For most of the summer, a strike involving 600 union workers at five Connecticut nursing homes grew increasingly nasty, as accusations of retaliatory firings were met with claims of workers intentionally putting patient safety at risk.
Now, those accusations have risen to a level not typically seen in labor disputes — a lawsuit claiming the United Healthcare Workers East, SEIU 1199, and New England Health Care Employees unions committed extortion under RICO laws, which were created to fight organized crime.
There’s even a portion of the complaint, which was filed in federal court in New Jersey on behalf of the nursing homes by attorney Rosemary Alito, who is sister to U.S. Supreme Court Justice Samuel A. Alito Jr., that acknowledges the unusual nature of the lawsuit.
“This case is not about traditional labor activity,” Alito, of K&L Gates, wrote in her complaint on behalf of Healthbridge and Care One Management. “Rather it is about two labor organizations affiliated with the Service Employees International Union that have abandoned traditional organizing methods and contract negotiations in favor of extortion and other criminal and fraudulent tactics.”
Created in 1970, the Racketeer Influenced and Corrupt Organizations Act is a federal law that provides added civil penalties for acts proven to be part of a criminal conspiracy of multiple conspirators. One reason the law is attractive in an employment setting is that it allows for treble damages. But proving damages caused by the acts of multiple conspirators is difficult.
At the heart of the complaint is an allegation that the unions enlisted the support of Connecticut politicians, including Gov. Dannel Malloy and Attorney General George Jepsen, who marched with picketing workers at Connecticut locations over the summer. The lawsuit claims those relationships affected investigations of the union activity by the National Labor Relations Board and other agencies.
The lawsuit seeks compensatory damages from the unions for causing the nursing home company “injury to business and property in the millions of dollars.”
Acts Of Sabotage
The labor situation has been brewing for about three years.
Starting in 2009, Healthbridge and its affiliated company Care One, were accused by the health care unions of violating federal employment laws and of overcharging Medicare for the patients in its centers. In turn, earlier this year, the nursing home company reported to authorities that disgruntled workers had committed acts of sabotage, such as removing patient name bracelets and throwing bedding on the floors, just before going on strike.
While some of those claims are being investigated by the Department of Public Health, so far, the only violations that have been found have been against the health care companies.
The NLRB has also investigated claims from both sides, finding there was evidence that the companies committed unfair labor practices by reducing contractually-obligated benefits for workers and disciplining them for wearing union stickers.
Although Malloy and Jepsen are not named as defendants in the lawsuit, both denied the allegations that accuse the unions of using political connections to gain a hand up in the labor dispute.
According to the complaint, Malloy has “publicly expressed support” for the unions’ position, and was the beneficiary of $400,000 in campaign expenditures from SEIU in the 2010 election. The governor, the lawsuit said, joined the picket lines in Newington on July 11, 2012, “despite the acts of sabotage and vandalism that occurred eight days earlier.”
Andrew McDonald, general counsel to the governor, called the mention of the governor’s appearance at the picket lines to suggest a criminal conspiracy “farfetched.”
“It sounds like their claim for RICO is that [the unions] working their networks is somehow a predicate act for RICO,” he said. “That’s a pretty farfetched notion that petitioning the government for grievances and concerns about issues of public importance would constitute the predicate acts necessary to support a RICO claim. Sounds like there’s some creative lawyering going on, but not too much pragmatic thinking.”
Susan E. Kinsman, an attorney and director of communications with Jepsen’s office, said any allegations brought in the lawsuit that suggest a criminal conspiracy involving Jepsen are not true. She pointed out that Jepsen recused himself from the matter, even though his office was not involved in the complaints against Healthbridge, after he marched on the picket line.
“Although the attorney general is not a named party, the complaint sets out allegations that he acted improperly in the timing of his recusal,” she said. “The office strongly disputes the accuracy of all of these allegations and will have no further comment regarding a pending lawsuit at this time.”
Jonathan Kreisberg, regional director for the NLRB in Hartford, said administrative court rulings against the nursing home company could cost it millions of dollars in back pay for the striking workers. “They seem to be much more interested in litigating and in dealing with the situation that’s going on here.”
While Kreisberg has been involved in hundreds of labor disputes, he’s never seen one allege wrongdoing under RICO against a union for reporting allegations to a government agency. “As far as the validity of this kind of suit, I know RICO claims have been raised over the years in relation to the actions of unions. I’ve certainly never seen a RICO suit aimed at unions seeking to redress employment claims to a government agency like ours.”
‘Creative, But Risky’
One well-known RICO case that involved organized labor was brought in 2008 by Smithfield Foods against the United Food and Commercial Workers International Union.
The case, filed in Virginia, claimed that the union “engaged in a corporate campaign” to force the company to accept collective bargaining terms by using threats and extortion. A judge denied the union’s motion for summary judgment. The case later settled, when the UFCW and Smithfield reached an agreement, under which the union agreed to suspend its boycott campaign in return for the company dropping its RICO lawsuit.
As highlighted in the Healthbridge case, one necessary legal requirement in a RICO case is that there was injury to a business or property because of financial donations by a defendant or made to them.
Gary Phelan, a labor and employment lawyer and partner at Cohen and Wolf in Westport, said using RICO in an employment matter is “creative, but risky.”
Because RICO was created to fight organized crime, Phelan said it carries with it stigmas that judges might frown upon. “It’s something that looks like RICO is being used for the purpose of influencing media coverage, rather than on laying the foundations for a lawsuit,” he said. “A number of years ago, soon after the RICO statutes were passed, there were a lot of people using them in other areas of torts, well beyond organized crime. There was a real backlash from the court, saying this is not what RICO was intended for.”
For that reason, Phelan said, “it’s highly unlikely the strategy will catch on.”
“This is not a trend,” said attorney Robert M. Mitchell, of Mitchell & Sheehan in Stratford. “It is an unusual response to union activity that is either the result of extreme union provocation or extreme legal recklessness on management’s part. It is a well-established labor law doctrine that filing an unjustified lawsuit against a labor organization can, itself, be an unfair labor practice that subjects the plaintiff-employer to legal sanction.”
Mitchell said the facts as described don’t point to a conspiracy that would be necessary in a RICO claim. “I do not think using politicians for support could ever be considered an illegal act,” he said.
An important reason why RICO claims aren’t often made in the employment context is that there are numerous facts that must be established to prove a criminal conspiracy. “RICO claims in employment matters are extraordinarily rare, especially due to the requirement that there be a combination of conspirators,” said Joshua Hawks-Ladds, an employment lawyer with Pullman & Comley.•