Union settles judgment
Agreement with cleaning company lets local SEIU emerge from bankruptcy, but its future is unclear
T HE Service Employees International Union recently reached a confidential agreement with a Houston commercial cleaning company to settle a multimillion-dollar judgment in a deal that will allow its Texas affiliate to emerge from bankruptcy, but raises questions about the future of the local and its ability to organize here.
SEIU Texas filed for bankruptcy after a Harris County jury last year awarded $7.8 million to Professional Janitorial Service, the target of a bitter organizing campaign more than a decade ago that ultimately led to a defamation case and a jury finding that the union maligned the commercial cleaning company’s reputation. The international stepped in earlier this year to settle the case for an undisclosed amount, erasing the local’s liability.
SEIU Texas, which said in court papers that it now has the money to pay its bills, last month asked the federal bankruptcy court in Corpus Christi to dismiss the union’s Chapter 11 filing.
SEIU Texas is expected to get back to business, but it’s unclear what’s next for the statewide union. It has relied on its international parent for at least 80 percent of its annual operating income and it’s uncertain how much of a subsidy it will continue to receive. In the bankruptcy case, the report of union financial expert said the parent organization was under no obligation to support the local, according to court records; the in-
ternational did not say in the report whether it would continue to prop up its Texas affiliate and did not respond to a request for comment.
Meanwhile, the union’s Texas membership has been trending down, according to court records. The union reported 1,700 members during the first nine months of 2016, down by nearly one-third from the previous year, when it had about 2,500. The once-bustling union headquarters that once occupied an entire floor of a bank building on the edge of River Oaks now shares the space with a real estate firm, tutoring company and home builder.
Local union officials declined to comment.
John Jansonius, a Dallas employment lawyer who represents management, said the verdict could help companies dissuade employees from joining the SEIU by pointing to the Professional Janitorial Service case and the jury’s findings against the union. An employer facing an SEIU organizing drive can point to the verdict, Jansonius said, and say to its employees: “Here is what a jury of your peers thought of the organization.”
It’s hard enough to organize in Texas, a so-called right-to-work state, and the verdict might lead workers to question whether the Texas SEIU has the resources to represent them and their dues will be spent to cover legal bills, said Jansonius, who has been watching the dispute over the past few years.
He predicted the SEIU will take a low profile in Texas for a while.
“I would think this takes a lot of wind out of their sails,” he said.
The SEIU set its sights on Houston some 15 years ago as its first toehold in the South to expand its Justice for Janitors campaign. SEIU had racked up impressive wins in its campaign to organize janitors in other parts of the country and funneled millions of dollars into organizing in Houston, a city with an expanding Latino population.
SEIU, flush with money af- ter splitting from the AFL-CIO, spent millions to lease office space and hire organizers in Houston to court the thousands of low-wage janitors who worked for little more than $5 an hour cleaning toilets, vacuuming the carpets and emptying the trash. It scored the biggest labor victory in more than a quarter century in Houston when it announced in 2005 that it obtained a majority of signatures of low-wage janitors who wanted to form a union and be represented by SEIU. The janitors worked for five national cleaning companies, which recognized the union.
But in an effort to sew up the labor market in the commercial cleaning business —a move that would give the union more negotiating clout —SEIU set its sights on Professional Janitorial Service. The relatively small company was the sixth largest commercial cleaner.
The campaign started like many other organizing efforts but turned nastier than usual as the union falsely claimed that the company had violated wage, overtime and other labor laws.
A jury in Harris County state district court awarded Professional Janitorial Service $5.3 million in September. With interest — stretching back to 2007 when the lawsuit was initially filed—the award had grown to $7.8 million.
By this time, however, the local union was dependant on cash infusions from the international, which was providing SEIU Texas more than $3 million per year since 2013, according to court documents. A consultant hired by the union cast doubts whether the local union could survive without the financial support. Subsidies in 2014, 2015 and the first nine months of 2016 represented at least 80 percent of the local union’s revenue, according to court records.
SEIU officials would not say what their next steps might be, but its conference room is still lined with picket signs and photos of its Justice for Janitors and Fight for $15 campaign, the nationwide campaign to boost the nation’s minimum wage to $15 an hour.
The union is helping to organize protests against Republican efforts to dismantle the federal health care law known as Obamacare, including one this week that will start in front of Sen. Ted Cruz’s office and then move to Houston City Hall.
The SEIU has also teamed up with other local unions to encourage the Houston City Council to join the fight against the new immigration law SB4 that would ban local elected officials from adopting policies that limit local cooperation with immigration enforcement, said Hany Khalil, executive director of the Texas Gulf Coast Area Labor Federation, an umbrella group for 80 local unions and their 50,000 members.
“Workers who are afraid don’t stand up for their rights at the workplace,” Khalil said.
SEIU also continues to represent commercial janitors in Houston and negotiated a new four-year labor agreement last year. Janitors received a 25 cents an hour raise this year, to $9.60 for experienced janitors, according to the collective bargaining agreement. By 2020, wages will increase to $10.45 an hour.