Kaiser Faces Trial in Union-Linked Rivalry

SAN FRANCISCO (CN) - A fledgling union's claim that Kaiser Permanente paid members of a rival union to work on union elections in violation of labor law will move to trial, a federal judge ruled.

The dispute arose in 2009 after officers from the Service Employees International Union-United Healthcare Workers clashed over union governance and broke away to form the National Union of Healthcare Workers. These two unions compete over the representation of approximately 45,000 Kaiser workers in California.

After the National Labor Relations Board ordered an election and Kaiser allegedly favored SEIU-UHW by paying salaries and benefits to union reps for time spent campaigning, the newly formed union sued the hospital giant in 2010.

SEIU won the election, as well as a second election in April 2013 after a 2011 reversal from the board .

U.S. District Judge William Alsup gutted most of NUHW's action against Kaiser last year, finding that the hospital's collective bargaining agreement with SEIU mandated paying the salaries and benefits of top-tier union reps for attending to union business. But he allowed NUHW a second chance to claim that the agreement did not include "lost-timers," Kaiser employees who request up to one year of leave from the hospital to go to work as union staffers.

Kaiser called for summary judgment on the lost-timer issue, claiming that paying benefits and accrued leave - but not salaries - to those employees did not violate the Labor Management Relations Act. Alsup disagreed Friday.

"No circuit decision has examined the issue presented," Alsup wrote. "All of the precedents cited involved a dispute between an employer and a union. By contrast, here we have a scenario in which the employer has given aid and comfort to one union with whom it is friendly in its fight to stave off a second, rival union from seeking to represent the workers - or so a reasonable trier of fact could find on this record."

He noted that, while the 9th Circuit's decision in Machinists Lodge 964 v. BF Goodrich Aerospace in 2004 validated collective bargaining provisions that require employers to continue paying top union officials their salaries and benefits for doing primarily union work, that case did not touch the lost-timer issue. And it certainly didn't cover Kaiser's alleged release of "an army of lost-timers to campaign for SEIU-UHW" during the two elections as NUHW claims, according to the ruling.

"Unlike the chief shop steward in Goodrich, the actual services provided by these lost-timers cannot be construed as providing a legitimate benefit to the employer," Alsup wrote. "The lost-timers worked completely under SEIU-UHW's direction and provided no legitimate service to Kaiser. In fact, the only logical benefit to Kaiser in flooding the campaign with lost-timers working for SEIU-UHW would be the defeat of NUHW, a union that Kaiser allegedly feared and disfavored.

"A reasonable trier of fact could find that Kaiser wanted to keep the old, soft union with whom it could 'do business' and defeat the new, tough union that planned to protect the workers more aggressively," he continued. "Domination or interference with the formation or administration of a union is precisely one of the evils the Labor Management Relations Act was designed to prevent."

For its part, Kaiser argued that no violation of the law occurred because SEIU agreed to reimburse what it paid out to lost-timers, an arrangement provisionally upheld in 2012's California Nurses Association v. Good Samaritan Hospital. In that case, however, the parties had a reimbursement clause in their collective bargaining agreement - and Kaiser and SEIU don't, Alsup pointed out.

Kaiser also failed to persuade Alsup that it played by the rules because it paid lost-timers from both unions.

"While NUHW clearly had many fewer lost-timers on its side during the election, the law's restrictions must, of course, apply with equal force to both unions," Alsup wrote. "Should unclean hands apply? It is not so clear. Congress wanted to end corruption in the form of companies making payoffs to unions. Can a company escape this prohibition by making payments to both competing unions? To allow this loophole would undermine the goal of Congress. By analogy, it would be like excusing violations of campaign contribution limits because the contributor gave to both sides. On the other hand, inequitable conduct on the part of NUHW may arguably undermine its claim for relief. Without the benefit of a full trial, however, the record is not complete enough to make such a determination. Accordingly, the issue of Kaiser's unclean hands will not be settled by summary motion."

The trial begins March 31.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit