Corporate Campaign Results in $7.8M Award Against Union

By Allen Smith, J.D. Oct 14, 2016
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The Service Employees International Union (SEIU) had to defend its organizing tactics to a jury for the first time ever and lost when a jury found that it wrongfully interfered with the unionizing target's business relations.

The SEIU's overly aggressive organizing proved to be costly for the union, which has been ordered to pay $7.8 million to Professional Janitorial Service of Houston (PJS).

Decade-Long Fight

PJS has been fighting the organizing drive for nearly 10 years, filing suit against the union on May 3, 2007. During that time, the SEIU intentionally tried to harm the company by costing it business, according to Kevin Troutman, an attorney with Fisher Phillips in Houston.

"What is unusual about this case is that PJS fought these tactics all the way through trial," noted Phillip Wilson, president and general counsel of the Labor Relations Institute, a labor relations consulting firm based in Broken Arrow, Okla. "Most employers aren't willing to go the distance."

The SEIU filed many claims during its corporate campaign, including:

  • 25 wage claims with the Department of Labor asserting that the company forced employees to work off the clock. Of these claims, only one resulted in a finding of overdue wages—a 2008 ruling that one employee was due $1,854 in wages.
  • 19 unfair-labor-practice complaints with the National Labor Relations Board, all of which were either resolved in the company's favor or which the union withdrew.

The union stated in its handbills, speeches and rallies that PJS regularly withheld pay, forced employees to work off the clock and engaged in unfair labor practices—statements that were found to be untrue, Troutman noted.

The SEIU also interfered with PJS's relationships with customers; about 12 companies ended their relationships with PJS. One customer severed her relationship with PJS after the union stormed her office and occupied her conference rooms to protest her hiring PJS, Troutman noted.

The local union had celebrations every time PJS lost business, he added.

A jury awarded PJS $5.3 million on Sept. 6, and the court awarded that amount and an additional $2.5 in prejudgment interest on Sept. 26.

New Path for Employers

"Results like this should encourage other companies to follow suit," Wilson said.

The case gives employers a new tack they can consider taking and "a path for employers to push back" when there is a corporate campaign, Troutman said.

Rather than accept cards signed by employees in favor of joining a union, PJS insisted that the SEIU would need to win a secret-ballot election to represent PJS workers. This gave birth to the union's "all-out" corporate campaign, said Peter List, CEO of Kulture, a national labor employment consultancy based in the Charleston, S.C., area.

Some employers targeted by unions sign neutrality agreements, making it possible for a union to easily organize, according to Troutman.

But he advised those companies that resist unionization to track e-mails and fliers so they have evidence if they go to trial that a union has made spurious allegations and wrongfully interfered with the organization's business relations. "If the union knows you're tracking it, the union might back off and not be quite as over-the-top as SEIU was in this case," he said.

Good relations with employees are essential to find out what the union is saying, he added. "Find out as much as you can about a union" that is seeking to organize a workplace, Troutman recommended.

The case underscores the fact that HR professionals can stand their ground and talk to their employees, telling them, " 'I don't believe it's in the best interest of the company to be represented by a union,' " he said.

"The decision is another opportunity for the strategic HR professional to advise the C-suite when the company is under attack with a corporate campaign begun by a union," said Michael Lotito, an attorney with Littler in San Francisco and co-chair of the Workplace Policy Institute, the firm's government relations branch. "Most businesspeople are not familiar with these tactics or the law surrounding them and believe that 'there has to be a law against this economic terrorism.' Well, now there may at least be a jury decision out there."

The SEIU plans to appeal the decision.

This case is Professional Janitorial Service of Houston Inc. v. Service Employees International Union Local 5, D. Harris County, Texas, No. 2007-27181 (Sept. 26, 2016).

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