Labor unions regarded as corrupt organizations

Much has been written in recent years about corporate campaigns--unions' favored strategy of securing card-check agreements by launching an all-out blitz against an employer, via negative publicity campaigns, litigation, work stoppages, and other means. The use of corporate campaigns has risen dramatically; indeed, a 2007 survey of healthcare HR professionals found that the use of such campaigns has doubled in healthcare union drives, for example.

However, in two high-profile lawsuits filed in 2007, employers are challenging these methods in court. The newest employer defense to corporate campaigns: the RICO suit. But other strategies have been adopted by employers as well, with mixed success.

Smithfield complaint. On October 17, Smithfield Foods filed a lawsuit against the United Food and Commercial Workers (UFCW), labor federation Change to Win, and several other entities and individuals alleging a "malicious" and "extortionate" pressure campaign by the UFCW. The lawsuit alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO) as well as extortion violations under North Carolina and Virginia law.

According to the 99-page complaint, the union and its representatives have attempted unsuccessfully to organize the hourly employees at its processing plant in Tar Heel, NC. The lawsuit alleges the union and its representatives abandoned the organizing efforts in favor of a pressure campaign aimed at driving Smithfield out of business unless the company agrees to recognize UFCW as the exclusive bargaining representative at the Tar Heel plant.

The lawsuit goes on to detail the union’s alleged tactics: "almost daily publication of false, misleading, baseless, negative and/or damaging information about Smithfield to countless third parties, unlawful interference with Smithfield's existing and prospective business relations, orchestration of frivolous regulatory investigations, and communications with financial analysts aimed at reducing the value of Smithfield stock."

Not so fast, said the union, issuing a swift response to the filing. "In effect, Smithfield's suit attempts to prevent petitioning national and state government bodies with grievances," the UFCW noted in a press statement. "It seeks to prevent organizations from informing and petitioning the public to support causes. It seeks to prevent consumers from learning about the working conditions that exist where products they buy are produced. It seeks to label national, state, and local public officials, religious and community leaders as unwitting dupes of the UFCW because they support the cause of justice at Smithfield's Tar Heel plant. It seeks to avoid responsibility for company violations of workers' federal right of free association.

"The Smithfield lawsuit is an assault on fundamental American values," the union continued. "It ultimately seeks to ensure that only the voices of the powerful are heard." The UFCW said it would "aggressively continue to expose Smithfield's irresponsible corporate behavior wherever it occurs," noting it would not be "bullied" by a "baseless lawsuit.

Wackenhut suit. The 1.9 million-member Service Employees International Union (SEIU) is facing a similar suit, this one filed weeks later by Wackenhut Corp, a UK-owned security company. Wackenhut filed its civil action on November 1 in response, the company said, to the union's "malicious, four-year, international corporate campaign to force Wackenhut to recognize the Union as the employees' bargaining representative while denying the employees their federal rights to free choice and a secret ballot election." The lawsuit alleges RICO violations and seeks injunctive relief, treble compensatory damages, and costs.

The SEIU's reaction to the lawsuit was more understated. Valarie Long, SEIU's director of property services, merely noted, "In the last month alone, Wackenhut security lapses were confirmed at one nuclear power plant, and Wackenhut guards were caught sleeping on the job at another nuclear power plant. Instead of addressing the problems that led to the lapses, Wackenhut has chosen to fight its employees' efforts to improve security. As long as Wackenhut continues to oversee lax security at nuclear power plants and other sensitive sites, and undermine efforts by SEIU and others to raise the standards of private security in America, SEIU will continue to tell the truth about Wackenhut's record."

Other court actions. Employers are using other litigation strategies to counter union corporate campaigns and other organizing abuses. For example:

* DHL Express filed a defamation action in Massachusetts against the International Brotherhood of Teamsters after the union's agents distributed a leaflet at a baseball game which pictured an elderly woman, lying in bed, that reads "DHL fired my son Chris for speaking out against injustice in the workplace now I have to live in a shelter."

* An Ohio state court will hear a defamation action filed by Cintas Corp against UNITE HERE in which the uniform company claims the union's fake press release about an NLRB decision caused a drop in its stock value of $300 million within twenty minutes.

* A federal district court in Pennsylvania held that UNITE HERE violated the federal Driver's Privacy Protection Act of 1994 when it wrote down the license plate numbers off the cars in a company's employee parking lot and checked the numbers against state motor vehicle records in order to obtain home addresses of employees it was trying to organize. The court awarded liquidated damages to each of the plaintiffs.

* A jury in California found UNITE HERE acted with fraud, malice or oppression when it pressured customers of laundry company Angelica in an effort to secure a card-check and neutrality agreement. The union had launched a postcard campaign against Sutter Health, a prominent nonprofit hospital system in California and one of the company's large customers. The union mailed postcards to current and former patients, as well as to women of child-bearing age within the community at large, urging them to "Protect Your Newborns" and suggesting that Sutter's laundry service did not ensure clean linens were used in the hospital. It claimed the hospital's linens contained "blood, feces, and harmful pathogens." The hospital sued the union in state court, claiming libel, unfair business practices, and other causes of action. A jury found the union liable for more than $17 million in damages for harm to Sutter's business and reputation.

* A New York City developer sued to force the laborer's union to cease its campaign to force him to use union labor on construction projects. Last month a state court judge granted a temporary restraining order preventing the union from erecting a 15-foot inflatable rat outside his home.

* A federal district court judge in New Jersey, on the other hand, denied a motion by Tropicana Casino in November to enjoin UNITE HERE from "interfering" with the casino in the conduct of its business. The employer charged the union was at least partly to blame for a 20 percent drop in revenue, after the union called casino customers with rumors of poor service and unsanitary facilities, and publicly criticized the casino to investors and media outlets. The union's conduct amounted to speech, the judge held, which did not constitute "interference."

Key NLRB ruling. A significant ruling issued by the National Labor Relations Board in September will no doubt further encourage employers to consider adopting an aggressive litigation strategy to fend off a corporate campaign. The ruling should reduce employer fears of generating possible unfair labor practice charges while pursuing a course of litigation against a union.

In BE & K Construction Co, an employer, a nonunion construction company, won a contract to modernize a steel mill, and various unions attempted to delay the project. The unions lobbied for adoption and enforcement of an emissions standard, picketed and handbilled at the construction site, filed a state court action alleging violations of state health and safety laws; and launched grievances against the employer's joint venture partner. As a response, the employer filed suit in federal court seeking damages under the Labor Management Relations Act and also asserting violations of the antitrust laws. However, the employer's actions were dismissed. The unions filed unfair labor practice charges. A 3-2 majority of the NLRB held the employer did not violate the National Labor Relations Act by filing and maintaining the reasonably based but ultimately unsuccessful lawsuit against the unions, regardless of the employer's motive for initiating the lawsuit.

The ruling in essence confirms that merely filing a lawsuit is not an unfair labor practice. The right of access to the courts is an aspect of the First Amendment right to petition the government for redress of grievances, the Board noted. For the Board to declare a reasonably based, but unsuccessful, lawsuit to be an unfair labor practice burdens the First Amendment right to petition, determined the majority. Thus, the Board formulated a new standard for determining whether a lawsuit is reasonably based, noting the primacy of the First Amendment right to petition, even in circumstances where the right to petition collides with the interests underlying the NLRA.


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