Hospital Firm Claims Unions Violated RICO
(CN) - The operator of a national chain of acute care hospitals says labor organizers conspired to unionize its facilities, going so far as threatening to destroy the lives of executives who stood in their way.
In a federal lawsuit filed in San Francisco, Prime Healthcare Services Inc, a hospital management company with facilities stretching from California to New Jersey , says that in pursuing growth through a non-union business model it ran afoul of the defendant Service Employees International Union , its subordinate United Healthcare Workers West, and the CTW Investment Group.
"Prime's position as a largely non-union competitive alternative to hospitals organized by Defendants threatens Defendants' dual objectives of (a) maintaining and expanding their own representation of healthcare workers, and therefore, maintaining and increasing monies paid into Defendants' own coffers, and (b) increasing labor costs and inefficiencies at hospitals, like Prime, that compete with unionized healthcare providers," the plaintiff says.
In response, Prime says "Defendants entered into a agreement and conspired to target and to attack Prime with the ultimate objective of either unionizing Prime, thereby altering its cost structure and business model, or eliminating Prime from the market altogether; either result benefits Defendants.
Prime says the defendants previously targeted and attacked other hospital operators who eventually "capitulated to Defendants' unlawful and extortionate attacks."
"This case is not about the well-recognized right of employees to engage in collective action and form or join a union," Prime maintains. "Rather, it is about several labor organizations and their executives abandoning the traditional legal framework for organizing employees and, instead, entering into a conspiracy to adopt and to implement strong-armed, extortionate tactics to get what they want.
"While Defendants methods are wide-ranging and elaborate, their purpose is straightforward: Defendants have met with and told Prime that if it does not turn over the non-union healthcare workers at its hospitals on terms dictated by Defendants, they will destroy Prime and ruin the lives of its executives," the plaintiff continues.
"To make good on their threats, Defendants have embarked on a campaign of extortionate assaults on virtually every aspect of Prime's business. Through their attacks, Defendants seek to decimate Prime's relationships with its patients, business partners, and future business partners and destroy the very core of Prime's business, offering to stop these activities only and until Prime 'surrenders' to Defendants' forced unionization demands," the company says.
"All the while, Defendants have enriched, and seek to further enrich, themselves at the expense of Prime by obtaining Prime's property," Prime concludes. "Defendants' conduct is textbook extortion."
Among the specific act Prime accuses the defendants of engaging in are attempting to thwart the company's acquisition of additional hospitals, attacking Prime's investment partners with false and disparaging public accusations of wrongdoing, producing misleading reports solely for the purpose of damaging Prime's reputation, filing baseless complaints against Prime with regulators, and even coercing and threatening Prime's patients.
Prime seeks treble general damages on multiple violations of the Racketeering Influenced and Corrupt Organizations Act.
The hospital management firm is represented by Kathleen S. Kizer, Victoria Bruno and Edward Scheiderman of DLA Piper LLP (US) in Washington, D.C.