Orta v. SEIU Healthcare Mich., CASE NUMBER: 10-15060

ROSALINDA ORTA, SARAY MEDINA, and URSEAL WARD, Plaintiff(s),

v.SEIU HEALTHCARE MICHIGAN, Defendant.

CASE NUMBER: 10-15060

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

Dated: March 29, 2013

HONORABLE GERALD E. ROSEN

OPINION AND ORDER REGARDING

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

This unfair labor practices case under 29 U.S.C. § 187 (LMRA § 303) and 29 U.S.C. § 158(b)(4) (NLRA § 8(b)(4)) is presently before the Court on Defendant SEIU Healthcare Michigan's Motion for Summary Judgment. Plaintiffs Rosalinda Orta, Saray Medina, and Urseal Ward have responded, and Defendant has replied. Having reviewed and considered the parties' briefs and supporting documents and the entire record of this matter, the Court has determined that the pertinent allegations and legal arguments are sufficiently addressed in these materials and that oral argument would not assist in the resolution of this motion. Accordingly, the Court will decide Defendant's motion on the briefs. See L.R. 7.1(f)(2). This Opinion and Order sets forth the Court's ruling.

II. PERTINENT FACTS

A. The Parties

Plaintiffs, Rosalinda Orta, Saray Medina, and Urseal Ward are former employees of the Cassie Stern Healthcare Workers Education and Training Center ("CSC"), which was a non-profit training center for healthcare workers. Orta began work with CSC on March 3, 2008, as a Program Coordinator and was responsible for safety and security training. Medina was a Case Manager and commenced her employment on June 16, 2008. Ward was employed with CSC as a Job Development Coordinator and started on October 16, 2008. All Plaintiffs were terminated on June 23, 2010.

CSC's mission was to provide educational and charitable assistance to the public by training and educating individuals for healthcare jobs. As part of its mission, CSC partnered with Nexcare Health Systems ("Nexcare"), a major corporate operator of nursing homes and long term care facilities in Michigan. The partnership between Nexcare and CSC consisted of Nexcare paying approximately one-half of Orta's salary, and in return, two of Nexcare's employees were given seats on CSC's Board of Directors.

Anita Caref was the Executive Director of CSC from its inception in 2007 until she resigned on May 27, 2010. Caref's husband, Doyle O'Connor, a labor attorney and an administrative law judge, served as CSC's secretary and was also a member of CSC's Board of Directors.

Defendant, SEIU Healthcare Michigan ("SEIU HCMI"), is a labor organization representing approximately 55,000 healthcare workers in Michigan, including healthcare workers at seven Nexcare facilities. CSC was created with the help of, and on behalf of, SEIU HCMI. As a non-profit organization, CSC was funded primarily through various government and private grant programs. However, SEIU HCMI would occasionally transfer funds to CSC to cover short-term budget gaps when CSC would be between grant money.

Marge Faville is the president of SEIU HCMI. Faville also became the president of CSC upon Anita Caref's resignation as Executive Director. Thus, as of May 27, 2010, Faville maintained two positions concurrently: she was the President of SEIU HCMI, the Defendant; and the President of CSC, Plaintiffs' employer. Chuck Lobaito, SEIU HCMI's director of finance, is also CSC's treasurer. Mark Raleigh is SEIU HCMI's Chief of Staff.

B. The Nexcare and SEIU HCMI Dispute

As indicated, Nexcare was a cooperating partner with CSC, and it owned the Nexcare Training Institute, a separate facility which provided Certified Nurse Assistant training to workers after they were screened and received initial training from CSC. In March 2010, Nexcare filed a Unit Clarification Petition with the National Labor Relations Board ("NLRB") seeking to exclude certain nurse supervisors from existing bargaining units with SEIU HCMI. Faville, as the President of SEIU HCMI, disagreedwith the petition because, if approved, the petition would have had the effect of excluding certain members from the union, thereby decreasing union membership.¹

On April 29, 2010, Mark Raleigh, SEIU HCMI's Chief of Staff, met with CSC's Executive Director Anita Caref to inquire as to the extent of CSC's partnership with Nexcare. Raleigh informed Caref that SEIU HCMI was planning to strike Nexcare in retaliation for its NLRB petition. The parties provide different accounts of what was said during the meeting.

According to Caref, Raleigh told her that the relationship between Nexcare and SEIU HCMI would become heated; he "demanded" to see a list of transactions between CSC and Nexcare; and he "demanded" and "ordered" that CSC cease doing business and "sever all ties" with Nexcare because CSC would need to go along with SEIU HCMI's response to Nexcare's NLRB petition. See Plaintiffs' Response Brief, p. 4.² After the conversation with Raleigh, Caref consulted her husband, Doyle O'Connor, who advisedher against following through on Raleigh's request and told her CSC should remain a neutral party.

On May 27, 2010, Caref resigned from CSC for reasons unrelated to this case, and Marge Faville took her place as of that day. Faville continues to concurrently hold two positions: that of SEIU HCMI president, and president of CSC.³

C. CSC Board of Directors Meeting

At a CSC Board Meeting held on June 22, 2010, in order to maintain a neutral position in the dispute between Nexcare and SEIU HCMI, O'Connor proposed -- and the CSC Board of Directors by a vote of 6-2, passed over Faville's objections -- a neutrality resolution. Also during the meeting, the Board voted to name one of the plaintiffs, Rosalinda Orta, as Interim Coordinator to run CSC's daily affairs. CSC's treasurer, Chuck Lobaito, also discussed CSC's finances during the meeting. Although Lobaito's financial report concluded that CSC had long-term funding issues, no short-term budgeting was discussed, nor was there any discussion of not meeting payroll or potential lay-offs or terminations. According to Doyle O'Connor, Lobaito merely reported that CSC

had long range funding issues, that we had to work harder to get more grants, but, basically, we were fine right now. It was a little tight. . . [The Board] knew that there was money, and we knew that it was tight. We knew that it wasn't enough to get us through the end of the year, but it wasclearly not a crisis. It was, basically, we've got to hold our breath until . . . [t]he next grant that was due.

[O'Connor Dep., pp. 168-69, 170.]

D. Plaintiffs' Terminations

The following day, June 23, 2010, Lobaito learned that CSC did not have enough money to cover payroll. On that same day, Faville ordered Lobaito to terminate Plaintiffs Orta, Medina, and Ward, the three individuals who represented CSC's entire full-time staff. (Faville did not discuss Plaintiffs' terminations with the CSC Board.) Plaintiffs contend that termination of CSC's full-time staff "killed" CSC.⁴ The next CSC Board meeting occurred on August 30, 2010. At that meeting, according to O'Connor, Faville continued to assert that Plaintiffs' terminations were due to financial reasons and that the union was going to have to "subsidize" CSC. However, Faville was not "willing to do that [and]. . . she had [Lobaito] lay everybody off because of lack of funds." O'Connor Dep., p. 174. Subsequently, on October 10, 2010, CSC was automatically dissolved as a Michigan corporation due to its failure to file the requisite annual reports with the Secretary of State.

E. Litigation

On December 21, 2010, Plaintiffs commenced this action alleging violations of the National Labor Relations Act ("NLRA") and Labor Management Relations Act ("LMRA"), 29 U.S.C. §§ 158(b)(4), 187. In addition, Plaintiffs' complaint alleged state law claims of retaliatory discharge and tortious interference with Plaintiffs' employment contracts.

In lieu of an answer, Defendant filed a FED. R. CIV. P. 12(b)(6) Motion to Dismiss. This Court denied the motion and ordered the parties to complete discovery. After the close of discovery, Defendant filed a FED. R. CIV. P. 56(a) Motion for Summary Judgment seeking entry of summary judgment in their favor on all counts, including Plaintiffs' two state claims for retaliatory discharge and tortious interference. With respect to these state law claims, Defendant argued that they are preempted by the Supreme Court's Garmon Doctrine ⁵ because state regulations and state causes of action are completely preempted if they concern conduct that is either prohibited or protected by the NLRA. In their response to Defendant's Motion, Plaintiffs conceded that their two state counts are preempted. Therefore, the only issue remaining before this Court is whether Defendant violated NLRA's prohibition against secondary boycotts by labor organizations aimed at neutral secondary employers. With regard to this federal claim, Plaintiffs contend that the terminations of their employment which ultimately led to CSC's demise, amounted to unlawful "threats, coercion, or restraint" by the Defendant with the object of forcing CSC to cease doing with Nexcare.

III. STANDARD OF REVIEW

Summary judgment is proper if the moving party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). According to Celotex Corp. v. Catrett, 477 U.S. 317 (1986), "the plain language of Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552 (1986).

In deciding a motion for summary judgment under Rule 56, the Court must view the evidence in light most favorable to the nonmoving party. Pack v. Damon Corp., 434 F.3d 810, 813 (6th Cir. 2006). However, the nonmoving party may...