In recent years – and as chronicled on this blog – businesses and prosecutors have slowly chipped away at the belligerent tactics Philadelphia labor unions have for years employed to achieve their objective of monopolizing work for their members (and ultimately enriching fat cat union bosses). The first blow came when an apartment developer dared build a project in Philadelphia utilizing a non-union workforce. In its wake, many developers, who for years refused to build in the City of Philadelphia because of Philadelphia’s building trade unions, are now constructing projects throughout the City using a non-union workforce.
The second blow came when the United States Department of Justice indicted 10 members of Philadelphia Ironworkers’ Union, which ultimately led to 9 guilty pleas and jury verdict finding the head of the Ironworker, Joseph Daugherty, guilty of charges of extortion and other charges. The Ironworkers that have been sentenced have received federal prison terms of 2-8 years.
The third blow came when the Pennsylvania Convention Center signed an agreement with electrical, laborers’, and riggers’ unions, which the Philadelphia Carpenters’ Union refused to sign. The Convention stood their ground and refused to allow the Carpenters’ Union to work in the Convention Center after the deadline for signing the agreement passed.
Now, the Convention Center has stricken a potential death blow to union tactics, as we known them, in Philadelphia by filing a civil RICO complaint against the Carpenters’ Union and its Executives, including head of the Philadelphia Building Trades, Edward Coryell, Sr. A copy of the complaint – which is must read – is available here (COMPLAINT.) (For good reason, civil RICO has been described a thermonuclear device of civil litigation.)
In previous posts, I predicted that the Ironworkers’ conviction would pave the way for civil RICO actions like the one filed by the convention center because labor union no longer enjoyed protection from Hobbs Act violations. The Hobbs Act makes it a federal crime to conspire to commit extortion. Past civil RICO complaints against labor unions have typically failed because the plaintiff was unable to demonstrates a predicate under the RICO statute. Violating the Hobbs Act is a predicate act. Indeed, the predicate act that the Convention Center relies upon to support its RICO claim against the Carpenters’ Union is the Hobbs Act.
Previously, labor unions successfully had civil RICO actions dismissed early in the litigation because for many years labor union enjoyed immunity from Hobbs Act violations so long as they were furthering “legitimate union objectives.” However, courts have slowly eroded that long standing protection and many commentators, including myself, believe it no longer exists. Now, that theory will be put to the test with the Convention Center’s complaint. The Carpenters’ Union will certainly file a motion to dismiss arguing that their actions were furthering legitimate union objectives and, therefore, are not violations of the Hobbs Act. How the federal court decides that motion will shape labor relations in the City of Philadelphia and perhaps across the nation for years to come.
If the Court, which I predict, denies the motion, then anyone subject to the same tactics the Carpenters’ Union can safely file a civil RICO complaint against labor unions and be fairly certain that the case will reach the trial stage. (To the uninitiated, the actions of the Carpenter’s Union as described in the complaint probably appear salacious, however, to anyone that performs construction work in Philadelphia they are actually quite de rigueur.) With a viable civil RICO claim, the only option for those suffering from outrageous union tactics will no longer be going to the National Labor Relations Board (a friend of organized labor to begin with) hat in hand to ask for a toothless unfair labor complaint. If the Court grants the motion and dismisses the Convention Center’s complaint, then labor unions will only have to fear the RICO act when it is used by federal prosecutors and it will be business as usual for Big Labor.
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
