Wednesday, December 2, 2015

Kablam! SEIU-UHW Dave Regan’s "Partnership" with the California Hospital Association Crashes and Burns

Plaintiff Regan and Defendant Dauner
In case there was any doubt about the implosion of Dave Regan's partnership with the California Hospital Association (CHA), check out the latest news...

On November 24, SEIU-UHW sued the CHA’s CEO Duane Dauner in Sacramento County (Calif.) Superior Court for ditching Regan in favor of his new pals Mary Kay Henry, Laphonza Butler, Jon Youngdahl, the SEIU California State Council, the California Teachers Association, and the California Medical Association.

The full lawsuit is available below. Also, here’s a link to a Dec. 1 article in "Courthouse News."

Regan’s lawsuit -- which reads like a jilted lover’s divorce case -- revolves around Mary Kay Henry’s recent success in outmaneuvering Regan by inking her own secret deal with the CHA.

Under Henry’s deal, the CHA agreed to team up with the SEIU California State Council, the California Teachers Association and the California Medical Association to introduce a statewide ballot initiative that competes head-to-head with Regan’s initiative. Regan's ballot initiative was supposed to be the "centerpiece" of SEIU-UHW’s ongoing partnership and organizing deal with the CHA.

Not anymore. The CHA has pulled its support from Regan's initiative, which is now "certain to fail," according to the lawsuit.
Mary Kay Henry and Laphonza Butler
Basically, the CHA has declared an end to its "partnership" with SEIU-UHW, thereby jettisoning Wall Street Dave like a pair of old shoes. That means an end to Regan's plans to unionize 60,000 hospital workers under a sweetheart deal that gags healthcare workers, bans them from striking, and forces them into contracts with substandard wages and benefits… which Regan famously called an "audacious new proposal to save the labor movement."

This ain't good news for Regan.

He’s poured $15-20 million of SEIU-UHW members' dues into his failed partnership with the CHA. And he’s staked SEIU-UHW's entire future -- including its membership growth and labor relations strategies -- on a partnership that's been relegated to the trash bin.

No wonder Dave is coming unhinged.

Last month, he penned an angry letter ("The Shame of SEIU") in response to SEIU's secret deal with the CHA, in which he wrote he's "repulsed and disgusted" by SEIU officials who are selfishly pursuing "control, internal power and organizational dominance."

He also sent a ranting letter to CHA's members in which he personally attacked his former bedmate, CHA CEO Duane Dauner.

In Dave’s latest act of vengeance, he filed a 23-page lawsuit against Dauner and three other CHA officials… including Greg Adams, a top Kaiser Permanente executive who also serves as the chair of the CHA's Board of Directors. Mark Laret, the CEO of UCSF Medical Center, is another defendant.

Regan's attack on Kaiser's Greg Adams is intriguing and may signal the unraveling of SEIU-UHW’s partnership with Kaiser. According to Regan's suit, Greg Adams "accepted and enabled" the CHA's decision to throw SEIU-UHW under the bus. In addition, Adams "agreed to shut down" the CHA's labor-management cooperation committee with SEIU-UHW, according to the suit, effectively putting the kibosh on Regan's partnership with the CHA.
Defendant Greg Adams, Kaiser Permanente

Here are some excerpts from Regan's suit, which predictably contains plenty of ranting and raving. For example, the lawsuit calls Dauner "corrupt" in its opening line.

The suit also makes interesting claims about secret meetings and clandestine maneuvers carried out by Purple Palace officials in their plot against Regan, as well as the impact of SEIU’s recent decision to strip 80,000 members from SEIU-UHW and transfer them to "SEIU Local 2015."

The following excerpts refer to the two groups that have introduced competing ballot initiatives: the "ABC Coalition" (i.e., the CHA, SEIU California State Council, the California Teachers Association, and the California Medical Association) and the "CFC" (SEIU-UHW).
At or around the same time CFC was developing its idea of a ballot initiative to fix and fully fund the Medi-Cal program, a separate coalition that includes the California Teachers Association ("CTA"), the California Medical Association ("CMA"), and the SEIU State Council ("State Council) (collectively known as the "ABC Coalition"), began to develop a competing ballot initiative…
Defendant Dauner intentionally opposed the filing of CFC's initiative prior to the filing of the ABC Coalition's initiative for a nefarious purpose -- that is, in order to put CFC's initiative at a disadvantage, while providing both a strategic and procedural advantage to the ABC Coalition. Defendant Dauner, however, kept to himself the fact that he had been secretly working with the ABC Coalition to undermine CFC's initiative…
In or around March 2015, Defendant Dauner had been secretly meeting with members of the ABC Coalition, although the ABC Coalition had not yet been formally organized…
During this same period, Defendant Dauner also met with representatives of the SEIU State Council in order to keep them informed of the business of CFC, including but not limited to CFC's confidential "Strategic Plan." The SEIU State Council is led by Jon Youngdahl ("Youngdahl"), who is the Executive Director of the State Council, and Laphonza Butler ("Butler"), who is the President of the State Council.
In addition, Butler is the President of the SEIU, United Long-Term Care Workers ("ULTCW") as well as the provisional President of SEIU, Local 2015. Local 2015 represents approximately 285,000 home-care and nursing home workers m California… Local 2015 is the result of a merger of home care and nursing home members from three SEIU-affiliated Unions: SEIU Local 521, ULTCW, and UHW. As a result of the merger, UHW lost half its membership to Local 2015.
Prior to the merger, representatives of the SEIU State Council informed Defendant Dauner that Regan would soon lose half of UHW's membership and that Defendant Dauner needed to deal with Butler and the State Council – not Regan and UHW – if he wanted to accomplish any legislative and policy goals that were important to CHA's members.
Beginning in or around March 2015, Defendant Dauner decided to work covertly with CMA, the SEIU State Council, and CTA, while duplicitously pretending to carry out his duties as a Director and Officer in the interest of CFC.
Defendant Dauner chose to work with the ABC Coalition for several reasons. First, he feared CTA's political reach in Sacramento. Second, he no longer wanted to be involved in a "strategic partnership" with UHW because the partnership was threatening his power within CHA, and members of CHA were calling for an end to the partnership for ideological reasons. Third, he believed that he could take advantage of an internal SEIU disagreement between Butler and Regan regarding the transfer of UHW members into Local 2015…
On November 2, 2015, Defendant Dauner requested a conference call with Regan and multiple other persons, including other Directors of CFC to discuss CFC's initiative and his agreement with the ABC Coalition.
On the call, Defendant Dauner revealed that he had been secretly meeting and negotiating with the ABC Coalition regarding its competing initiative…
Defendant Dauner explained that he had engaged in these covert actions because the CHA Board of Directors had instructed him to do so and that a "substantial number of hospitals," affiliated with CHA did not want CHA to participate in CFC or to continue its partnership with UHW. The reason that a substantial number of hospitals wanted to end the strategic partnership between CHA and UHW is because these hospitals are philosophically opposed to the unionization of the hospital industry and seek to remain non-union so that they may continue, without interference, to provide their employees substandard working conditions, pay, and benefits. Because the ABC Coalition does not consist of any labor organization that seeks to organize hospital workers in California, working with the ABC Coalition is preferred over working with UHW.
During the call, Defendant Dauner revealed that his discussions with the ABC Coalition had led to a written agreement, executed by and between CTA, CMA, and the SEIU State Council and Defendant Dauner and CHA.
According to Dauner, the agreement with the ABC Coalition provides that Defendants and CHA will jointly sponsor, and contribute financially to the ABC Coalition's The School Funding and Stability Act of 2016 that is in direct competition with CFC's initiative, Invest in California's Children Act.
Defendant Dauner further agreed to "to veto any expenditure" to support CFC's initiative, and [Kaiser’s Greg] Adams, [UCSF’s Mark] Laret and Holmes agreed to support Dauner in this cessation of CFC's activities. Thus, the CHA Directors agreed to terminate all of CFC's operations by using Defendant Dauner's veto power.
Put otherwise, Defendant Dauner agreed to use his position of power to quash CFC's initiative and to support the ABC Coalition's competing initiative, and the other CHA Directors accepted and enabled this decision. As a result, lacking any financial support, CFC's initiative is certain to fail and the ABC Coalition's initiative will have no effective opposition…
Adams, Laret and Holmes approved this sale after the fact and have since agreed to shut down CFC as part of the deal with the ABC Coalition…
On November 18, 2015, Defendants spoke with Regan regarding the ABC Coalition's initiative. Defendants pleaded with Regan to dissolve CFC. Regan, however, refused to agree to dissolution. In accordance with his agreement with the ABC Coalition, Defendant Dauner stated that he would exercise his veto power, as Co-Chair, on any and all decisions that came before CFC regarding expenditures related to CFC's initiative, which CFC had unanimously voted to file and fund.

The lawsuit alleges that Dauner, Kaiser's Greg Adams, and CHA officials have committed fraud, concealment, breach of fiduciary duty, "conversion," "trespass to chattel," and other "fraudulent or dishonest acts or gross abuse of authority or discretion." It seeks to force the CHA to pay financial damages to SEIU-UHW and also seeks the removal of the CHA's Dauner from his position as a co-chair of the joint labor-management committee set up by the CHA and SEIU-UHW. Regan is the other co-chair.

More details are available in the full lawsuit below.

Stay tuned for more analysis and commentary!