Jury award stings union
UNITE Here hit with $17.2 million decision
in Sutter defamation suit.
By Mehul Srivastava -- Bee Staff Writer
Published July 22, 2006
A PLACER SUPERIOR Court jury has awarded the Sutter Health hospital chain $17.2 million in compensatory damages in a defamation suit against a labor union that accused the hospital of using soiled linens in its maternity wards.
The jury's decision, if upheld, is one of the highest ever awarded against a labor union in the United States, and could cripple the finances of UNITE Here, a national union of about 450,000 workers in hotels, industrial laundries and apparel manufacturing.
"We are pleased that the union leaders are being held legally responsible for their reckless behavior," said Karen Garner, a spokeswoman for Sutter Health, which owns 26 hospitals and medical centers, including several in the Sacramento region.
A UNITE Here spokeswoman, Amanda Cooper, said Friday the union will appeal, adding that it still believes its allegations are true.
"We are not concerned with the dollar amount, because we do not anticipate having to pay it," Cooper said.
The suit stemmed from a labor dispute involving the union and a laundry service used by some Sutter Health facilities.
In early 2005, UNITE Here, which represented the workers at laundry contractor Angelica Corp., sent about 11,000 postcards to households in Northern California, warning recipients they "may be bringing home more than your baby if you deliver at a Sutter birthing center."
Angelica Corp. contracted with Sutter to clean sheets and towels for a number of its hospitals.
The postcards also said that Missouri-based Angelica Corp., which operated plants in Antioch, Fresno and Stockton, didn't ensure that its linens are free of blood, feces and possible pathogens.
"What these unions were hoping to do was to get Sutter patients to not go to Sutter hospitals, thereby forcing Sutter to put pressure on Angelica," said Robert Welsh, the lead attorney representing Sutter Health in the lawsuit, and a partner at the San Francisco-based O'Melveny & Myers. He cited internal UNITE Here documents as evidence of that strategy.
Cooper, the spokeswoman at UNITE Here, said the union still believed that the allegations were true, and pointed out that Sutter Health had changed some linen-related policies since the postcard mailing.
"Sutter Hospitals has increased their inspections of the Angelica plants and required that Angelica engage in regular sanitizing of trucks and carts used to deliver linen, among other changes," she said.
But some labor experts said the lawsuit signaled a trend they found troubling -- the use of civil laws to settle disputes with labor unions.
"What this represents is the further criminalization of labor union organizing," said Nelson Lichtenstein, a history professor at the University of California, Santa Barbara, and director of the Center for the Study of Work, Labor and Democracy associated with the university. "If this is upheld, it's another step in the destruction of labor law."
Lichtenstein pointed out that during most union protests, workers carry signs and make charges that could be considered defamatory.
" 'Wal-Mart is evil' or 'The company is unfair' -- those are all statements that you would make at a picket line. Does that mean you can get sued for defamation?" he asked.
"This kind of ruling results in a censoring of the picket line."
UNITE Here has used similar tactics before in other parts of the country, using testing to prove its unsafe laundry claims, said Richard Hurd, professor of labor relations at Cornell University.
"It's called secondary pressure," he said. "It puts pressure on the ultimate consumer, who is the only one with the real economic power."
In response, it is not uncommon for companies to use civil or criminal laws to try to thwart unions, said Hurd.
"Sometimes they might use racketeering laws to stop unions, and the companies have gotten a lot of mileage out of that," he said.
"It leaves unions in a really weak state, and it certainly fits the mold of companies playing hardball with unions."
Lichtenstein said the practice dates back to a 1906 case when workers at a hat manufacturing company in Danbury, Conn., were fined for urging customers to boycott the company's hats.
"Here, (Sutter) has gone to a civil court to criminalize ordinary, perfectly normal propaganda techniques," he said.
"And that's troubling."
Lawyers for Sutter Health, which filed its lawsuit in April 2005, estimated that the appeals process will take at least 1 1/2 years.
The trial opened 3 1/2 weeks ago and ended this week.