Teamsters Did Not Extort Illinois School Bus Firm

CHICAGO (CN) - Teamsters Local No. 777 did not extort a non-unionized school bus company when it made allegations that the company underpaid its employees and poorly maintained its school bus fleet, a federal judge ruled.

Cook-Illinois Corporation owns four school-bus companies - Alpha School Bus Co., Richlee Vans, Illinois School Bus and Grand Prairie Transit - that contract with school districts in the Northern District of Illinois to provide busing services. Several of these contracts require that the school buses meet certain safety specifications and that the companies pay their drivers a certain minimum wage.

For the last five years, the Teamsters Local No. 777 has attempted to unionize Cook-Illinois' bus drivers. While it has gained recognition from employees at other school bus companies, it has been unsuccessful at Cook-Illinois.

In October 2011, the president of Local 777, James Glimco, sent a letter to Alpha's employees, allegedly falsely stating that Alpha shorted their paychecks and assigned drivers to unsafe school buses. Local 777 released a press release the same day stating that Richlee Vans "has collectively robbed its Aurora workers of $719,000 it was required to pay under its contract," and "forced [workers] to drive dilapidated buses."

Glimco met with the Superintendent of District 218, John Byrne, and allegedly told him that Alpha and Illinois School Bus school buses were unsafe and that the companies were double-billing the district.

In November 2011, the union distributed a newsletter to Cook-Illinois employees making similar allegations about the company's unsafe buses and underpayment of wages.

In its complaint, Cook-Illinois asserted four claims under the RICO act, accusing the union and Glimco of "conspir[ing] to commit extortionate activities against plaintiffs in the guise of a labor organizing campaign."

However, U.S. District Judge Amy St. Eve dismissed the company's case, finding that Local 777 did not engage in any extortion, or, therefore, any racketeering.

"Plaintiffs have failed to allege an affirmative act of inducement. Plaintiffs rely on a single paragraph of their complaint, in which they allege that defendants sent letters containing false statements about plaintiff Alpha directly to Alpha's employees in an attempt to 'undermine Alpha's business and unsettle Alpha's employees,'" St. Eve said.

"According to plaintiffs' own argument, defendants' conduct was directed at plaintiffs' employees, not plaintiffs, in an attempt to persuade the employees to organize and elect defendant Teamsters as its collective bargaining representative. In short, plaintiffs have not alleged that defendants committed any act of inducement aimed at causing plaintiffs to consent to giving up a property right," the judge continued.

Furthermore, St. Eve agreed with the union that "even if defendants were successful in their endeavor of organizing plaintiffs' employees into a union through a pattern of extortion, it would not result in defendants acquiring or maintaining an interest or control of plaintiffs' companies."

She said that "while it is true that union activity can, in certain circumstances, constitute extortion," the plaintiffs have not alleged any facts of this kind.

St. Eve granted Cook-Illinois leave file an amended complaint by May 25, 2012.

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