

Two lawsuits filed by employers in the past two months invoked the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, to claim unions have tried to damage their reputations and businesses through public-relations campaigns and other tactics. In both suits, the companies claim the unions are spreading false and damaging information through flyers and the Internet and at demonstrations.
The suits, which the unions say are baseless, mark escalating tensions over organizing methods. Unions want to organize workers by approaching them off company grounds and having them sign cards in favor of a union while the company remains neutral, a process companies say subjects employees to intense pressure. Companies generally favor a secret-ballot election, which is held on company property and usually follows months or years of expensive, time-consuming and negative campaigning by both sides.
RICO was passed in 1970 to make it easier to prosecute organized-crime leaders when they couldn't be directly tied to murders or other crimes but when a pattern of racketeering existed. Civil RICO claims became common in the 1980s and have been filed in a variety of contexts, often against corporations, alleging fraud or illegal competition. The law allows for the recovery of triple damages.
While unusual, union-related suits filed under RICO laws instead of labor laws have precedent. In 1995, Food Lion LLC sued the United Food and Commercial Workers, claiming the union planted damaging reports in the media and filed frivolous regulatory claims. The case was settled in 2004.
In October, Smithfield Foods Inc. filed suit against the United Food and Commercial Workers, which has been trying for more than a decade to organize 4,600 hourly workers at the company's Tar Heel, N.C., plant. The suit claims that the union's campaign, which includes calls to boycott all Smithfield products, is "designed to destroy Smithfield's public image and inflict maximum economic damage."
Wackenhut, a U.S. unit of London's Group 4 Securicor PLC, filed suit last month accusing the Service Employees International Union, which has been trying to organize the company's security guards, of using "strong-arm" tactics that have caused it to lose contracts with customers.
"RICO grabs the headlines and demonstrates to shareholders and the public how seriously Smithfield and Wackenhut disagree with the unions' allegedly false statements," said Jeff Grell, who teaches a course on RICO at the University of Minnesota Law School and assists law firms on both sides of RICO litigation.
Extortion is difficult to prove in these situations, Mr. Grell says. It usually involves taking property, in the form of money, real estate or personal property, while these suits center on less-defined issues of reputation and the loss of business, which can be the result of broader economic factors.
G. Robert Blakey, a lawyer who helped draft RICO and is acting as legal counsel to Smithfield, declined to comment on the litigation. In statements released by the company, he likened the union's campaign to "actions of Mafia figures who arrange an illegal picket line and promise to remove it if the store owner agrees to take their garbage services." The United Food and Commercial Workers claims on its Web site that Smithfield's Tar Heel workers face "poverty wages, brutal conditions, crippling injuries" -- claims the company disputes.
Joe Hansen, president of the union, called the lawsuit "completely baseless." He added: "If they think that spending millions of dollars on this legal strategy will weaken our efforts to ensure justice and fairness at the Tar Heel plant, they are sorely mistaken."
Dan Murphy, corporate counsel and director of labor relations for Wackenhut, said the Service Employees International Union is distributing information that is "bereft of fact." Andy Stern, the union's president and a defendant in the case, called the lawsuit "an attempt to muzzle workers and their unions from speaking out on issues of corporate social responsibility."
Smithfield filed its suit in U.S. District Court for the Eastern District of Virginia. Wackenhut filed its suit in U.S. District Court for the Southern District of Florida.
(online.wsj.co)