Rich Meneghello, BridgeTower Media Newswires
For the first time in American labor law history, a jury found that a union defamed and disparaged an employer while waging a bitter organizing campaign, costing the union at least $5.3 million. The September jury award spells bad news for aggressive unions, and provides a blueprint for those employers wishing to hold unions accountable for underhanded organizing tactics.
The case started about a decade ago, when a local branch of the Service Employees International Union (SEIU) plotted a strategy for entering the Houston-area janitorial services market. SEIU Local 5 unveiled its "Justice for Janitors" campaign to much fanfare, promising improved working conditions and higher pay for those who signed up.
The union's scheme targeted the six biggest building services companies in the area. Five of the six quickly ceded to union demands and signed neutrality agreements, clearing the way for easy union organizing. However, one of the six Professional Janitorial Service of Houston Inc. (PJS) stood up to SEIU Local 5 and said that the union would need to win a secret ballot election if it wanted to represent PJS workers. To the local union, this was a declaration of war.
The union waged an all-out campaign against PJS with unusual ferocity. It began by recruiting PJS workers to file wage claims with the U.S. Department of Labor, alleging the company withheld worker pay and forced them to work off the clock. The union also filed a wage and hour class action lawsuit against PJS and cited the lawsuit as confirmation that the employer was violating federal wage laws, despite the fact that the lawsuit was ultimately dismissed without a finding against the employer.
The union also filed unfair labor practice (ULP) complaints on behalf of employees let go from their jobs, alleging that their terminations were motivated by anti-union sentiment. However, each and every one of the 19 ULPs was resolved either by the National Labor Relations Board clearing the company of any wrongdoing, or because the union withdrew the ULP.
Despite the fact that the union found no joy through its wage claim efforts or unfair labor practice strategy, it spread the news that PJS routinely violated workers' rights. Through a coordinated campaign of fliers, handbills, newsletters, emails, letters, websites, speeches, rallies, and protests, it routinely published information describing wage violations and labor law abuses at the company. As a result, at least 12 businesses severed their relationship with the janitorial service.
Not willing to be bullied, PJS filed a lawsuit against SEIU Local 5 in state court in 2007 alleging that the union's defamation and disparagement led directly to lost business. The case finally went to trial in August 2016. After four weeks of evidence and testimony, the jury returned a 10-2 verdict in the company's favor and awarded $5.3 million in damages against the union.
According to company lawyers, this marks the first time any labor union was found liable for defamation or disparagement in connection with an organizing campaign. Although SEIU Local 5 has vowed to appeal, this decision is a momentous one and should have ripple effects over the national labor landscape.
Unions will no doubt pay attention to the jury's decision, and you should too. Businesses should feel emboldened to stand up to particularly egregious campaign tactics given the size and scope of this jury verdict. Consider the following practical lessons from this case.
First, if necessary, push back on any union attempts to bully. Regularly communicate with the union about any untrue statements, complaints or charges it initiates, calling them out as necessary. Keep records of your victories in the defense of the claims as well as the expense of defending them.
Next, budget and plan ahead. A stated union goal is to wear down the employer until it no longer has the financial resources to resist the multiple forums of litigation, internal unavailability and customer pressure. Therefore, maintain a contingency plan to manage anticipated litigation expenses, redistribute personnel duties as warranted, and develop an aggressive customer retention program (which includes copies of communications to the unions).
Another important step is homework. A critical component to PJS's success at trial was the introduction of SEIU's own "Contract Campaign Manual" as evidence. The company found the manual the union's playbook for conducting organizing campaigns by digging through public court files from a 2011 case in Virginia.
It included portions instructing workers to "disobey laws" they believed were unjust toward working people, and to threaten managers with accusations of racism and sexism as part of their organizing efforts. These kinds of messages resonated with the jury when they were called to judge the local union's actions. When in litigation, work with counsel to research the union on a national and local level to develop similar ammunition.
Finally, the company was able to use the union's own words, in the form of internal email traffic, to demonstrate SEIU's specific intent to cause financial harm to PJS through the use of unsubstantiated accusations. In the face of such irrefutable evidence, the union's denials of these actions only undermined its own credibility and undoubtedly resonated with the jury.
Although a company might not have access to a union's internal emails unless litigation is under way, review company officials' email traffic (and other correspondence) with union representatives for possible damning statements. It may be possible to display concrete evidence of bad faith or malicious motives using the union's own words against it.
It would be worthwhile to explore the evidence in this case to get a sneak peek into the inner workings of the union and get a sense for how it operates. You may also determine that the information could be put to use to sway uncertain employees during an organization campaign or decertification effort.
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Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers' interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter @pdxLaborLawyer.
Published: Mon, Nov 07, 2016
