Garbage Fight


Back on December 19, just as New Yorkers were about to confront a 72-hour pre-Christmas nightmare called the Transit Strike of 2005, another major city employer was prodding its workers with a sharp stick and daring them to walk off the job. Waste Management Inc., the Houston-based mega-corporation that last year did $12 billion worth of business earning some $900 million in profits, told 123 of its employees who drive the city’s streets all night collecting trash from private businesses that it couldn’t afford their health coverage any longer. The company also announced that it didn’t like paying extra to those who work on Saturdays. For that matter, it added, its pension contributions were too high as well.

After several meetings with leaders of Local 813 of the Teamsters, which represents the workers, the company went ahead and imposed its plan on the workforce. Normally, unions view that kind of action as sufficient provocation for a strike. There was little question the company expected one. Union members watched as Waste Management imported some 80 to 100 potential replacement workers, apparently ready to take over their jobs at a moment’s notice. No effort was made to hide them. “They drove behind the [garbage] trucks all night in pickups, watching the men do their collections,” said Local 813 president Sylvester Needham. “They had them in motels in Queens, just waiting for us to walk out so they could bring them in.”

Faced with that scenario, as well as with a city already in the grip of a mass transit strike, the Teamsters opted to hold their fire and keep working. To keep his members covered in the meantime, Needham had his union benefit fund pay the $305 per month in contributions needed to keep the Waste Management employees covered, while continuing to try to negotiate a new contract. A federal mediator was brought in to try and work things out. No dice.

Three months later, with no progress in the talks, the Teamsters say New York is headed for a garbage strike, its first in more than 15 years. Barring a last-minute reprieve, the Local 813 members expect to hit the bricks on April 1. “That is D-day for us,” said Needham, “We have got to the point of do-or-die.”

Back in the bad old days of the city’s private waste-hauling industry, that kind of expression could easily be taken all too literally. Until a decade ago, contract negotiations were settled at the highest levels—of the Mafia, that is. Gangsters associated with John Gotti’s old Gambino crime family controlled the union, while a coalition of different mob families ruled the roost on the employers’ side of the table. Even with such a commonality of interest, things didn’t always go smoothly. In 1990, a five-day strike brought waist-high piles of trash, a rash of assaults, and gunshots pegged at both strikers and managers.

That was the last walkout by the workers who pick up waste for offices, manufacturers, hotels, and restaurants. (City sanitation workers, who are public employees, handle residential trash.) In the intervening years, Local 813 went through a seven-year-long government-supervised trusteeship during which scores of wiseguys were purged. Among those booted were the local’s longtime mob-allied president (an aging one-legged hellion named Bernard Adelstein who once tried to throttle Robert F. Kennedy), and numerous members who enjoyed a pension and other benefits without the required heavy lifting (one former member filed for benefits from prison, where he was doing a life stretch for murder; his victims had been disposed of via the rear-end loaders of his rubbish removal trucks).

Changes were even more dramatic among the employers. Faced with a massive racketeering prosecution brought by Manhattan District Attorney Robert Morgenthau, and new tough licensing requirements by then mayor Rudy Giuliani, many sold their interests to big national waste companies, which entered the city’s garbage business for the first time.

For a while, things appeared to go smoothly. Collection prices initially plummeted as businesses celebrated the end of the “mob tax” on private waste. Customers could choose a carter based on the best price, not because their stop had been allocated by stogie-puffing wiseguys enforcing the mob’s semi-feudal system of “property rights.”

But because this is New York, and there is a lot of money made in garbage (why else would the mob be involved?), things soon got more complicated. First, the big national firms, with Waste Management in the lead, started dropping customers, complaining that the city’s cap on garbage collection prices was too low. The city responded by allowing some prices to rise, with the predictable result that many small businesses complained that their costs soared by 500 percent.

But if profits in the private collection business were sagging, they were soaring in the rest of the city’s waste industry. Following the Giuliani administration’s decision to shut down the Fresh Kills landfill in Staten Island, the city entered into a series of mammoth contracts to have its residential trash hauled out of town. Waste Management of New York, the corporation’s local subsidiary, was a major winner. City records show that for the three-year period ending in 2007 the firm is due to receive a whopping $355 million from the city for exporting New York’s biggest homegrown crop, municipal solid waste.

Those huge numbers underscore the difference between the city’s old garbage headaches and its current ones. Under the Giuliani-era cleanup, some smaller waste companies were denied license approvals simply for failing to adequately explain why they had associated with known wiseguys. But Waste Management qualified for the immense solid waste transfer contracts even though, according to the Securities and Exchange Commission, its former chief executive along with other top officials were allegedly “cooking the books,” overstating profits by more than $1.7 billion in what regulators termed a greedy scheme to dupe shareholders. A three-year federal investigation of what was considered one of the worst of the pre-Enron corporate scandals led to a decision last August in which Waste Management agreed to pay $26.8 million to cover the settlement of federal charges against the former executives who admitted no wrongdoing.

That was all ancient history, the company said. “That involved a totally different management, and a totally different company,” said public relations aide George McGrath. “It’s been resolved, and it’s got nothing to do with Waste Management as it operates today, or a local labor negotiation in New York.”

Maybe so, but it’s hard to keep the lines from blurring when one giant company is engaged in a nasty labor dispute. Last week, Needham, the president of Local 813, and representatives of another union, Local 108 of the Laborers, which fears that its own members who sort recyclables at the firm’s yards in Brooklyn and the Bronx are facing a similar confrontation, brought some 50 workers to the steps of City Hall to join with several councilmembers to condemn Waste Management’s conduct. The legislators suggested that the firm’s private problems could spill over onto the far larger municipal waste-hauling awards.

“We are the ones who review and approve these contracts, and we are going to make sure that these workers receive fair compensation and treatment,” said Queens councilman Hiram Monserrate. “This isn’t how you behave here. Not in this city.”

Actually, Waste Management has a friendly local face representing it here in talks with government officials, that of Peter Vallone Sr., the former City Council leader. As the firm’s chief lobbyist, Vallone’s Constantinople Consulting receives a $15,000-per-month retainer. “It’s always been my dream to resolve the city’s garbage problems,” said Vallone who, along with Giuliani, extended the original invitation to the big national firms to enter the city’s waste markets. “I don’t have anything to do with the labor part, but I think there are national issues at stake here,” he said.

Corporate spokesman McGrath said his client remains “ready, willing, and able” to continue labor talks. “Waste Management is trying to get a fair contract that will keep the employees among the highest paid in the industry and provide a competitive level of benefits. . . . Did they tell you that their members earn $23 to $25 an hour?”

They did. The union also pointed out that it had reached agreement on new contracts with other carting companies representing hundreds of other members, without a similar fight. Still, when Waste Management refused to budge, the union broke with precedent by offering, in the presence of the federal mediator, to start making contributions for health coverage. “That was a significant move for us,” said Needham. “We opened the door, but they didn’t want to do anything.”

Needham, along with his parent national union, believe that Waste Management’s strategy is to pick and win a fight in labor-strong New York and then impose similar conditions elsewhere. To that end, the union has conducted informational picketing at Waste Management sites in California, Seattle, and Washington, D.C., where fights with the company are also brewing over the benefits issues. In an inspired bit of propaganda, Teamsters president Jim Hoffa had his union rent a plane to fly over last month’s Daytona 500, where Waste Management is a major sponsor, pulling a sign that read: “WMI and NASCAR Want Some Drivers to Lose.”

Another labor leader, Mike Hellstrom, business manager of Laborers Local 108, characterized the fight with Waste Management as similar to another battle that organized labor has been waging on the political level. “This city has had this big fight over whether or not Wal-Mart and its poor benefits should be allowed here,” he said. “Well, we already have a Wal-Mart here— it is Waste Management.”