Connecticut Health Care Companies File Racketeering Lawsuit Against SEIU

By Matt Cover | October 26, 2012 | 7:55am EDT

President Barack Obama speaks at an SEIU event. (AP Photo)

( – Two health care management companies have filed a RICO [Racketeer Influenced and Corrupt Organizations] lawsuit against two chapters of the Service Employees International Union (SEIU), alleging that the union engaged in a criminal conspiracy against them during a strike over the summer.

The complaint, filed by Care One Management and Healthbridge Management – two affiliated companies that run several nursing homes in Connecticut and New Jersey – alleges that the union engaged in a mafia-like criminal conspiracy to extort concessions from the companies during a contentious contract negotiation. RICO is the 1970 law used by the federal government to combat organized crime.

The issue centers on a July 2012 strike called by the union in Connecticut after talks broke down over how much union members should have to pay toward their own retirement and health care plans. After failing to reach an agreement, the companies simply put their final offer in place – prompting the union to go on strike.

In the lawsuit – filed by Rosemary Alito, the sister of Supreme Court Justice Samuel A. Alito – the companies allege that the union engaged in criminal sabotage at several nursing homes in Connecticut.

The company accuses the union of tampering with patients’ medical files, removing dietary warning stickers from outside patients’ doors, switching the names of patients in an Alzheimer’s Disease care ward, and sabotaging equipment like wheelchairs, washing machines, and bed lifts.

The alleged conduct is part of a coordinated conspiracy, the companies claim, aimed at pressuring them to accede to the union’s demands.

“Defendants’ goals are part of a longstanding pattern of unlawful activities. In fact, for many years, Defendants have used extortionate and fraudulent methods against facilities in the healthcare industry, including those managed by Plaintiffs, to improperly seek to organize Defendants’ employees outside of the traditional legal framework for doing so in order to enjoy the financial benefits of new dues-paying members,” the companies claims in their lawsuit.

The companies allege that the SEIU, particularly its affiliates the New England Health Care Employees Union, District 1199 and the United Healthcare Workers East, SEIU 1199, are operating out of a union playbook known as the Contract Campaign Manual – a document that came to light during a similar lawsuit involving the SEIU from 2001 that instructs union members on how to conduct sophisticated public pressure campaigns in the course of union organizing efforts.

The suit alleges that because the local unions are using tactics common to the broader SEIU organization – tactics that result in criminal activity – that the union is engaged in a criminal conspiracy.

“This case is not about traditional labor activity. Rather, it is about two labor organizations affiliated with the Service Employees International Union (the ‘SEIU’) that have abandoned traditional organizing methods and contract negotiations in favor of extortion and other criminal and fraudulent tactics. It is about the ‘corporate campaign,’ a tactic set out in the SEIU’s widely publicized ‘Contract Campaign Manual’ (the ‘Manual’) and scrupulously followed by the two Defendants in this case,” the suit claims.

The suit also claims that the two local unions both engaged in other pressure tactics outside of the strike at the Connecticut nursing homes, including filing bogus legal challenges against real estate developments owned by the companies’ controlling partner Daniel Straus and staging protests in Fort Lee, New Jersey at Straus’ office. The suit also notes that the unions pressured New York University after it opened a law center in Mr. Straus’ name.

In fact many of the actions, except for the sabotage charges, appear on the union’s website and while they are not described there as criminal actions, the union boasts openly of the NYU protest, the march on the Fort Lee offices, and many other public pressure actions.

The union responded to the suit, calling it frivolous and attacking the companies for “putting profits ahead of patients.”

“With no justification for putting profits ahead of patients, this latest desperate action makes it clear that these corporations will do anything to divert attention away from their unlawful behavior aimed at avoiding a fair agreement with workers,” New England District 1199 President David Pickus said in an October 10 statement.

Pikus specifically denied the allegations of sabotage, calling them “contrary to our mission as caregivers.”

“We want to be clear that the actions that have been alleged at three of the HealthBridge nursing home facilities are inappropriate and contrary to our mission as caregivers and as a union. We condemn in the strongest terms any actions that could jeopardize care for nursing home residents.”

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