SEIU and SEIU–UHW Achieve Victory in the Northern District of California
In two related proceedings in the U.S. District Court for the Northern District of California, one tried to a federal jury and one tried to the Court, the Service Employees International Union (SEIU) and one of SEIU’s largest local unions, SEIU – United Healthcare Workers West (SEIU-UHW), were able to obtain favorable judgments with the help of attorneys from Bredhoff & Kaiser.
The case tried to the jury was brought by SEIU and SEIU-UHW against a group of former leaders of the local and a rival union that they took steps to form while still serving as officers of the local. The jury entered a verdict awarding SEIU-UHW more than $1.5 million in damages after a three-week trial. The jury found that the former leaders had breached their fiduciary duties to SEIU-UHW by taking actions while they still were officers of the local to divert the local’s funds and resources to accomplish objectives contrary to the interests of the local and its members. Among those actions were using the local’s resources to form a rival union that would attempt to raid the local of its members; using the local’s resources to set in motion a series of actions that would render the local “ungovernable” and undermine the local’s ability to represent its members in the event that SEIU imposed a lawful trusteeship over the local; and physically intimidating persons who were preparing to manage the affairs of the local in the event of a trusteeship. The jury found as well that the rival union aided and abetted, or knowingly benefited from, the former officers’ mishandling of the local’s funds and resources. The court entered a permanent injunction against the defendants, which found that that they had improperly taken SEIU-UHW’s property and which required them to return all such property and to cease further use of such property.
The case tried to the Court resulted in a finding that five former leaders of the local had improperly entrenched themselves in office as trustees of a $20 million joint labor-management training fund that SEIU-UHW had created for the benefit of its members. The Court found that the former leaders had secretly amended the rules regarding governance of the fund in order to insulate themselves from removal from their positions on the board of the fund in the event that they were removed from their local union offices for misconduct or otherwise. The Court issued a detailed opinion, concluding that the defendants’ actions had been “drenched in self-dealing” and holding that the amendment by which the defendants accomplished their plans “violated the basic principles of the trust” and was therefore null and void.
Bredhoff & Kaiser attorneys represented SEIU and SEIU-UHW, and its members in these proceedings.