Prince Lobel Attorneys Win Permanent Injunction in Favor of Women and Minority-Owned Contractors

Client Alerts · March 5, 2018

Hugh Gorman and Jeffrey Pyle won a significant ruling last month that will pave the way for more participation by women- and minority-owned businesses in Massachusetts public construction projects.  A judge of the Suffolk Superior Court permanently enjoined the state from allowing businesses owned by persons of Portuguese origin to participate in the state’s affirmative marketing program, absent changes to the law.  Under the affirmative marketing program, a portion of every state construction contract is set aside for disadvantaged minority-owned contractors and women-owned firms.  Gorman and Pyle represented Federal Concrete, Inc., a cast-in-place concrete company owned by Janet Butler, in its challenge to the inclusion of persons of Portuguese origin in the program.

Justice Douglas Wilkins found that in 2007, the state began arbitrarily treating businesses owned by persons of Portuguese descent as disadvantaged “Minority Business Enterprises”–in violation of a state regulation–even though the state had no evidence people of Portuguese origin suffered from discrimination in the construction industry.  The preference was held in place, the judge found, because of political pressure “from firms and persons who benefit from the challenged practice.”  Discovery in the case showed that 25 large Portuguese-owned construction firms captured almost half of all payments to “minority” contractors, to the tune of tens of millions of dollars, and at the expense of legitimately-disadvantaged Minority Business Enterprises, before Federal Concrete filed suit.  A state official tried to stop this practice in 2012, but he was overruled by the Governor’s office, acting at the behest of state legislators.

“This ruling will open doors for legitimately disadvantaged construction firms all over the Commonwealth,” said Hugh J. Gorman, chair of Prince Lobel’s Construction Group.  Added Pyle, “Janet Butler showed great courage taking on the state government.  This ruling is a vindication of Federal Concrete, and it helps restore this important program to its true intent.”  Janet Butler stated that she is gratified by the ruling: “The program is supposed to benefit groups that have been excluded from the construction industry in Massachusetts, not big construction corporations that happen to have friends in high places.”