Advocates for Labor and Progressive Institutions

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Third Circuit affirms that unions’ corporate social responsibility campaign did not violate RICO

December 27, 2021

The United States Court of Appeals for the Third Circuit held that unions pursuing legitimate labor objectives via “sharp-edged economic means or ‘hardball’ tactics” are not guilty of extortion under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).

A chain of nursing homes had sued the Service Employees International Union and two of its locals, alleging that the unions’ pursuit of collective bargaining and organizing goals by, among other conduct, means of a public advertising and internet campaign critical of the plaintiffs’ business and labor practices qualified as RICO predicate acts of extortion.

 Applying the claim-of-right doctrine, the Third Circuit concluded that the Unions’ conduct was not extortionate. It further concluded that the plaintiff nursing home chain had failed to create a dispute of material fact as to whether the unions’ advertising and internet campaign constituted mail or wire fraud. Over the dissent of one judge, the Third Circuit thus affirmed the underlying decision of the United States District Court for the District of New Jersey, which had granted the unions summary judgment. Bredhoff & Kaiser represented the defendant unions before the Third Circuit, as it had through seven years of litigation before the District Court. Care One Mgmt., LLC v. United Healthcare Workers East, SEIU 1199, 22 F.4th 128 (3d Cir. 2021).