector, and Vermont’s dairy farms, the Building Dignity and Respect program urges developers to sign a legally binding agreement to meet human rights standards in their contracting chain, including a $20 minimum wage, provision of a “safe and healthy working environment,” and protections against wage theft, sexual assault, and labor trafficking. The program also enables workers to investigate and report abuses.

But Payne says CTUL never heard from United Properties, a pattern that would repeat itself in the group’s seven subsequent attempts to contact the company using various methods: letters, emails, petition delivery, and phone calls. On March 31, 2022, worker advocates affiliated with CTUL visited the United Properties office, where they say they ran into then-co-president Bill Katter. According to Payne, advocates explained what the Building Dignity and Respect Standards Council is, and handed Katter a folder with resources, but never heard from him or any other representative of the company. (United Properties declined to answer a question about this visit.)

CTUL’s last effort to contact United Properties was made on September 14, 2023, when the worker center sent the company a statement from 35 elected officials endorsing the Building Dignity and Respect program. “We urge all developers of non-union projects to take the time to hear workers’ concerns and solutions, and be leaders in remedying the part of the industry that is fraught with labor violations,” the letter states.

Yet, Payne says, “We have not heard any response from them from any of these attempts to communicate. I’d say they are ignoring us, given how many attempts we have made.”

Douglas Guerra, a drywall construction worker who serves on the board of CTUL, told Workday Magazine and the Prospect, “It’s disappointing to see that they publicly portray a progressive image, but behind the curtains there is a different reality. By joining BDR, United Properties can live up to the values they publicly claim. It would mean less money in their pockets, but would ensure basic dignity and respect for the workers who build their projects.”

The Pohlad family acquired United Properties in 1998, via Pohlad Companies, which has various business lines, including automotive, entertainment, and, of course, the Minnesota Twins franchise. Chris Pohlad is chief of staff at United Properties, and the Pohlad Companies website  its affiliation with the Pohlad Family Foundation. Numerous members of the Pohlad family serve as leaders in Pohlad Companies, as well as in the foundation.

The Pohlad Family Foundation has received positive press for its work in the community, as noted in a June 2023 research document by Eva Hadjiyanis, a former intern for CTUL, that was shared with Workday Magazine and the Prospect. In June 2018, the Minneapolis Star Tribune  that the foundation “will sharpen its focus on housing stability as record-low vacancy rates, gentrification and rent hikes in the Twin Cities have imperiled the homes of scores of working-class and low-income people.” In that article, foundation president Bill Pohlad said, “Honestly, as the third generation—our kids—starts getting more involved, the discussion gets more energized about being more direct and identifying a cause where we can have more of an impact.” (The foundation did not return a request for comment.)

Worker advocates say that developers like Pohlad’s United Properties should be held responsible for labor practices throughout their entire contracting chain.

“If we focus on just the construction contractors, developers can continue to ignore their responsibility to ensure human rights practices on their projects, and conditions won’t change,” says CTUL’s Guerra. “Developers are the head that drive projects, and contractors are the body that carries out their orders. We have to focus on the head to ensure systems change.”

Sarah is the Editor for Workday Magazine.

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