SEIU Texas Denied Bid for Retrial in Smear Campaign Suit

Judge ordered union to pay company $7.8 million

November 15, 2016

The Texas arm of the Service Employees International Union will have to pay nearly $8 million to a janitorial company in connection with a multi-year smear campaign after a district court judge dismissed its bid for a retrial.

In September, a jury ordered SEIU Local 5 to pay more than $5 million to Professional Janitorial Service of Houston, Inc. The jury found that Local 5, which was formed by organizers from Chicago’s SEIU Local 1, falsely told federal regulators and the community that the Houston-based company engaged in unfair labor practices. The union filed 19 accusations of labor law violations with federal regulators, but the company was cleared on all counts or had the charges dropped. The janitorial company filed suit after the union published those charges on pamphlets and other materials circulated in the community.

"The SEIU came to Houston to intimidate PJS and extort payments from our employees—neither of which will ever succeed," PJS president Floyd Mahaney said in a release. "PJS will now make them pay for their lies to our customers."

SEIU said in a release that it would appeal the judge and jury's ruling, saying that such measures would have a "chilling effect" on workers seeking to unionize. The union also said that it would suffer "substantial economic harm" if it was forced to post a bond in excess of $100,000 to appeal the award.

"We will argue that the judgment against Local 5 must be overturned because, among other things, it violates the free speech rights of workers and their advocates throughout Texas," the union said in a release. "While this lawsuit slowly works its way through the courts, we will continue to form unions in Houston workplaces and we will continue work to improve the lives of all low-wage workers in Houston."

The company launched the suit in 2007 after a three-year pressure campaign from the union and was awarded over $5.3 million in damages by the court. On September 26, Harris County District Court Judge Erin Elizabeth Lunceford ordered the union to pay an additional $2.5 million for the interest accrued over nearly a decade of legal proceedings, bringing the total judgment to $7.8 million.

SEIU has tried to avoid the hefty judgment by claiming it does not have the money to pay for an appeal. The union has more than 2,400 members, each of whom pay 1.75 percent of their annual salary in dues. It had assets of about $1.3 million in 2015, according to its most recent federal labor disclosures. It collected more than $4.6 million in revenue while spending $3.9 million, including more than $1 million on overhead, administrative costs, and political activities.

Judge Lunceford approved the company's request for 10 years of the union's financial records to determine its ability to pay for an appeal or the judgment. PJS founder and CEO Brent Southwell said that he looks forward to reviewing those records.

"Since the SEIU claims it has insufficient funds to pay for the damage it caused my company, I look forward to combing through its finances to find every hidden dollar," Southwell said in a release. "You cannot pay 10 lawyers to try to stop me from beating you in a courtroom and then claim you have no money."

UPDATE Nov. 15, 1:29 P.M.: This post has been updated to include SEIU's response.

Published under: SEIU , Unions