Tuesday, March 16, 2010
Court Declines to Throw Out SEIU Suit Against Former Officers
By SHERRI M. OKAMOTO, Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday declined to dismiss a lawsuit filed by the Service Employees International Union against some of its former officers seeking restoration of property allegedly taken when the defendants broke away to form a rival labor organization.
Affirming the decision of U.S. District Judge William H. Alsup of the Northern District of California, the panel concluded that the Labor Management Relations Act provided federal jurisdiction for the international union’s action for breach of the union constitution against its former leaders.
The SEIU bills itself as the fastest-growing union in North America, with 2.2 million members and approximately 150 local affiliates, including United Healthcare Workers, which represents approximately 150,000 healthcare workers.
A series of policy disagreements arose between the parent organization and the UHW; the SEIU then imposed a trusteeship on UHW, pursuant to the SEIU constitution, under which the SEIU would take full charge of the UHW’s affairs.
Alsup found credible evidence that the then-leaders of UHW commenced a strategy to resist imposition of the trusteeship by disrupting union operations and gave tacit approval to the hiding or removal of UHW information and property.
After being relieved of management responsibilities in January 2009, the ousted UHW leadership resigned from the SEIU affiliate and formed a new union, the National Union of Healthcare Workers, to compete with the UHW.
The SEIU, UHW and others then filed suit against NUHW and the former UHW officers, seeking injunctive relief under Sec. 301(a) of the Labor Management Relations Act, which provides for federal jurisdiction over any action “for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce…or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties….”
In its complaint, the SEIU alleged that the former UHW officers “obstructed the effectuation of the trusteeship” in violation of the SEIU constitution by refusing to turn over monies, books and property of the affiliate, and wrongfully retained or destroyed UHW records and property. The SEIU sought temporary and permanent injunctive relief and a temporary restraining order.
Following a two-day evidentiary hearing last April, Alsup granted the TRO, finding the parent union had established a likelihood of success on the merits of its Sec. 301(a) claim as well as a likelihood of irreparable injury if relief was denied. He further determined that the district court had jurisdiction over the Sec. 301(a) claim since only injunctive relief was sought.
Alsup later granted the preliminary injunction in part and the SEIU moved to dismiss the defendants’ appeal disputing the existence of federal jurisdiction over the case as moot.
Senior Circuit Judge Myron H. Bright of the Eighth U.S. Circuit Court of Appeals was assigned to the appellate panel hearing the case and authored its decision.
Bright explained that an order denominated a TRO that possesses the qualities of a preliminary injunction is a reviewable interlocutory order and that Alsup’s order qualified.
He added that the appeal was not rendered moot by the district court’s subsequent order granting the preliminary injunction since the TRO had not expired and remained enforceable.
Turning then to the defendants’ jurisdictional argument, Bright noted that the Second and Eleventh Circuits have expressly held that Sec. 301(a) permits injunctive suits against individual defendants for violations of a union constitution and other circuit courts have permitted such actions against individual union members without expressly considering whether Sec. 301(a) provides jurisdiction over individual union members or former officers.
Although the defendants argued that the Ninth Circuit had foreclosed Sec. 301(a) jurisdiction over individual union members in Building Material & Dump Truck Drivers, Local 420 v. Traweek, 867 F.2d 500, Bright distinguished the 1989 case from the instant dispute since it had involved an action for damages based on individual wrongs and personal liability, not injunctive relief.
“Because the matter of injunctive relief was not before this court in Traweek, we conclude that Traweek does not foreclose SEIU from seeking injunctive relief,” he said.
Bright agreed with the Second Circuit’s reasoning in Shea v. McCarthy, (1992) 953 F.2d 29, that the “interests of accountability, consistency, conformity and stability [in labor relations] will be served if union officials who violate obligations” under the union constitution are subject to suit under Sec. 301(a), positing that the provision of a federal forum for injunctive relief against the former UHW officers would promote “the stability of the parent-local relationship and the representation of rank-and-file members.”
“The federal responsibility in promoting industrial peace and in providing a forum for disputes concerning union constitutions requires federal courts have jurisdiction to provide injunctive relief where an international union brings an action against the former officers of a local affiliate for breach of the union constitution,” he concluded.
Senior Judge Michael Daly Hawkins and Judge Milan D. Smith Jr. joined Bright in the decision.
The case is Service Employees International Union v. National Union of Healthcare Workers, 09-15855.
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