Texas Local Union Files Bankruptcy after Defamation Verdict

by San Antonio Attorney

A jury in Texas has awarded a janitorial services company a compensatory damages amounting to $7.8 million after concluding that Service Employees International Union (SEIU) Local 5 caused major damage to the business of the company by means of sham claims involving violations at the workplace.  Consequently, Local 5 has sought for bankruptcy protection.

About ten years ago, Local 5 started the “Justice for Janitors” movement against many janitorial service providers.  But Professional Janitorial Services of Houston Inc. (PJS) resisted.  The union tried everything to coerce the company and its clientele.   The company was charged with 19 labor law violations (which includes overtime and wage violations and dismiss union activity), then issued the allegations as “facts.” Authorities have found the charges to be without merit.  Moreover, Local 5 used its political influence to pressure PJS customers to discontinue doing business with the janitorial services provider.  A testimony exposed that union officials aimed to destroy PJS.

PJS sued Local 5 in 2007 and fought it through the civil litigation.  After nine years, a jury decided in favor of PJS and awarded it around $8 million in damages.

Local 5 filed for bankruptcy, saying it needs protection to continue operating while it works on appealing the court judgment.  PJS insists the union must be required to have a $6.1 million bond prior to moving forward with an appeal.

Local 5’s financial declarations with the U.S. Department of Labor cause uncertainty as to whether the union has the necessary assets to satisfy the judgment.  PJS argues that the parent organization of the local union should provide financial support to their local unit.

It’s challenging to sue a labor union because it is often costly and an unfavorable proposition.  But the case of PJS shows that a dedicated employer can fight a nationally supported corporate campaign.

Leave a Comment

Previous post:

Next post: