Texas Employer Wins $5 Million from Bullying Union

For the first time in American labor law history, a jury has found that a union defamed and disparaged an employer while waging a bitter organizing campaign, costing the union at least $5.3 million. 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. SEIU declared war and waged an all-out campaign against PJS. It recruited 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. Of the 25 or so claims filed, only one yielded any results: a 2008 determination that one worker was shorted $1,854 in overdue wages. 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 (NLRB) clearing the company of any wrongdoing, or because the union withdrew the ULP.

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. The union directed this information to PJS customers, causing at least 12 businesses to sever their relationship with the janitorial service. One customer described at trial how she decided to fire PJS after union protestors stormed into her building and occupied her conference rooms to protest her relationship with PJS.

Not willing to be bullied, PJS filed a lawsuit against SEIU Local 5 in Texas state court in 2007 alleging that the union’s defamation and disparagement directly led to lost business. The union used every trick in the book to stall the litigation as long as possible, including filing motions to dismiss the case and seeking appeal when not receiving satisfaction at the trial court.

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 on September 6 and awarded $5.3 million in damages against the union, which represents every dollar sought by the employer at trial. This amount comprises an estimate of the company’s lost business, not including punitive damages. The company also seeks nearly $2.5 million from the union in prejudgment interest.

The jury found that the union showed reckless disregard for the truth when it waged its organizing campaign against PJS, especially given the fact that the company was vindicated at just about every step when its business practices were examined by the USDOL and the NLRB. The company uncovered evidence that local union officials celebrated each time that PJS lost business. Internal union emails also revealed that its goal was to force PJS to lose enough business that it would either become irrelevant in the market or come crawling back to the union for help.

This trial was the first time any branch of the SEIU was forced to defend its organizing tactics to a jury. In 2011, a similar case alleging racketeering allegations against SEIU seemed destined for a battle in a Virginia federal court, but the union settled the case with the employer on the eve of trial.