Piston Group files suit seeking recertification as minority-owned business
Detroit — Piston Group LLC has filed a lawsuit seeking the restoration of its status as a minority business with the Michigan Minority Supplier Development Council, according to a press release issued Tuesday by the group.
The lawsuit filed in Wayne County Circuit Court claims that the actions taken against the Black-owned auto supplier by the council and its president Michelle Robinson "were 'vindictive, willful, wanton, or malicious' and have negatively affected the holding company’s business relationships," the company said in the release.
The Southfield-based company was founded and is owned and operated by former Detroit Pistons basketball star Vinnie Johnson, who also serves as CEO and chairman of the board of directors.
“We are confident that Piston Group’s rightful designation as a certified minority-business enterprise will be recognized by the courts, and we welcome the opportunity to present our case,” said Piston Group attorney Mark Zausmer in a statement. “Vinnie Johnson owns and controls 100% of Piston Group — this is a minority-controlled business under every applicable standard.”
The Michigan Minority Supplier Development Council had not yet received a copy of the lawsuit on Tuesday, but found "its reported premise to be without merit," spokesman Michael Layne said in a statement. "Furthermore, 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 the rules that the organization applies to all of its member MBEs."
The council in February revoked the certification of Piston Group’s four subsidiaries: Piston Automotive, Irvin Automotive Products, Detroit Thermal Systems and AIREA, according to the company. A minority business certification from the council aids the group as it bids on automotive supply contracts.
The lawsuit alleges Robinson “threatened” Johnson with decertification on multiple occasions after the company rejected a request for a $300,000 donation and declined to participate as a sponsor in a golf outing in 2019.
To be certified, companies must be controlled by U.S. citizens, be at least 51% minority-owned operated and controlled, be a profit enterprise and located in the U.S. or its trust territories, and have the management and daily operations done by the minority ownership members, according to the council's website.
Piston Group claims in its lawsuit the council revoked its certification based on the requirement that daily management of operations be handled by an ethnic minority.
“That is a completely erroneous interpretation of how Piston Group operates,” Zausmer said in a statement. “While the subsidiaries’ CEOs are currently white, Vinnie Johnson is the one who has ultimate authority for all decisions within each Piston Group company and is involved in the daily operations of these companies in a manner that would be expected for a business of Piston Group’s size."
The council called decertification a "rare occasion," and said when it is required "careful consideration is given at each stage of the process," and ultimately the decision to decertify a company is made by a certification committee made up of the council’s corporate member representatives, which is subject to review by an appeals committee, Layne said, and "neither the council’s president & CEO nor any member of her staff has a vote on any case involving the appeal of a certification decision."
"Our policies are not designed to create wealth for one individual, but to create wealth for entire communities of color through entrepreneurship," Layne said.
"We are committed to the success of all certified minority business enterprises. We cannot make exceptions to the standards of certification based upon political affiliation, celebrity status or other factors."