LA Metro recently agreed to pay $250,000 to settle a lawsuit over alleged violations of state and federal law and its own manufacturing policy related to a multi-million-dollar contract with South Korean Hyundai Rotem to update railcars ahead of the 2028 Olympics and Paralympics, according to a Los Angeles Times report.
According to the report, advocacy and research group Jobs to Move America sued the transit agency last year after LA Metro awarded a contract to Hyundai Rotem, part of Hyundai Motor Group, to build at least 182 railcars that would replace much of its aging fleet.
The group, Los Angeles Times reports, “alleged that LA Metro violated public contract laws and its own manufacturing policy by not disclosing required details about worker pay and benefits, and omitting commitments to hire a workforce of at least 10% ‘disadvantaged workers’ for the project,” which could include homeless people, single parents, veterans and others struggling in the workforce.
LA Metro, Los Angeles Times reports, settled the lawsuit last week for $250,000, which would cover the cost of legal fees, and agreed to modify terms of the $730-million order with Hyundai, according to records, to include the requirements. The deal means that the transit agency can go forward with its initial plans, according to the report.
LA Metro said “the delivery timeline has not been impacted” by the lawsuit, according to the report. The transit agency says it still expects to receive 42 cars ahead of the Games, as was laid out in the original proposal. Those cars are planned for use on the D Line, formerly known as the Purple Line. The route is currently undergoing an extension project beneath Wilshire Boulevard and is expected to be completed by 2027. An additional 140 cars are expected to be delivered by May 2030.
The agency’s policy, which includes penalties for noncompliance, was adopted in 2022 “to ensure that federal and state dollars provided livable wages to blue collar workers.” LA Metro originally tried to update the contract with Hyundai when it learned of the violations, but Jobs to Move America believed the revisions were “not satisfactory,” according to the Los Angeles Times report. The group sued the agency and pushed for LA Metro to rebid the contract entirely.
“This procurement was an example of something that wasn’t done well,” said Jobs to Move America Co-Executive Director Madeline Janis.
The settlement, Jobs to Move America says, “serves as a compromise” and, according to the group, “is a win for transparency.” In addition to revising the contract with the requirements, LA Metro also agreed to hire an outside consultant “to improve future procurement strategies and to broaden public record access around its contracts,” according to the Los Angeles Times report.
“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,” Janis said. “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.”
According to the report, the next step will be to see if Hyundai complies with the new agreement. A major concern for Jobs to Move America over the contract’s lack of stipulations, Los Angeles Times reports, was related to Hyundai’s recent issues with U.S. employment standards.
Last year, the U.S. Department of Justice sued the motor company after finding that a 13-year-old girl had worked up to 60 hours a week along an assembly line in Alabama, according to the report. The suit, which also named auto parts supplier SMART Alabama and a staffing service, alleged child labor law violations.
Hyundai said that it “took immediate action” and that its suppliers cut ties with the staffing agency, according to the Los Angeles Times report.
“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,” Janis said, as reported by the Los Angeles Times.
