SEIU Wins $737,850 Verdict in Trial Against NUHW

by Randy Shaw on April 9, 2010

The jury has awarded $737,850 to SEIU in its civil lawsuit against NUHW and 25 of its leaders. Twelve of these leaders won defense verdicts against SEIU. The largest award was $724,000 against NUHW, but this amount is close to the aggregate of the individual claims, and appears to mean that if the judgment ultimately stands, SEIU could collect either from NUHW, or from the individual defendants, but not both (the court announcement of the verdicts did not total the claims, which is why both unions and myself erroneously thought they were combined, and announced the verdict as $1.5 million). The jury awarded the bulk of the damages because it believed the former SEIU-UHW leadership team was not doing its job in the month prior to SEIU’s placing the local in trusteeship; the jury awarded no money in response to SEIU’s claims of conspiracy, or stolen or misappropriated funds. The jury verdict is far less than the $25 million SEIU sought in the action, and reflects the jury’s conclusion that defendants should refund their January 2009 salaries, and also reimburse SEIU for directing staff to spend the month resisting trusteeship and working to form NUHW rather than on their SEIU activities.

SEIU’s trial against NUHW is now over, and the spinning of the verdict’s meaning soon begins. While SEIU will argue that the jury vindicates the union’s investing millions of dollars in time and money on the case, the trial achieved none of SEIU’s major goals.

The Lawsuit’s Goals

SEIU’s civil lawsuit against NUHW and 25 former SEIU-UHW staffers had four goals. The first three were to deplete NUHW resources by forcing its leaders to spend time and money defending themselves, send a message to hospital and home care workers facing elections that NUHW cannot not be trusted, and turn the Rosselli leadership team into a cautionary example for other SEIU locals that are considering publicly questioning President Stern’s agenda. None of these goals were achieved by the verdict.

First, NUHW has far more organizing resources today than at any point since the trusteeship began. NUHW’s organizing was not impeded by the trial. Second, the verdicts say nothing about workers not being able to trust NUHW. To the contrary, the verdicts punished former SEIU-UHW leaders for providing too much loyalty to members. Had NUHW leaders gone along with the transfer of home health care workers out of the local without a vote, the trusteeship would not have been imposed and many would not have jury awards against them today.

Significantly, Sal Rosselli, long described by SEIU as the leader who single-handedly pushed SEIU-UHW over the edge, did not get an award much larger against him than the others (the award against Rosselli was $70,600, Borsos, Lewis, Martin was $66,600, Goldstein $73,850, with Cornejo and others at $36,600. Paul Kumar won a defense verdict). Third, as for the lawsuit deterring internal SEIU criticism, since the lawsuit began two major SEIU locals — 888 in
Boston and 1021 in the San Francisco Bay Area — have elected reform slates.

The fourth reason for the lawsuit, perhaps the strongest of all, was personal. SEIU leaders deeply resented the former SEIU-UHW leadership team’s argument that they were more committed to empowering workers, and won stronger contracts, than the Stern administration. That’s why SEIU primarily seeks to undermine its rival through personal attacks against NUHW leaders like Sal Rosselli, Barbara Lewis, and John Borsos, and why UHW Trustee Dave Regan told me that his goal was to make sure that those who left SEIU to form NUHW “never again work in the labor movement.”

But this verdict will not cause any NUHW leaders to leave the labor movement. And I think these verdicts could well elevate the status of these leaders as principled labor organizers who were willing to put their jobs and incomes on the line rather than betray their members.

Who Benefits? Because the national media and California newspapers ignored the trial, SEIU got no public relations boost from the proceedings. And the trial did nothing to bolster SEIU’s support from other unions or labor activists; in fact, anger over SEIU’s spending millions of dollars to attack another union reaffirmed its increasingly outcast status in the labor movement.

It’s also worth noting that SEIU argued at trial that even if its international staff were engaged in openly criminal conduct, that this would not allow the leadership of its locals to attempt to move workers to another international union.

Judge Alsup appeared incredulous at hearing SEIU’s perspective (spoken outside the jury’s presence), and this position is hardly likely to boost SEIU as a symbol of union democracy. SEIU’s litigation strategy also exposes the union’s mistaken assumption that it could wage war in California against NUHW, launch a nationwide campaign of raids against former ally, UNITE HERE, and also implement its political agenda around immigration reform and the Employee Free Choice Act (EFCA).

When I asked SEIU Executive Vice-President Eliseo Medina in a conference call soon after the trusteeship was imposed how he could both be the trustee for SEIU-UHW and lead the union’s fight for immigration reform, he replied that it would be no problem but he would probably get more grey hairs. But after Medina declared this week that “ICE field officers have been acting like cowboys, more interested in adding scalps to their belts than doing their jobs targeting criminals and abusive employers,” it is hard not to conclude that Medina’s California responsibilities distracted him from addressing Obama Administration immigration failures much earlier.

Will the trial outcome make it easier for SEIU to convince workers that their rival union is “corrupt” and not worthy of support? It could well have the opposite impact. Consider that SEIU has been arguing for the past year that Sal Rosselli “stole” $3 million from members, but then excluded this allegation from its lawsuit. SEIU has long been cherry-picking quotes from the trusteeship hearings and Judge Alsup’s pre-trial rulings to tarnish NUHW, yet workers in hospital after hospital are still voting for NUHW by large margins.

The chief beneficiary of this trial is likely to be hospital owners USC University Hospital in East Los Angeles, who will use the jury verdict as part of their ongoing strategy to convince workers to vote for “no union.” Management will not only make the case that an independent jury has confirmed that workers cannot trust NUHW’s leadership to protect members, but will also argue that workers should avoid being caught in the middle of inter-union disputes so rancorous that they end up in federal court.

I have heard few voices outside SEIU who believes that this lawsuit well serves the labor movement, and the verdict is unlikely to change this. In fact, California Democratic Party Chair John Burton responded to the verdict by saying, “at a time when workers across California are facing layoffs and cuts to their wages and benefits, it’s a shame that SEIU has wasted members’ dues money litigating a smear campaign.”

Note: I rushed right from the courtroom to get out this story, and some of my numbers on the verdicts may be slightly off.

Randy Shaw is the author of Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century., which will be out in paperback in July.

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