Sued for Thuggish ActsOn Mar 23, 2015 Latest updates
SEIU is being sued for interfering in the process of selling a floundering chain of California hospitals. The union is accused of conspiracy and extortion, the San Francisco Business Times reports:
At least two serious bidders, Alecto Healthcare Services and Strategic Global Management, were “dissuaded” by SEIU from pursuing a deal, the lawsuit alleges.
The alleged interference cost the Los Altos Hills-based system “tens of millions of dollars in continuing operational loses and professional fees,” the lawsuit said. Also, it could possibly kill the $843 million deal that paves the way for Prime to acquire the six hospitals, invest $150 million in capital to upgrade them, and assume hundreds of millions of dollars in pension obligations, the lawsuit says…
“The complaint filed Monday chronicles the persistent and unlawful efforts of SEIU-UHW and Blue Wolf Capital Partners throughout the sale process to improperly interfere with the sale,” officials said Wednesday afternoon, in a written statement to the Business Times. “The extortionate tactics employed by the defendants have caused real and substantial harm to DCHS and (it) intends to vigorously prosecute its claims.”…
The 21-page legal filing argues that SEIU and Blue Wolf conspired together to scare away other potential bidders, with the goal of enhancing Blue Wolf’s chances of acquiring the facilities with a low-ball bid that would have allowed it to retain plenty of up-side reward without taking on much down-side risk.
Whether the SEIU-Blue Wolf partnership won the bidding war or not, the Daughters’ lawsuit contends, the alleged extortion effort by the union and the private equity firm put the hospital system’s workers, creditors and bond holders in extreme jeopardy. It says SEIU was motivated by a desire to force Prime to agree to a “neutrality agreement” at other Prime hospitals in California that would make them far easier to organize.
“Despite Blue Wolf’s plan to implement cuts aimed at workers, the SEIU defendants threw their support behind Blue Wolf out of calculated self-interest,” the suit alleges. “While the Blue Wolf plan is bad for current and former workers of DCHS — who largely support the sale to Prime — the Blue Wolf plan enriches the SEIU Defendants and positions (them) to increase their membership and revenues.”
The lawsuit alleged that Dave Regan, president of United Healthcare Workers West, told Prime’s chief executive in July that Harris would not approve the sale unless Prime agreed to remain neutral, rather than opposing SEIU representation, in union elections at its other hospitals in California.
The threat was an attempt to hold Daughters of Charity “hostage” to the union’s demands on other hospitals and amounted to a “criminal act of extortion,” the lawsuit said. It did not explain how Regan supposedly knew Harris would set those terms on her approval of the sale, and her order last week did not require neutrality in union elections.