FORT LEE, N.J.--(BUSINESS WIRE)--In a setback for the Service Employees International Union (SEIU) and two local affiliates, the unions’ motion seeking dismissal of a federal RICO suit against them has been denied.
On Oct. 10, 2012, HealthBridge Management, LLC and CareOne Management, LLC, and others jointly filed the RICO suit, claiming that the unions deemphasized traditional labor relations in favor of a coordinated corporate campaign involving extortionate threats and acts of mail and wire fraud. Late last week, a federal judge denied a motion by the SEIU, United Healthcare Workers East, SEIU, 1199 (UHWE) and New England Health Care Employees Union, District 1199, SEIU (NEHCEU), to dismiss the RICO suit.
This follows a decision in 2013 rejecting the UHWE and NEHCEU’s motion to dismiss the case in its entirety and allowing certain claims under RICO to proceed. The case is being heard by United States District Judge for the District of New Jersey.
“We are gratified that the court agreed with us that the unions’ conduct warrants scrutiny under RICO. We firmly believed that the claims we have alleged would withstand motions to dismiss and that belief has been verified by the court,” said CareOne CEO Daniel Straus.
RICO is the acronym for the Racketeer Influenced and Corrupt Organization Act.
In their October 2012 statement announcing the RICO suit, the two companies stressed that they have worked cooperatively with unions in the past and fully respect and embrace the collective bargaining process. They said the suit is not about collective bargaining or other traditional labor activity but instead involves what they claim is a campaign of extortionate demands and myriad unlawful tactics used against the companies by the unions.
HealthBridge and CareOne are separate independent but affiliated companies that operate long-term nursing care and assisted living healthcare facilities for the elderly. HealthBridge manages facilities in New Jersey, Connecticut and Massachusetts; CareOne manages facilities in New Jersey. Both companies are located in Fort Lee, N.J.