Nursing home company files RICO suit against striking union

    An interrelated group of nursing home companies filed suit Wednesday against the union striking at five Connecticut locations, alleging extortion under a federal law designed to fight the mob.

    HealthBridge, owner of eight nursing homes in Connecticut including three nonunion locations, and a related company, Care One, filed suit against the New England Health Care Employers Union, also known as Service Employees International Union 1199NE, and United Healthcare Workers East, another SEIU affiliate.

    The suit claims the unions violated the Racketeer Influenced and Corrupt Organizations Act by using threats, sabotage and intimidation to coerce the companies to accept union demands.

    The plaintiffs allege the unions will not halt their tactics until the companies agree to allow organization of the non-union nursing homes in Connecticut, Massachusetts and New Jersey.

    According to the complaint, the unions want to unionize these employees without allowing them to vote by secret ballot.

    Rosemary Alito, a lawyer with K&L Gates in Newark and sister of U.S. Supreme Court Judge Samuel Alito Jr., filed the lawsuit in the U.S. District Court for New Jersey.

    According to the filing, SEIU’s effort is “a corporate campaign, endorsed and effectuated by defendants and facilitated by the politicians they support, that is in its essence a shake-down by a lawless enterprise.”

    HealthBridge revealed in the complaint that the U.S. Attorney’s Office for Connecticut is investigating its home in Southbury, River Glen Health Care Center, based on union allegations the company overbills Medicare.

    Several Connecticut politicians, including Gov. Dannel Malloy and Attorney General George Jepsen, walked the picket line with striking 1199NE employees over the summer.

    According to the complaint, a member of Malloy’s staff attempted to orchestrate the sale of HealthBridge’s Connecticut nursing homes by asking the company to contact an attorney representing a prospective buyer.

    Malloy’s office did not immediately respond to a request for comment.

    After walking the picket line, Jepsen recused himself from directly handling issues related to the company.

    HealthBridge and Care One claim the unions are putting illegal pressure on them in order to obtain additional members and contributions to shore up their underfunded pension plans.
    HealthBridge RICO Complaint Against SEIU 1199NE

    “As caregivers and citizens of the Connecticut community, the members of our union are dismayed but hardly surprised by this latest attack by HealthBridge and CareOne on its employees,” said David Pickus, president of SEIU 1199NE. “With no justification for putting profits ahead of patients, this latest desperate action makes it clear that these corporations will do anything to divert attention away from their unlawful behavior aimed at avoiding a fair agreement with workers.”

    “The announcement of HealthBridge’s lawsuit against its own employees is just the latest in a series of aggressive actions by the company that has no basis in either fact or law,” Pickus said. “The company once again is employing its seemingly unlimited resources, not to provide quality care or settle a reasonable contract, but to point fingers everywhere but at their own proven illegal behavior.”

    The complaint reiterated earlier claims by HealthBridge that union members committed sabotage in the hours leading up their strike, potentially putting lives at risk.

    “We want to be clear that the actions that have been alleged at three of the HealthBridge nursing home facilities are inappropriate and contrary to our mission as caregivers and as a union,” Pickus said. “We condemn in the strongest terms any actions that could jeopardize care for nursing home residents. That includes the subpar care that family members of residents have said has been provided in some cases by replacement workers.”

    According to the companies, SEIU’s campaign is unlike normal labor-management conflict or legal strikes.

    “In a traditional union organizing campaign, the union seeks to convince employees that unionization is in their best interests,” the complaint says. “Through a corporate campaign, union organizing and contract negotiations go from being fair processes with uncertain outcomes to being old-fashioned, mafia-style shakedowns in which the employer has no choice but to surrender its money to the unions in return for a temporary end to the extortionate campaign.”

    The complaint cites an SEIU manual, made public in a previous RICO suit against SEIU that was settled out of court, telling union organizers it is not always necessary to follow laws.

    “At the same time, keep in mind that the laws are written primarily to protect employers, and that our union might never have been established in the first place if our founders had not used tactics which violated those laws,” the manual says. “The job of lawyers is not to make the decisions about when and how to obey the laws.”

    According to the complaint, UHWE in Massachusetts obstructed improvements to HealthBridge nursing homes in that state, but would drop its regulatory intervention if the company agreed to SEIU’s demands.

    SEIU and allied groups also intimidated Daniel Straus, owner of HealthBridge and Care One, in multiple ways.

    In particular, the unions targeted New York University, where Straus is a trustee and the donor who endowed its Straus Institute for the Advanced Study of Law & Justice. Union materials relabeled it the “Straus Institute for Worker Injustice.”

    SEIU also organized a protest and lobbying efforts against a New York City condominium project part-owned by Straus, calling it a “disruptive, tasteless monstrosity.”

    The plaintiffs claim Malloy was “the beneficiary of $400,000 in campaign expenditures by the SEIU and an affiliated local union for his 2010 election campaign.”

    According to the plaintiffs, Malloy delayed a decision on HealthBridge’s proposal to close one of its homes and required information not submitted by previous applicants.

    “Ultimately, on June 11, 2012, the state Department of Social Services approved the closure of Wethersfield Health Care Center,” the complaint says. “However, the unions’ interference with the closure process resulted in a delay of approximately six months, and cost Wethersfield [Health Care Center] in excess of $6 million.”

    HealthBridge also said “defendants were able to persuade Connecticut Gov. Dannell Malloy and the Connecticut Attorney General’s office to threaten to take the assets of the Connecticut facilities managed by plaintiff HealthBridge under receivership.”

    According to the filing, HealthBridge “indirectly received an unsolicited message from Gov. Malloy’s office to contact a prospective purchaser’s counsel for the sale of the Connecticut plaintiffs’ facilities.”

    “The cycle of extortion will continue indefinitely,” the complaint says, as more nursing homes are unionized and new contracts are negotiated.

    “The effects of Defendants’ extortionate conduct are severe,” the complaint says. “In already difficult economic times, particularly in the elder care industry, the most likely results of extended extortionate campaigns are poor patient care, unprofitable facilities that may be forced to close, layoffs of union and non-union employees, and monetary losses for the owners of the plaintiffs.”

    “Instead of pursuing a frivolous lawsuit, we implore those corporations to invest that same energy toward achieving a solution with workers at the bargaining table,” Pickus said. “We believe that would ultimately be a more effective and socially just use of the company’s significant resources.”