A Texas jury has awarded a company $7.8 million in compensatory damages and interest after finding Service Employees International Union Local 5 significantly damaged the company’s business through false claims of workplace violations. As a result, Local 5 has filed for federal bankruptcy protection.

In 2006, Local 5 launched the infamous “Justice for Janitors” campaign against several building service providers. One, Professional Janitorial Services of Houston Inc., refused to succumb. The union did its best to intimidate PJS and its customers. With the ubiquitous inflatable rats serving sentry duty at the company’s offices, Local 5 filed 19 labor law charges against the company (including for wage and overtime violations and discharges for union activity), then published the accusations as “facts.” None of the charges were found to have merit. Local 5 also used its political muscle to influence PJS customers to stop doing business with the company. In fact, later testimony revealed union officials wanted to “kill PJS.”

In 2007, PJS filed suit and fought the union through every stage of civil litigation. Finally, nine years later, a jury agreed with PJS and awarded it almost eight million dollars in damages.

The union filed a bankruptcy petition, saying bankruptcy protection will enable it to stay in business while appealing the “unjust judgment.” PJS argues the union should be required to obtain a $6.1 million bond before proceeding with an appeal.

The local union’s financial disclosure filings with the U.S. Department of Labor cast doubt as to whether Local 5 has the liquid assets to pay the judgment. PJS contends the Service Employees International Union in Washington, D.C. (Local 5’s parent organization) should subsidize their local union. “Justice for Janitors” was a campaign developed by the SEIU International; it was promoted and funded by the International in cities around the country.

Unions, be they locals or an international, generally have the ability to raise money from members for unexpected expenses by levying assessments on them, which the members are required to pay in addition to dues. There is no indication whether that will happen here. It remains to be seen whether and how much Local 5 ultimately pays PJS.

Attorneys will tell you that suing a labor union in these circumstances is an expensive and often losing proposition. However, this case shows that a single committed employer can stand up to a nationally funded corporate campaign. If your company is targeted, talk with your Jackson Lewis attorney to weigh your options.

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Photo of Thomas V. Walsh Thomas V. Walsh

Tom Walsh is a Principal in the White Plains, New York, office of Jackson Lewis P.C. He received a B.A., summa cum laude, from Long Island University and his Juris Doctor from St. John’s University. He is the author of “Recent Developments in the Weingarten Doctrine, The Board Shifts to the Right,” for the St. John’s University Journal of Legal Commentary. He is also co-author of the Atlantic Legal Foundation’s series “Leveling the Playing Field – What Charter School Leaders Need to Know About Union Organizing.” Mr. Walsh is a member of the New York State Bar Association and of the American Bar Association, and participates in the labor and employment law sections of both organizations.

Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Philip B. Rosen Philip B. Rosen

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.