The Los Angeles County Metropolitan Transportation Authority (Metro) has reached a settlement in a lawsuit concerning alleged violations of state and federal laws related to a substantial contract for the upgrade of subway cars in anticipation of the 2028 Olympics and Paralympics.
The lawsuit was filed by the advocacy group Jobs to Move America after Metro awarded a contract to South Korean manufacturer Hyundai Rotem, a subsidiary of Hyundai Motor Group, to produce at least 182 new rail cars aimed at replacing a significant portion of its aging subway fleet.
According to the allegations by Jobs to Move America, Metro did not adhere to required public contract laws and its own manufacturing policies. They criticized the agency for failing to disclose essential information regarding worker pay and benefits and for not committing to hiring at least 10% of “disadvantaged workers” for the project. This category includes individuals such as those experiencing homelessness, single parents, veterans, and others facing workforce challenges.
Last week, Metro agreed to pay $250,000 to settle the lawsuit, which will cover legal fees. Additionally, the transit authority will modify the terms of its $730 million order with Hyundai to incorporate the necessary requirements that address these allegations. This settlement allows Metro to advance with its plans for the subway car upgrades.
Metro confirmed that the delivery schedule for the new subway cars remains unchanged, with expectations to receive 42 cars before the 2028 Games. These cars are slated for use on the D Line, previously known as the Purple Line, which is currently undergoing an extension beneath Wilshire Boulevard and is projected to conclude by 2027. Furthermore, an additional 140 cars are anticipated to be delivered by May 2030.
In response to the lawsuit, Metro initially sought to amend the contract with Hyundai upon discovering the violations. However, Jobs to Move America deemed the revisions insufficient and subsequently opted to file a lawsuit, advocating for Metro to completely rebid the contract.
Madeline Janis, co-executive director of Jobs to Move America, remarked, “This procurement was an example of something that wasn’t done well.”
The compromise reached through the settlement not only modifies the contractual requirements but also stipulates that Metro will engage an external consultant to refine its procurement strategies and enhance public access to contract records.
Janis highlighted the importance of maintaining transparency and ethical conduct in public contracting: “It’s really important that the nature of the things like public contracting and the business of government be done openly, transparently and with the highest ethics and integrity.
We’re very confident now that Metro will have the tools in place to spend our dollars wisely, to build out our transportation system in a way that gets the most for our money and also gives us the best results.”
The next critical step involves monitoring Hyundai’s compliance with the newly established agreement. Concerns regarding Hyundai’s adherence to U.S. employment standards were raised due to recent legal issues, particularly a lawsuit filed by the Department of Justice last year.
This lawsuit exposed instances of child labor violations, including a shocking case where a 13-year-old girl reportedly worked up to 60 hours weekly along an assembly line in Alabama. The lawsuit not only targeted Hyundai but also included auto parts supplier SMART Alabama and a staffing agency.
In response, Hyundai stated that it took immediate action, and its suppliers discontinued their relationship with the implicated staffing agency.
Janis emphasized the implications of the settlement, stating, “What this [settlement] does is it ensures that Hyundai is held accountable for spending the money — about three-quarters of a billion dollars — in a way that’s going to maximize the creation of good jobs and opportunities for Americans and Angelenos.”
image source from：latimes
