Facts

The Service Employees International Union (SEIU) is the largest union in the United States, with 2.2 million members. The United Healthcare Workers-West (UHW) is an SEIU local union that represents approximately 150,000 hospital, nursing home, and home care workers in California. SEIU and SEIU-UHW brought an action against the National Union of Healthcare Workers (NUHW) and other defendants.

PLAINTIFFS' CONTENTIONS:
Plaintiffs alleged that the 24 individual defendants violated the SEIU and SEIU-UHW constitutions and their fiduciary duties to SEIU-UHW and its members by utilizing union resources to fight and obstruct SEIU's decisions. Plaintiffs contended that defendants breached their fiduciary duty by, among other things, forming a new, rival union and otherwise sabotaging SEIU-UHW while they were still officers and employees of SEIU-UHW. SEIU also alleged that defendants stole SEIU-UHW property, particularly membership lists, intentionally delayed concluding contract negotiations to injure SEIU-UHW, and canceled contracts, leaving the union's members without contractual protections or recourse.

DEFENDANTS' CONTENTIONS:
Defendants contended that, beginning in 2006, leaders of the SEIU and SEIU-UHW began to develop significant disagreements over a series of issues relating to union strategy, including how to carry on campaigns to organize non-represented hospital and nursing home workers and the level of involvement of members in making union decisions. Defendants contended that these differences escalated in the run up to the SEIU Convention in 2008 and came to a head when the SEIU decided to remove 65,000 long term care workers from SEIU-UHW and place them in another SEIU local union, without giving the affected workers the opportunity to vote on their transfer. When SEIU-UHW leaders fought against this decision and mobilized their members to oppose it, SEIU placed SEIU-UHW into trusteeship on January 27, 2009, removing its leaders and replacing them with officials appointed by SEIU. The day after the trusteeship was imposed, the former leaders of UHW resigned from the SEIU and formed NUHW. NUHW is competing with SEIU-UHW for the rights to represent SEIU-UHW members and other health care workers in California.

Defendants conceded that they had utilized SEIU-UHW resources to oppose the SEIU's decision to remove 65,000 UHW members without a vote and to prepare to oppose the anticipated trusteeship. They contended that all of their expenses were approved by SEIU-UHW's executive board, were supported by the union's membership, and were proper under federal law. They contended that the SEIU's decisions were motivated by officials' rivalry with SEIU-UHW's leaders and their jealousy over SEIU-UHW's successes. They denied that any SEIU-UHW resources were utilized to create NUHW.

Settlement Discussions

According to defense counsel: SEIU demanded $13 million and the dissolution of NUHW; defendants offered $13. According to plaintiffs' counsel: No demand was made that NUHW dissolve and the dollar figures provided above is materially inaccurate.

Damages

At trial, plaintiffs contended that the damages could range as high as approximately $4 million but that it was up to the jury to evaluate the extent of improper use of their own and others' SEIU-UHW staff time and attach a value to that. According to defense counsel: Prior to the trial, SEIU alleged that defendants and NUHW had caused approximately $25 million in damages to SEIU-UHW, including the diversion of defendants' salaries and other UHW resources for improper purposes at a value of $14 million; election organizing expenses caused by NUHW's use of SEIU-UHW membership lists to cause union representation elections to occur in Fresno and Santa Rosa at a cost of $3 million; improper legal expenses incurred for putting on an alleged fraudulent defense at an internal union trusteeship hearing for a total of $1.7 million; increased security costs of $1.5 million; and, lost dues of $227,000.

Result

Plaintiffs dismissed their claims against two defendants prior to trial and sought no damages against two others. The jury awarded damages against 16 of the individual defendants in amounts ranging from $31,400 to $77,850 and against NUHW for $724,000, and totaling $1,578,150. The jury assessed no damages against the remaining eight defendants.

Other Information

Plaintiffs' claims for injunctive relief for violations of the SEIU constitution and ERISA and defendants' motions for judgment as a matter of law are pending.

Deliberation

three days

Length

12 days