Four years after Los Angeles’ public transit authority signed a $500 million deal with New Flyer, a Canadian bus manufacturer that committed to creating local jobs and paying a living wage, the public finally will find out if the company kept its promises.
A key ruling by Los Angeles County Superior Court Judge Mary H. Strobel is forcing the Los Angeles Metropolitan Transportation Authority to give the public detailed information about job creation and wages. The October ruling already has led to changes in agency practices.
David Sotero, a spokesman for the MTA, said the agency now automatically discloses job and wage data in contract compliance documents when a member of the public requests that information. The information no longer will be considered a “trade secret,” exempt from disclosure under California law.
In seeking the contract to manufacture 900 compressed natural gas buses, New Flyer earned points in its 2013 bid for promising to create new jobs in California and elsewhere in the United States. The company said it would pay these employees living wages and competitive benefits.
At minimum, the company appeared to have promised 69 new jobs in California, and as many as 180 more elsewhere in the United States, said Madeline Janis, executive director of Jobs to Move America, a coalition of labor, civil rights, community and faith-based organizations, which wanted the job and wage data.
In early 2016, Jobs to Move America asked the Los Angeles transit authority to provide data on whether New Flyer was keeping its part of the deal.
New Flyer sued to block that disclosure by filing what is known as a reverse public information act lawsuit. It claimed the data were exempt from disclosure because they were “trade secrets,” and under California law, could be concealed.
The MTA, which had planned to release the information based on California’s public information act, didn’t fight the company’s lawsuit. That left it to Jobs to Move America to spend more than 18 months in court challenging the company’s claims and trying to force the transit authority to disclose the information.
Strobel’s ruling could have wide influence beyond Los Angeles County. State judges around the country often look to other state courts when examining their state laws.
All but one state – Massachusetts – has a trade secret exemption, which is widely used by companies with public contracts to block disclosure of all types of data and corporate details. The practice was highlighted in Reveal’s “State Secrets,” a five-part series on state and local government secrecy.
Government agencies often rely on the contractor to decide what is or is not a trade secret and whether disclosure would harm the company. That is because the government agencies rarely are willing to challenge a contractor with whom they may have had a long and successful business relationship, and because the agencies themselves lack the expertise to challenge a contractor’s assertion that certain information should be considered a trade secret and therefore concealed.
Sometimes the process leads to peculiar outcomes, such as a case in West Virginia, where the contractor blacked out the toll-free number of a state agency, claiming that was a trade secret, exempt from public disclosure.
While Strobel did not invalidate California’s trade secret exemption, she found that New Flyer had not done enough on its own to keep the job and wage information secret and that, in any case, the public’s interest in learning whether the company had fulfilled the terms of the deal overrode the company’s privacy concerns.
“There is substantial evidence that applying the trade secret privilege in this case would ‘(lead to) injustice,’ ” Strobel wrote in her ruling.
New Flyer did not respond to a request for comment.
In a statement reviewed by the judge before she made her ruling, Janice Harper, New Flyer’s vice president for human resources, said that making the job and wage information public would harm New Flyer’s ability to compete for other public contracts, because it would allow competitors to potentially undercut New Flyer and poach employees.
Janis hailed the decision.
“We have set the precedent that wages and benefits now are not considered a trade secret,” she said.
Janis and her colleagues have been poring over the documents they recently obtained as a result of the court ruling, including New Flyer’s reports to the transit authority about jobs created and wages paid. They also are interviewing former New Flyer employees to cross-check the information.
“We now will go to find the workers,” Janis said. “We don’t know if what New Flyer reported is true.”