Global Hospitality Advisor: Court decisions focus on aggressive union tactics; offer hotel owners hope

Hotel Unions

This article first appeared in Hotel Business.

Recent court decisions indicate that the tables may be turning against unions that practice abusive tactics against employers. In general, unions enjoy a wide range of protections under the National Labor Relations Act (NLRA) when engaging in organizing activities, electioneering or campaigning to obtain employer or employee support. Hotel owners and their employees often have stood by, silently enduring invasions of privacy, when union leaders obtained confidential information to gain access to private employee or employer information for these purposes. Similarly, hotel owners have in recent years endured a barrage of pressure tactics, often involving communications filled with misrepresentations or defamatory statements, when unions pressured the hospitality industry into signing neutrality agreements. Two recent court rulings demonstrate that these “hard ball” tactics may be very costly to labor unions, and that employers may finally have some redress when under attack.

Under the rubric of “organizing,” Unite HERE, the major hotel workers union, has traditionally sought personal employee information to contact workers, and even their spouses, at their homes or places of business as a way to obtain employee support. The union has employed a number of questionable tactics to obtain such private information. One recent decision from a Pennsylvania court has stopped the union in its tracks. On August 30, 2006, U.S. District Court Judge Stewart Dalzell ruled that Unite HERE violated federal privacy laws by writing down license plates from cars parked on the lot of a Cintas Corporation plant in Emmanus, Pennsylvania. The union would track down the addresses of the car owners through the Department of Motor Vehicles to contact them at home in hopes of organizing them away from their own place of employment. But some of the employees, and their relatives who owned the vehicles, considered this harassment.

Cintas is a publicly held company that provides uniforms, laundry and promotional products for the hospitality industry. If Unite HERE succeeded in its efforts to unionize the Pennsylvania plant, it would have been an in-road for unionization of Cintas’ remaining 27,000 workers. After some of the employees complained about repeated home visits and phone calls from union leaders, the company encouraged its employees to take legal action, even paying the attorneys’ legal fees. The complaint turned into a class action lawsuit.

In the Cintas case, the Court determined that Unite HERE had violated a law prohibiting third parties from engaging in the tracing and releasing of personal information through motor vehicle records. Judge Dalzell ordered the union to pay $2,500 (plus attorneys’ fees and costs) to each of the employees who brought the original lawsuit, bringing the damages awarded in the range of $2.5 million to $5 million. The Judge stated that it was not assessing punitive damages or fines against union leadership personally, but could do so in the future.

Another blow to organized labor in the form of civil damages came from a Superior Court jury in Placer County, California where on July 21, 2006, Unite HERE was found guilty of “fraud, malice and oppression” against Sutter Health Hospitals and Birthing Centers. Sutter Health is a family of not-for-profit hospitals, physicians organizations and other medical services in Northern California. A jury hit the union with a $17.3 million verdict for intentionally and maliciously acting to harm the business of Sutter Health.

In this case, Unite HERE’s real gripe was not originally with Sutter Health; it was with a laundry company (Angelica Textile Services) that Sutter Health used. Unite HERE, which already represented 3,500 of Angelica’s employees, launched a nationwide campaign against Angelica to organize the remaining employees. As part of its campaign against Angelica, Unite HERE contacted Angelica’s customers, including Sutter Health. Initially, the union warned Sutter Health that if it continued to do business with Angelica, the hospital chain could face “service interruptions” in the form of delayed or halted delivery of laundry services. When Sutter Health failed to discontinue its contracts with Angelica, Unite HERE sent postcards to 18,000 women of childbearing age advising that newborn infants may be at risk of infection from unclean linens at the hospital. The disparaging remarks, which the jury found to be oppressive and malicious, resulted in one of the largest verdicts ever awarded against a labor union in the history of the United States.

In the Cintas case, the union was engaging in traditional campaign tactics. Under the guidelines created by the NLRB and the Courts, labor organizations may, for the most part, only contact employees when they are not at work, so obtaining personal residency information is crucial for the union. In the Sutter case, the union was engaging in a corporate campaign tactic by pressuring an innocent third party to obtain an advantage over the targeted employer, in this case Angelica. What is significant is that in both cases the employers could have filed unfair labor practice charges against the union for engaging in conduct arguably violative of NLRA. Rather than pursue the available remedies through the NLRB, which is often viewed as a union-friendly forum, the employers and employees in this case sought redress through civil suits for damages. What we may be seeing is the start of a trend in which employers or employees who believe their rights have been abused may look to bring monetary claims against unions in the form of assault and battery, trespass, interference with prospective business, invasion of privacy and defamation rather than pursue the often unsatisfying remedies available to employers under the NLRA. (For updates on both of these cases, please consult www.HotelLawBlog.com, maintained by my colleague, Global Hospitality Group® chairman Jim Butler. Click on the labor and employment tag on the main page of the blog for this information.)

# # #

Marta Fernandez is a senior member of the Global Hospitality Group® and a partner in the Firm’s Labor & Employment Group. As a management labor lawyer, Marta specializes in representing hospitality industry clients in all aspects of labor and employment, including labor-management relations including union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB; and implementation of preventative management strategies, such as executive training, arbitration enforcement and policies and procedures; defense of administrative and litigation claims, such as employee claims of sexual harassment and discrimination. For more information, please contact Marta Fernandez at 310.201.3534 or at mfernandez@jmbm.com.