Yesterday’s guilty verdict is the trial of former Ironworkers’ Union President, Joe Dougherty, is a monumental decision with far reaching ramifications. First, there is no longer any question that union bosses enjoy no immunity from federal racketeering and extortion laws. Second, the decision clears the way for contractors to employ what has been called the “thermonuclear device” of litigation, civil RICO, against trade unions.
1. Enmons is Dead.
Thanks to a 1973 U.S. Supreme Court case, U.S. v. Enmons, for over 40 years union bosses and their minions enjoyed de facto immunity from federal criminal charges for actions that would otherwise be criminal so long as they were in furtherance of a “legitimate union objectives.” Until recently, courts had been loath to reel in the breadth of Enmons. That changed in 2011 in a decision from the federal court in New York in the case U.S. v. Larson, where the court refused to dismiss an indictment of members of the Operating Engineers Union, who engaged in activity similar to that in the Ironworkers case. In that case, the court distinguished Enmons and said that decision was never meant to apply to acts of violence and extortion against non-union construction companies and project owners, who chose to build non-union. That decision paved the way for a series of guilty pleas from members of Operators in the case. In the Ironworkers’ case, Judge Baylson reached a similar conclusion and it paved the way for the conviction of Joe Dougherty.
Thus, there is now no question that acts of violence and extortion are no longer protected under U.S. v. Enmons and unions can no longer hide behind that decision in escaping prosecution for their crimes. Last year, it was reported that the U.S. Attorney in Philadelphia was making cases, like the Ironworkers case, a priority. Moreover, at the news conference initially announcing the indictment over a year ago, the U.S. Attorney was explicit that the case may not stop with the Ironworkers’ Union. Indeed, as any non-union contractor working in Philadelphia knows, the allegations against the Ironworkers’ Union were hardly unique to that specific union. There is no doubt that Ironworkers’ case was a test case for the Department of Justice here in Philadelphia and we should not be surprised if similar indictments are unsealed against other members of the building trades.
I am sure there is a bit of Hoya paranoia happening in the Philadelphia building trades right now, but that paranoia may soon spread nationally because U.S. Attorneys’ like to bring “copy cat” cases in other jurisdictions.
2. Civil RICO Claims.
What is perhaps the bigger ramification of the Ironworkers’ conviction is contractors are now “cleared hot” to bring civil RICO claims against trade unions. Joe Dougherty was prosecuted under the Racketeer Influenced and Corrupt Organizations Act, otherwise known as RICO. RICO is a Nixon era body of laws that was passed with the intention of fighting the mafia and other organized crime syndicates. The RICO act has both a criminal and civil component. The civil component requires a plaintiff to prove most of the same elements of a criminal RICO claim. The civil component also permits the court to award a plaintiff trebel (triple) damages and attorneys fees.
The reason why contractors did not likely have a viable RICO claim before the Ironworkers’ conviction involves a bit of background on what is required to prove a RICO claim. (RICO is a very complex area of the law. The complexity of RICO is probably why it took the jury in the Ironworkers case a few days to come back with a verdict.) A fundamental element of a RICO claim is that the defendants must have committed a RICO “predicate act” which are set forth in the RICO act. Simply put, if you have no predict act you have no RICO claim. Predict acts include murder, gambling, mail fraud, wire fraud, and money laundering.
The RICO predicate act most likely triggered by union strong arm tactics is the Hobbs Act, which makes it a federal crime to conspire to commit extortion. For example, Joe Dougherty was convicted of violating the Hobbs Act. The problem before the Ironworkers’ conviction was that the Enmons case foreclosed a civil RICO claim against a trade organization because Enmons held that the Hobbs Act was not violated so long as a union was furthering legitimate objectives. However, now that Enmons is dead and a violation of the Hobbs Act does occur when unions commit extortion against non-union contractors and the owners that hire them, the path is cleared for contractors subjected to that extortion to bring a civil RICO claim against the union. Civil RICO claims are expensive to defend and they give aggrieved contractors the first real weapon with teeth to combat union intimidation. I would not be surprised if the contractors that were harmed by the Ironworkers do not file civil RICO claims against the Ironworkers’ Union in the near future.