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Democracy on Trial: SEIU's lawsuit against union reformers goes to court
by National Union of Healthcare Workers
Wednesday Mar 17th, 2010 4:30 PM
For the last year, SEIU officials in Washington, D.C. have been suing 29 local union reformers and whistleblowers who exposed the union's corruption and backroom deals and helped healthcare workers protect their democratic right to join a new union after a hostile takeover.
SAN FRANCISCO—For the last year, SEIU officials in Washington, D.C. have been suing 29 local union reformers and whistleblowers who exposed the union's corruption and backroom deals and helped healthcare workers protect their democratic right to join a new union after a hostile takeover.

On Monday, SEIU lawyers will have to argue their case in a trial that labor journalists and historians say is an unprecedented attack on workers' right to a democratic voice in their union.

"Are elected union leaders accountable to the workers who elected them, or must they only take orders from above, even when workers oppose it?" asked Cal Winslow, historian and author of Labor's Civil War in California: the NUHW Healthcare Workers' Rebellion.

"SEIU is advancing a dangerous legal theory that leaders can be personally targeted to collect damages, even when there is no allegation of personal gain, simply because of a difference of opinion."

The suit stems from SEIU's hostile takeover of a local affiliate in January 2009. SEIU President Andy Stern seized control of California's healthcare union because its members and elected leaders had opposed him on issues of bargaining strategy and union democracy. In response to the takeover, workers voted to form an independent, member-led union called the National Union of Healthcare Workers (NUHW). Faced with petitions for more than 100,000 members to switch to NUHW, SEIU turned to aggressive legal maneuvers to suppress workers' efforts and deny them a free choice.

In addition to using false charges to delay federal and state labor agencies from scheduling union elections, SEIU filed a civil lawsuit, threatening damages of $25 million against former local union staff and elected leaders who have been supporting workers’ struggle to take back back their union.

SEIU has accused these respected California activists of an ever-changing list of offenses, including stealing money from the union—a slanderous claim that is contradicted by SEIU's own public statements and financial records, and appears nowhere in SEIU's lawsuit.

SEIU has reportedly spent down $10 million of members' dues money on four separate law firms to sue NUHW's staff and elected leaders—even suing NUHW's attorneys—and has squandered political capital by threatening many of the elected officials and labor leaders who helped raise money for NUHW's legal defense.

In contrast, SEIU assigned just two junior attorneys to an ongoing lawsuit against Tyrone Freeman, a Los Angeles union official appointed by SEIU President Andy Stern who is accused of stealing more than $1.1 million from low-wage workers.

Despite SEIU's legal strategy, NUHW has become California's fastest-growing union, with thousands of workers in hospitals, nursing homes, and Kaiser facilities joining NUHW over the last year. Caregivers have chosen NUHW over SEIU in 7 out of 9 elections.

* Download a factsheet on issues in the trial at http://bit.ly/trial-facts
* Read "Union democracy goes on trial" in In These Times by labor journalist Carl Finamore: http://bit.ly/finamore


Comments  (Hide Comments)

by workingjustice
Thursday Mar 18th, 2010 1:44 PM
This David and Goliath story of NUHW v. SEIU would be a lot more compelling had the ousted leaders of UHW who formed NUHW not done EXACTLY the same thing to their own labor representatives who assisted ambulance workers in leaving SEIU Local 250 (the former incarnation of UHW) just a little more than 4 years ago.

http://sacramento.bizjournals.com/sacramento/stories/2006/10/09/story6.html

Sacramento Business Journal

Friday, October 6, 2006

EMS union founder liable for fraud, judge says

Sacramento Business Journal – by Kathy Robertson Staff Writer

The leader of a Sacramento-based labor union that pushed the powerful Service Employees International Union out of a major role in representing emergency medical services workers in Northern California used SEIU’s own resources to do it, an Alameda judge has found.

Now, he might have to pay it back.

In a proposed decision that could be finalized within days, Alameda Superior Wynne Carvill found Torren Colcord, president of the National Emergency Medical Services Association, liable for fraud, trade-secret theft, breach of fiduciary duty and unfair business practices when he started organizing the new union while still working for SEIU.

Also named are former NEMSA official Tim Bonifay and Stacy Rutherford, who served as a temporary field representative for SEIU and did some organizing for NEMSA but is no longer associated with either union.

The proposed $442,000 judgment, signed Sept. 20 and expected to be finalized this week, requires the three defendants to reimburse SEIU for more than $300,000 it spent on a campaign to stop NEMSA. It also requires Colcord and Bonifay to pay back more than $40,000 each in pay and benefits– and levies $60,000 in punitive damages against Colcord.

The judgment, if it stands, is against the union officials, not NEMSA, but it constitutes a public relations nightmare for the 2 1/2 -year-old Sacramento labor union at a time when it’s struggling to nail down a contract for 2,500 workers in Northern California.

Unprecedented judgment

“It’s a substantial judgment for substantial wrongdoing,” said Dan Martin, administrative vice president for SEIU-United Healthcare Workers West. “They were on payroll, supposed to be looking out for members, and they did just the opposite. It’s an example of what happens when people put their own personal ambitions above the interests of the union.”

Colcord declined comment except to say the court action was personal and does not affect NEMSA. He referred questions to his attorney. Bonifay and Rutherford could not be reached for comment.

“Yes, they were working for SEIU while discussing and planning the union,” said Sacramento attorney Geoffrey Evers, who represents Colcord, Bonifay and Rutherford. “Field reps work around the clock. Nothing prevents them from doing it on downtime.”

The demand that the plaintiffs repay SEIU’s campaign costs to stop NEMSA hit a nerve.

“I’m shocked and amazed at the judge’s ruling,” Evers said. “The American system is winner takes all. There’s no law that requires winners to pay losers’ election costs.”

The proposed judgment, assuming it remains unchanged, will be appealed immediately, Evers said.

Others suggest the ruling is unlikely to change California law.

“It’s really a very unique set of circumstances, with people who worked as the most trusted people in a union — the business reps — working for an opposing union,” said Ted Franklin, an Oakland attorney who represents SEIU.

It’s unusual for business reps in one union to go start a new one, said Mike Leong, assistant regional director in the Oakland office of the National Labor Relations Board.

SEIU filed an unfair labor practice complaint on the same issue, but it was dismissed, he said.

“We don’t get involved if guys want to change jobs; that happens all the time,” Leong said. “If they threaten employees, that’s different. Just the fact that they formed a new labor union is not an unfair labor practice.”

The case dates back to early 2004 when talk of a new union surfaced and hundreds of workers in Sacramento, the Central Valley and Bay Area signed a petition to dump SEIU.

Ems only

The workers — critical-care nurses, paramedics, technicians and others employed by American Medical Response — wanted a union that focused solely on emergency services.

They said union juggernaut SEIU overlooked them in order to wage high-profile campaigns to organize hospitals and nursing homes. The union had about 90,000 Northern California members at the time; about 3 percent were emergency services workers.

After almost two years of battling SEIU, NEMSA won the right to represent AMR workers in Northern California in October 2005. Meanwhile, the lawsuit filed by SEIU shortly after the organizing began chugged its way through the court system. The bench trial ended in August.

The Sept. 20 proposed ruling found the defendants breached their fiduciary duty to work solely for the benefit of SEIU, committed fraud by concealing their true motives and misappropriated trade secrets when they used SEIU membership lists and contact information to wage their campaign for a new union.

The judge also found the defendants liable for unfair competition because they used their jobs at one enterprise to launch a competing one.

Both Colcord and Bonifay were found to have acted with malice, but Colcord was dubbed “the ringleader” in court documents and able to pay punitive damages, while the court determined Bonifay “clearly has a negative net worth.”

The court found Rutherford played a role in the organizing effort — and is thus liable with the two others for the $300,000 SEIU spent to stop the union drive — but determined he was an inexperienced “late-comer” to the organizing drive and not liable for anything else.

A lengthy fight

NEMSA has 5,000 members in 17 bargaining units in seven states. The biggest group is 2,500 workers at American Medical Response in Northern California, the focus of the initial fight against SEIU — and, now, a protracted battle over the first new contract under NEMSA.

Workers narrowly rejected the first contract proposed by NEMSA in June. The union sweetened the deal with a small pay hike the second year of the proposed contract, a third health plan option and health insurance opt-out that gives workers $130 a month if they decline these benefits.

New ballots have been mailed; they are due back Oct. 13.

“The last offer was rejected by eight votes, and the turnout wasn’t great,” Colcord said. “We hope it’s better this time.”

American Medical Response is standing by.

“There’s nothing really happening on our side,” said Doug Petrick, director of operations for the Sacramento Valley. “We’re waiting to see where they go with it.”

krobertson [at] bizjournals.com | 916-558-7869

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