By Donald James, Special to the Chronicle
Wayne County Circuit Court Judge David Groner issued a restraining order on Monday, June 28, mandating that the Michigan Minority Supplier Development Council (MMSDC) temporarily return minority certification status to Piston Group, owned by former Detroit Pistons guard Vinnie Johnson, while litigation continues. Groner’s ruling comes several months after MMSDC pulled the certification from the auto supplier (Piston Group) and four of its subsidiaries.
For 44 years, the non-profit MMSDC has helped certify Minority Business Enterprises (MBE) – such as Piston Group – develop their capacities and facilitate inclusive procurement opportunities. The Detroit-based MMSDC has more than 1,200 certified business owners and works with more than 300 corporate members.
According to MMSDC, the certification criteria require a business to go through a process that verifies it as minority-owned, managed, and controlled. Additionally, a minority business must demonstrate that a person or persons of color own(s) at least 51 percent of the business enterprise, manage(s) its “day-to-day” operations, and operate(s) independently. Each MBE goes through the process of recertification annually. The decertification of Piston Group and its four subsidiaries by MMSDC, prompted Johnson to file a lawsuit to have his MBE status restored.
In lawsuit court papers filed by Johnson and his Southfield-based Piston Group in May, it’s alleged that MMSDC and its president Michelle Robinson, vindictively, willfully, and wantonly, or maliciously “decertified” the Johnson-owned businesses because white men primarily run its day-to-day operations. This hierarchy within the upper operational levels of Piston Group, according to MMSDC, is a violation of rules for minority certification.
The lawsuit also alleges that Robinson has an ax to grind with Piston Group and has threatened to decertify the organization numerous times for such reasons as being upset that Piston Group hired an executive away from MMSDC, Johnson declining to donate $300,000 to an MMSDC initiative, and Johnson’s refusal to participate as a sponsor in the organization’s golfing fundraiser two years ago.
The temporary ruling is a significant development for Johnson’s legal team.
“We are delighted by the court’s decision,” Cinnamon Plonka, an attorney for Johnson’s Piston Group, said shortly after Groner’s ruling. “We will continue efforts to vindicate Mr. Johnson and establish to the court that Vinnie Johnson owns, controls, and manages Piston Group satisfying the necessary criteria to be certified as an MBE. The Piston Group is a minority-controlled business under every applicable standard. Today’s ruling will allow Mr. Johnson to continue to devote his energies to managing the day-to-day operations of all the Piston companies as a certified MBE and supporting our valued customers with outstanding quality, delivery, and service.”
MMSDC, which reportedly facilitates more than $36 billion annually in economic output between corporations and certified MBEs, issued a statement following Groner’s June 28 ruling.
“We are not pleased that a preliminary injunction was issued. The Piston Group and its four subsidiaries simply do not have enough day-to-day involvement of minority persons in their senior management to meet minority business enterprise status and MMSDC’s standards. The Piston group has presented a lot of misinformation, some quite egregious, in the court filings and public statements. We have not yet had an opportunity to respond. We look forward to presenting all the relevant facts and circumstances at the appropriate time to the court and a jury, if the case proceeds that far.”
In a statement released in May, the organization’s top executive said, “We find it unfortunate that a corporation that, for years, benefited from minority business advocacy has now chosen to sue the MMSDC rather than comply with rules that the organization applies to all of its member MBEs,” said Robinson, president and CEO of MMSDC. “However, MMSDC is in the business of certifying minority-owned businesses, not decertifying them without sufficient cause.”
Robinson’s written statement further explained that decertification is rare, but is a process done under careful consideration when required. The decision to decertify is not made by MMSDC’s president and CEO but by a certification committee comprised of the organization’s corporate member representatives.
The temporary order to restore the minority business status to Johnson’s businesses has vast ramifications, with future court proceedings and decisions determining whether Johnson’s companies will receive a more permanent minority certification status. Hundreds of millions of dollars are at stake. After all, some of Piston Group’s automotive customers include General Motors, Ford, Stellantis (formerly Fiat Chrysler), Toyota Motor Corp., and Honda Motor Co. Revenue for Johnson’s companies has been estimated at around $3 billion, making it one of the country’s largest African American-owned businesses.
Before Johnson filed his lawsuit, Leon C. Richardson, president and CEO of The Chemico Group, provided a basic contextual understanding of the certification process in general for all members. While Richardson is a former two-term MMSDC board member, he was not a part of the certification procedure.
“The certification process is rigorous,” said Richardson, whose Southfield-based company has been an MBE member for 32 years. “The process is designed to identify who owns, controls, and runs the day-to-day operations. The spirit of the program was not designed to enrich one individual; it was designed to enrich the entire minority community, and that means jobs, leadership, and opportunities to grow and develop.”
Piston Group’s legal representation contends that Johnson is the sole owner and chief decision-maker, meaning he makes all major decisions regarding the operation and management of the Piston Group companies. Yet, in exhibits presented to the Wayne County Circuit Court, organizational charts of Johnson’s businesses show photos and titles of top-tier executives under Johnson, which are predominately white males. This violates MMSDC’s criteria for certification.
Louis Green, president & CEO of MMSDC from 2005 until 2014, said the following in his duly sworn signed deposition that is a part of public documents related to the case.
“During my tenure with the MMSDC, Vincent Johnson and Piston Group LLC had periodic issues complying with MBE certification requirements due to the lack of minorities involved in the day-to-day management and operations,” Green said. “In the past when concerns were communicated, Vincent Johnson made the leadership and structural changes necessary to be in compliance with the MBE certification requirements.”
Why such changes by Johnson were not facilitated, this time for his companies to be certified before filing a lawsuit against MMSDC, is unknown, but more details will be revealed from both sides as the court case moves forward.
No one knows how the lawsuit will play out in court now that Groner issued the recent restraining order. However, there’s hope that Johnson’s businesses under Piston Group and MMSDC can both emerge as winners.
“I would hope that they find a happy medium and get back to business, where Vinnie Johnson and Piston Group could satisfy whatever certification requirements are necessary to be a member of the Michigan Minority Supplier Development Council,” Richardson said before the lawsuit was filed. “But certification is not a right; it’s a privilege.”