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Tuesday, February 21, 2017

Jack Getman on "The Continuing Mischief of the Linn Case"

[The following is a guest post from my UT colleague Julius Getman, who, among many other things, is the author of the recent book, The Supreme Court on Unions.]

In September of last year, a Texas jury, on the basis of erroneous instructions from the judge, ordered an SEIU local union of janitorial workers to pay $5.3 million in damages to a cleaning company called Professional Janitorial Services (“PJS”). This union-destroying order was based on statements made years ago as part of the Houston Justice for Janitors campaign, a campaign that succeeded, against enormous odds, in winning contracts for building cleaners in a notably hostile jurisdiction.

The implications of the verdict are devastating. Local unions of low-wage employees cannot pay multi-million dollar jury verdicts and continue to function (as evidenced by the recent bankruptcy filing of the union defendant in the PJS case), If permitted to stand the Houston verdict will inevitably have a chilling effect on labor speech during organizing campaigns. And unions must be able to organize effectively’ during these trying times, if the labor movement is to survive.

Defamation verdicts in state courts like that against the Houston janitors call for a long-overdue reexamination of the Supreme Court’s unfortunate decision in Linn v. Plant Guard Workers, 383 US 53 (1966). The Court in Linn upheld by a five to four vote the exercise of state jurisdiction in a libel suit arising from a union organizing drive. Justice Clark, who wrote the majority opinion, insisted that such jurisdiction would not pose a threat to a union’s right of speech so long as state jurisdiction was “limited to redressing libel issued with knowledge of its falsity, or with reckless disregard of whether it was true of false.” Although he recognized the importance of a broad right of speech generally in labor disputes, Justice Clark concluded that where malice was found ‘the exercise of state jurisdiction … would be a ‘merely peripheral concern of the Labor Management Relations Act.’”

Four justices dissented. They pointed out that the Courts standard was vague and could easily be interpreted to cover actions intended to be protected by the National Labor Relations Act by simply pleading that the offending statements were made with malice. And they predicted accurately that the majority opinion ‘both underestimates the damage libel suits may inflict on the equilibrium, and overestimates the effectiveness of the restraint which will result from superimposed requirements of malice and special damages.’

The recent PJS verdict illustrates the wisdom of the dissenting justices and the danger to unions implicit in state court defamation suits arising from union organizing efforts. The statements (circulated in fliers and other campaign materials were directed at the legal rights of workers . They described allegations of actual PJS employees in a then-pending Fair Labor Standards Act case and in unfair labor practice proceedings before the National Labor Relations Board. The ultimate goal of the union’s statements and actions was not to inflict economic harm on PJS but to establish a collective bargaining relationship with it – a goal promoted by Section 2 of the NLRA. Far from being evidence of malice were the very sort of speech protected by the US Constitution and Section 7 of the NLRA. The trial judge failed to analyze the contested speech in terms of the language or policy of either the NLRA or the US Constitution and instead encouraged the jury to find defamation on the basis of irrelevant material. For example:

  • The trial court allowed the company’s lawyers (over union objection) to rest the bulk of their case on two completely irrelevant and prejudicial pieces of evidence that should never have been admitted—an outdated SEIU “campaign manual” that was not in effect during the Houston campaign and that no one involved in the Houston campaign had ever seen, and an unrelated lawsuit by a different employer in a different jurisdiction alleging different claims against SEIU arising out of a different campaign that had not even begun as of 2006.
  • The trial court presented the jury not the actual union flyers and statements at issue in the case but, instead, abbreviated and inaccurate summaries of those materials written by the court itself. Thus, an accurate union statements that “A new lawsuit filed on behalf of current and former employees of [PJS] charges that the company engaged in unlawful business practices and violated federal law” was reformulated in the judge’s question to the jury “Did the SEIU Local 5 disparage the business of PJS by publishing that PJS systematically failed to pay its employees for all hours worked?”

Similar errors abound. It is difficult to imagine a verdict that more blatantly overrides basic employee rights and traditional Constitutional policies. The wisdom of the dissenting Linn Justices was once more illustrated. It is time to either overrule the Linn decision or to provide for more careful regulation of state court defamation in cases arising from union organizing campaigns.

Fortunately, the union has indicated it will appeal and raise many of the issues identified above. One hopes that an appellate court will stand up for free speech and the long recognized and well-established rights of workers.

Posted by Steve Vladeck on February 21, 2017 at 06:36 PM | Permalink

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