A California Court of Appeals struck down a $17 million dollar defamation judgment in favor of Sutter Health against a union, Unite Here, which was engaged in a labor dispute with a nationwide laundry company, Angelica Textile Services, Inc. Unite Here engaged in a type of secondary picketing, attempting to apply pressure on Sutter Health to pressure Angelica to submit to union demands. Unite Here directed its fire on the lucrative birthing services of the Sutter Hospitals. It developed what was identified as the Sutter Escalation Plan,” mailing postcards to prospective clients of the Sutter birthing centers or “wealthier women between 25 and 40 who are registered to vote.” The postcards warned that the laundry service (Angelica) used by Sutter did not ensure its lines were free from harmful pathogens and urged potential Sutter Health patients to protect their newborns because Sutter may not be taking adequate precautions against potential infections. One side of the postcard stated: “EXPECTING? You may be bringing home more than your baby if you deliver at a Sutter birthing center.”
Angelica, which eventually signed a labor agreement with Unite Here, apparently had some OSHA violations elsewhere concerning its methods of which the union was aware and stressed in its organizing activities. The union tried to introduce the fact of the existence of hospital nosocomial infections into evidence, but was unable to do so because it could not establish that any hospital infections were related to infected linens. The Court, in Sutter Health et al, v. Unite Here, CO5440, (CA APP., 3rd App. Dist., July 21, 2010), reversed the jury’s finding of liability and damages award based upon the failure of the trial court to given the appropriate federal “actual malice” instruction of liability.
The judge instructed the jury under California state law standards that the union could be held liable if it failed to use reasonable care to determine the truth or falsity of the publication. Federal constitutional law requires the same level of protection for participants in a labor dispute that the first amendment provides to newspapers under the First Amendment to the U.S. Constitution. It requires the New York Times v. Sullivan, “actual malice” standard which requires a plaintiff to prove that a false defamatory statement was published with knowing falsity or reckless disregard of the truth or falsity. Linn v. United Plant Guard Workers, 383 U.S. 53, (1966) (there must be accommodation of the federal interest in the uniform regulation of labor relations with the traditional concern and responsibility of the State to protect its citizens against defamatory attacks”).
Although Sutter, itself was not directly involved in the labor dispute, it fell within the penumbra of the federal interest in robust discussion in a labor context and the court found that as long as the union acts for some job-related reason in order to exert economic pressure, the conflict constitutes a labor dispute. The court, however, rejected the union’s call to dismiss the case, opting to return the conflict to the trial court for a rehearing.
“Based on the evidence, a jury could conclude that UNITE HERE’s knowledge of Angelica’s laundry facilities’ problems in other parts of the country and the union’s extrapolation to what this meant concerning Supper Health’s sanitary precautions, was an unjustified fabrication based on purposeful avoidance of the truth, rather than on a mere negligent and inadequate investigation.”
More to come with this messy business.
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