Longtime Labor Leader Leaves After Discovery of ‘Unintended Compensation’
Tom Lemmon announced his retirement last week, but a document obtained by Voice of San Diego reveals that prior to his departure, the Building Trades Council discovered that he received up to $200,000 he was not entitled to over the last five years.
Tom Lemmon, the longtime leader of the San Diego Building and Construction Trades Council, announced his retirement Thursday, but that announcement did not mention the circumstances that surrounded his departure.
A document obtained by Voice of San Diego indicates he resigned as part of an agreement with leaders of Building Trades, an umbrella group of construction unions, after the organization determined he had received between $100,000 and $200,000, and potentially more, in payments to which he was not entitled.
A Building Trades board member, in a statement to Voice of San Diego, said the payments stemmed from an inadvertent wage calculation error in 2017, and that Lemmon’s retirement decision was made independent of the discovery.
The document, dated Oct. 13, refers to the payments as “unintended compensation” that Lemmon received over the last five years, “perhaps exceeding an average of” $20,000 per year, “but likely not exceeding” about $40,000 per year.
Building Trades discovered the payments during a compensation review of its executives, according to the document. In the agreement, Lemmon agreed to resign from all offices he holds – he was both the Building Trades’ business manager, and CEO of a Building Trades-operated nonprofit that runs a low-income housing project in National City – effective Oct. 13.
In addition to Lemmon’s resignation, the agreement required Building Trades to defer to Lemmon in publicizing his departure, and to waive its right to recoup the “unintended compensation,” as long as he signs and returns a copy of the agreement by Nov. 4.
“The parties wish to avoid any fractious dispute between them regarding the Unintended Compensation, particularly in view of the many years of the Employee’s service to the Employer,” the document reads. “The parties have therefore negotiated this full and final settlement of the differences between them relating to such Unintended Compensation.”
Lemmon will also retain his pension, which he is entitled to when he turns 62 years old this week.
Lemmon announced his retirement Thursday, a day after his effective resignation, while speaking at a public hearing of the Metropolitan Transit System and on social media platforms. As of the most recent available public filings, Lemmon received $216,000 in compensation from the affordable housing nonprofit and associated organizations, including Building Trades.
The resignation agreement does not explain how Lemmon received the increased pay. It says that the payments were disclosed to the board, but also that the board and Lemmon agree that he was not entitled to them.
Lemmon offered to begin a repayment plan, the document says, but it concludes repayment would be legally complicated in a situation “in which the employer was aware of and arguably approved the payment of such compensation.”
In a statement, Dave Gauthier, business manager for SMART Local 206 and an executive board member for Building Trades, offered an explanation.
“As we were carrying out a review of the last five years of compensation for our leadership team, we realized that, due to an error in our wage calculations in 2017, Tom Lemmon’s salary was inadvertently higher than what we had intended,” Gauthier wrote. “At the time, our Board was told the amounts that Tom was actually being paid, but nobody caught the calculation error.”
He said Lemmon’s decision to retire had been made independent of the discovery, and that Building Trades commissioned a compensation study that determined the amount he received was commensurate with the work he had performed.
“Since Tom was planning on retiring, we decided the best thing to do was to write up an agreement that documented what happened and resolved this matter, so that it would not serve as a distraction to Tom’s retirement,” Gauthier wrote. “Tom did not have to pay us back any money.”
Lemmon emerged in recent years as the most prominent labor leader in the region. He has been active in local politics, endorsing candidates in elections and helping set policy priorities within San Diego’s ascendant progressive coalition. His team, for example, led the successful campaign to defeat Republican City Councilwoman Lorie Zapf in 2018. The winner, Council President Jen Campbell, became Council president with his help and survived a recall attempt again with significant support from Lemmon and the coalition with which he is aligned.
Project labor agreements – contracts stipulating wage and benefits standards for local construction work – have become routine on major public projects as he and others have ushered San Diego into increased Democratic control. But he also helped craft a doctrine of sorts in which unions would unite on causes outside their direct interest. For example, a deal for construction of a resort or a stadium wouldn’t happen unless both hotel workers and construction workers got what they needed.
The tactic had gotten so explicit that one hotelier accused Lemmon and allies of having crossed over into illegal extortion tactics. Concerns about that lawsuit and how they still need to fight it are mentioned in the agreement Lemmon had with his board to leave his job.
News of his departure attracted public accolades Thursday evening from powerful allies like Assemblywoman Lorena Gonzalez.
“He was critical to moving San Diego towards being a pro-worker, pro-union city,” Gonzalez wrote on Twitter.
More than just his organizing and tactics, Lemmon has a big personality and was known for intense negotiating as he did in the crucial moments when the City Council was trying to advance a measure to increase hotel taxes and fund an expansion of the Convention Center.
“Whether debating [Lemmon], working w/ him, agreeing w/ him, or disagreeing w/ him, I’ve always had the utmost respect for his heart & his authenticity,” Mark Cafferty, the CEO of the San Diego Regional Economic Development Corp. wrote on Twitter.
Voice of San Diego sought comment from Lemmon about the circumstances of his departure beginning Thursday night. He has since not responded to numerous messages and voice mails.