Hotel Labor & Employment Lawyer Report – Sutter Health Implications Part II

Yesterday, I discussed the record jury verdict against Unite Here in the Sutter Health case where a Superior Court jury in rural Placer County California found Unite Here guilty of “fraud, malice or oppression.” The jury hit the union with a $17.3 million verdict for intentionally and maliciously acting to harm the business of the Sutter Health not-for-profit hospitals and birthing clinics. As usual, I looked to Marta Fernandez, my hotel labor attorney partner, for insight and guidance. Yesterday, she gave us 9 points to think about as to the significance of the case—what it all means. But she save some real gems for today’s short blast. Here they are.

The facts of Sutter Health.
I will not repeat the details here. One telling is enough. See the posting on Sutter Health for all the background, positioning and outcome. It is an awesome tale.

The bottom line – what this all means.
I also tapped Marta for her insights on the significance of the case. In my last posting she had several points about the jury verdict and 9 points as to what this all means. See Sutter Health. If you missed these, they are worth going back to, or you may even want to subscribe to (It’s free).

It is time to turn the tables!
In addition to the points noted earlier, Marta Fernandez tells us that the Sutter Health case is interesting from several perspectives:

First, the union’s actions in attempting to interfere with Sutter’s business because of its real dispute with a third party vendor may be considered “secondary boycott activity” which itself is unlawful under the National Labor Relation Act.

Marta says, "We have seen these pressure tactics used by Unite Here as well as other unions, such as the Carpenters Union when the contractor working on a hotel remodel for example does not use union labor and the union attempts to interfere with the hotel’s business by claiming it has a 'labor dispute' with the hotel when in fact its real gripe is with the contractor."

Where a union engages in secondary boycott activity, the employer may bring unfair labor practice charges against the union before the NLRB. Second, in pursuing a damages remedy in court under a defamation theory (for which they were ultimately very successful), Sutter was taking a real chance that it would not get very far as Courts have traditionally given unions great deference in the exercise of speech rights during labor disputes.

The fact that a Court permitted the case to get to the jury and that a significant damages award was entered against the union signifies that the tables do turn on unions and that there are many ways employers can fight back when a union engages in over the top tactic against an employer.

Bringing civil actions against the union for such torts as trespass, assault and battery, interference with contractual relations, invasion of privacy and, as in this case, defamation can be a very effective weapon in fighting union battles.

Experienced labor management lawyers know that the best way to gain leverage over the union is to turn the tables and make the union defend its actions in several arenas, as appropriate. Sutter Health gives encouragement that unions are not above the law, and is another area in which we can make unions accountable for their often outrageous behavior. See below for Marta’s biographical and contact information.

Marta Fernandez is a senior member of the Global Hospitality Group® and a partner in the Firm's Labor & Employment Group. A management labor lawyer with more than 20 years' experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment, including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB; implementation of preventative management strategies, such as executive training, arbitration enforcement and policies and procedures; defense of administrative and litigation claims, such as employee claims of sexual harassment and discrimination. For more information please contact Marta Fernandez at 310.201.3534 or [email protected].

About the Author: Jim Butler is recognized as one of the top hotel lawyers in the world. He devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group®—a team of 50 seasoned professionals with more than $40 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, they have brought their practical advice to more than 80 “hotel-enhanced mixed-use” projects, a term Jim coined to fill a void in industry lexicon. This term describes one of the hottest developments in real estate-where hotels work together with shopping center, residential, office, retail, spa and sports facility components to mutually enhance the entire project’s excitement and success.

Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. They are a major gateway of hotel finance, facilitating the flow of capital with their legal skill, hospitality industry knowledge and ability to find the right “fit” for all parts of the capital stack. Because they are part of the very fabric of the hotel industry, they are able to help clients identify key business goals, assemble the right team, strategize the approach to optimize value and then get the deal done. Jim is the author of the Hotel Law Blog, . He can be reached at +1 310.201.3526 or [email protected].