Texas SEIU Files For Bankruptcy

Matt Vespa
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Posted: Dec 11, 2016 1:30 PM
Texas SEIU Files For Bankruptcy

The Service Employees International Union’s Texas chapter has filed for bankruptcy. Professional Janitorial Service of Houston had slapped the SEIU chapter with a multi-million dollar lawsuit for making false remarks about the company. The lawsuit cost SEIU Texas almost $8 million in punitive damages. The lawsuit was originally filed in 2007. Bill McMorris of The Washington Free Beacon had more:

A jury ordered Service Employees International Union Texas, also known as SEIU District Five, to pay Professional Janitorial Service of Houston $7.8 million in September for making false claims about the company during a campaign to rally support from workers and local activists.

A Texas judge rejected the union’s request for a mistrial on November 15 and ordered it to hand over files associated with the case to the company for discovery.

The union said that filing for Chapter 11 bankruptcy protection reflects the best interests of its members given the costly judgment.

“This filing ensures that our union will remain open for business, representing members at the bargaining table and maintaining the vital role the union plays in helping working Houstonians have a voice at work, protecting them from unfair employers, and building a better future for their families,” SEIU Texas President Elsa Caballero said in a statement. “Bankruptcy is a common process provided under the law to protect organizations—such as corporations, non-profits, unions etc.—and allows us to seek temporary relief from our debt while we continue to pursue our appeal of an unfair judgment.”

Brent Southwell, the CEO of the janitorial company, said it plans to continue seeking information from the union to ensure that it is not hiding money to dodge the jury award. He said the company could pursue action against the union’s national office, which has more than 1.5 million members, if the Texas branch is not able to pay the judgment.

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The janitorial company filed its initial suit in 2007 and was awarded over $5.3 million in damages by a jury. On September 26, a district judge ordered the union to hand over an additional $2.5 million for interest accrued during the lengthy legal proceedings. The company said in a release that a bankruptcy declaration does not allow the union to duck the jury’s decision about the cost of its actions.

Of course, the SEIU are staunch supporters of the Democratic Party—and endorsed Hillary Clinton for president. Nevertheless, the fact that one is in dire financial straits is more of a trade off in the battle for right to work since they won a ballot initiative that will inhibit efforts to inform home-care workers of their rights to refuse union dues. In 2014, the Supreme Court ruled in Harris v. Quinn that home-care workers had the right to refuse paying union dues if they didn’t want to join one based on First Amendment provisions. The Washington state-based conservative think tank Freedom Foundation tried to inform union members who work in home-care of their rights via Quinn. So, the SEIU, to protect their war chest funded by such dues, decided to push a ballot initiative that would’ve blocked disclosure of certain information, like lists of workers. The Freedom Foundation had asked the state for a list of workers that would be impacted by the Supreme Court ruling, which I guess made the SEIU nervous (via WSJ):

The Department of Early Learning, which regulates child care, handed over its list. The state Department of Social and Health Services, which regulates home health-care workers, refused and, according to emails obtained by the Freedom Foundation, also encouraged the SEIU to sue the department to delay the process of turning over the information.

The SEIU sued the agency and the Freedom Foundation, and the foundation won in two state courts. In late September the state Supreme Court declined to hear the case, forcing the health agency to provide the names under the state Public Records Act. Now the unions are trying to accomplish through the initiative what they were unable to do through the courts, blocking access for anyone who would inform union members of their rights.

Under the ballot measure, the Freedom Foundation or other outsiders would be blocked from obtaining the list of union members’ names. The unions know that when workers know they have a right not to pay union dues, they often don’t.

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By the way, the section of the initiative to protect seniors from identity theft is superfluous under state law. The state Public Records Act already protects sensitive and personal information. No grandmothers will be harmed if the SEIU’s initiative loses, but thousands of workers will pay more if it passes.

In the end, the ballot measure passed by a 70/30 margin last month.