Back in Court: California Hospital Association Sues SEIU-UHW for Millions Locked up in Covert Partnership Organization

The California Hospital Association (CHA) has taken SEIU-UHW to court… again.

This time, CHA is trying to recover tens of millions of dollars that SEIU-UHW has locked away inside a secret “partnership” organization, according to records obtained from Sacramento County Superior Court. (Below is a full copy.)

On October 14, CHA’s and SEIU-UHW’s attorneys will face off in a Sacramento courthouse.

Here’s what’s happening.

When SEIU-UHW’s Dave Regan and CHA’s Duane Dauner signed their secret partnership deal in 2014, they also agreed to set up and finance a secret new organization to carry out their joint projects.

The new organization’s first priority was to help SEIU-UHW convince politicians to steer $6 billion a year in new Medicaid funds to California’s giant hospital corporations.

 

Dave Regan and Duane Dauner

If SEIU-UHW had succeeded in this task (they didn’t), then the hospital CEOs would have allowed SEIU-UHW to unionize 30,000 of their employees… but only as long as the workers were banned from striking, forced into cheap labor contracts, and silenced by a massive gag clause.

The covert partnership organization -- ironically named “Caring for Californians” by its founders -- was funded with $50 million that Regan and Dauner diverted from their treasuries in 2014.

With millions in its bank count, “Caring for Californians” leased office space in Sacramento, hired Peter Ragone as its Executive Director, hired attorneys and staff, etc. The organization was soon spending $40,000 a month in operating expenses, according to court filings by the CHA.

For a time, things were going swimmingly for Wall Street Dave. Fantasies of his class-collaborationist partnership danced through his head as he performed late-night lap dances for some of California’s wealthiest corporate CEOs.

Peter Ragone, CFC's Executive Director

By November of 2015, however, Dave’s partnership had exploded in a fiery display that lit up California’s skies. The partnership was dead!  

At the time of the partnership’s demise, “Caring for Californians” still had $34 million in unspent cash sitting in its bank account.

And that’s what the latest lawsuit is all about. The $34 million.

Under the terms of Regan and Dauner’s secret partnership deal, the $34 was supposed to be returned to CHA and SEIU-UHW on January 1, 2016. However, Regan -- in an apparent fit of vindictiveness against his former pin-striped pals -- is refusing to return the money to either organization.

According to CHA’s lawsuit, Regan has vetoed any return of the money to both CHA and SEIU-UHW.

How?

“Caring for Californians” is run by an eight-person Board of Directors, with equal numbers of seats filled by CHA and SEIU-UHW. Regan and Dauner are co-chairs of the board. Since January of 2016, says CHA, Regan has used his four votes (one of them is SEIU-UHW staffer Arianna Jimenez) to block every proposal to return the $34 million.

So what’s happening to the money?

It’s simply swirling down the drain, says CHA. 

Here’s an excerpt from a recent CHA legal filing, which refers to “Caring for Californians” by its initials “CFC.” The term "Code of Conduct" refers to the secret partnership deal signed in 2014.

“On December 31, 2015, the Code of Conduct terminated pursuant to its terms. Since that time, CFC has had no ongoing work, and neither CHA, UHW, nor any CFC Director has made any efforts to initiate new endeavors. Nonetheless, CFC has continued to spend approximately $40,000 each month on operating expenses for resources and services it has not been using. These are not only unnecessary expenditures, but they also decrease the amount available for redistribution to both CHA and UHW as provided by the Code of Conduct.” (p. 3)

Interesting, right?

 

SEIU-UHW's Arianna Jimenez

Regan is so vindictive he’s willing to piss millions of dollars of SEIU-UHW members’ money down the drain to get back at CHA.

How much money do SEIU-UHW members stand to lose? According to the CHA:

“As of September 1, 2016, the CFC has approximately $34 million in its accounts that is not currently encumbered. Pursuant to the terms of the Code of Conduct, approximately $27.2 million would be returned to CHA and approximately $6.8 million would be returned to UHW.” (p. 4)

What’s CHA asking the judge to do?

CHA’s lawsuit asks the judge to force SEIU-UHW into binding arbitration so it can recover its $27.2 million. Plus, it wants SEIU-UHW to pay all of CHA’s attorneys fees.

If history is a judge, it looks like SEIU-UHW’s members will be footing the bill for yet another idiotic blunder by Regan.

Here’s a copy of CHA’s suit filed on September 6, 2016:

  California Hospital Association's lawsuit versus SEIU-UHW over $34 Million Locked in Secret Partnershi...

UNITE HERE Leaders: SEIU Is Undermining the U.S. Labor Movement

Andy Stern: Pimping for the plutocrats

Two leaders at UNITE HERE have penned a sharp critique of SEIU.

The piece, entitled “Labor’s Neoliberal Caucus” in Jacobin Magazine, criticizes SEIU for pushing a boss-friendly, “neoliberal” style of unionism that’s undermining the US labor movement.

The authors -- Warren Heyman (an international vice president of UNITE HERE) and Andrew Tillett-Saks (the organizing director for UNITE HERE Local 217) -- define “neoliberal unionism” as “a unionism that espouses collaboration with corporations instead of conflict and upholds free-market capitalism as reconcilable with labor’s interests.”

According to the article, the “modern wave” of this boss-friendly unionism “is rooted in SEIU and its former president Andy Stern’s push for neoliberal unionism in the 2000s.”

Stern, who made backroom deals with CEOs as SEIU’s president and also tried to stamp out internal critics through trusteeships, has continued walking down the same ideological path since his retirement.

Only days after retiring, Stern accepted tens of thousands of shares of stock and a fully paid job from Ron Perelman, a billionaire corporate raider who’s one of the world’s richest men. Perelman has showered Stern with gifts in apparent exchange for sweetheart labor deals that Stern negotiated from SEIU's Purple Palace in Washington DC, including a deal with one of Perelman's many companies, AlliedBarton.

Here’s an excerpt from Heyman’s and Tillett-Saks’ article regarding Stern’s role in pushing neoliberal unionism:

Stern explicitly and aggressively pushed the labor movement to adopt a “collaborationist” approach towards capital; according to the Stern ideology, workers and unions don’t have to fight corporations, just build “relationships” with them and cajole them into a mutually beneficial partnership.

In this spirit, Stern and SEIU amassed a lengthy record of striking deals with corporations that sold out workers’ ability to fight in exchange for promises of union recognition… SEIU expanded, but what expanded was a neutered shell of a labor movement, full of members with preposterous contracts and little ability to fight for better.

Stern is gone but his ideological legacy remains… From embracing free-market capitalism to embracing employers to embracing their political representatives, the political and intellectual lineage is clear.

SEIU-UHW’s Dave Regan is clearly one of Stern’s disciples.

Regan famously inked a secret deal with the California Hospital Association that banned strikes, forced workers into pre-negotiated contracts with stripped-down wages and benefits, and imposed a gag clause that blocked SEIU members from criticizing their employers or mentioning their CEOs’ sky-high salaries.

On Labor Day of 2014, Regan famously told NBC-LA TV News that the idea of strikes and “adversarial relationships” between workers and corporations is “outdated.” Instead, says Regan, unions must “collaborate” with corporate CEOs to create a new “teamwork” economy.

Below, see a two-minute excerpt from Regan’s NBC TV interview in which he describes his vision of SEIU's idea of "21st century" unionism.

Heyman and Tillett-Saks conclude their article by issuing a call to arms to US workers and unions, who they say must confront and battle SEIU inside the US labor movement.

The proliferation of this model of unionism would spell disaster for the American labor movement. Our movement’s success depends on how widely and how militantly we can organize workers to fight corporate power and the 1 percent, not embrace them.

Union members and leaders must do everything in their power to halt the march of neoliberal unionism, before they march the labor movement straight into its grave. 

What does "neoliberal unionism" look like? Check out this 2-minute excerpt from Regan’s interview with NBC TV News on Labor Day, 2014:

Dignity Healthcare Workers Bolt SEIU-UHW, Leaving Stan Lyles to Swallow His Words

Stan "Mr. Integrity" Lyles

Some workers at Dignity Healthcare report that not all employees were affected by SEIU-UHW’s recent bargaining during which management demanded more cuts to workers' wages and benefits.

In 2015, a unit of workers at Dignity's Northridge Hospital Medical Center in Los Angeles left SEIU-UHW after requesting an NLRB election to dump the union. The workers include clinical lab scientists, social workers (MSWs and LCSWs), radiation therapists, and nuclear medicine technologists.

According to NLRB records, the workers filed a formal “decertification” petition with NLRB Region 31 in Los Angeles. After SEIU-UHW officials realized they’d get trounced in an election, they decided to threw in the towel and let the workers go without an election -- what’s called “disclaiming interest in the unit,” in NLRB parlance.

Why did the Dignity workers bolt from SEIU-UHW?

They say SEIU-UHW never did anything for them... and wouldn’t even return workers' phone calls.

The workers’ action is especially embarrassing for SEIU-UHW Vice President Stan Lyles, who formerly worked at Northridge Hospital Medical Center. Lyes tells everyone he’s got “rockstar” status with his former co-workers at Northridge.

Not quite, Stan.

But... if you really want to see a rockstar performance by Stan, check out the following  video of Stan attacking SEIU for its undemocratic practices in 2008.

Lyles, speaking at a meeting of Teamsters for a Democratic Union (TDU), attacks SEIU officials for making back-room deals with CEOs -- including a secret deal with Tenet Healthcare to allow the company to subcontract the jobs of more than 10% of SEIU-UHW's members.

That's one of the dirty moves that prompted SEIU-UHW members to publicly criticize Andy Stern and SEIU in 2007 and 2008, which then caused Stern to remove SEIU-UHW's elected leaders through a trusteeship in 2009.

After imposing the trusteeship, SEIU officials gave Lyles a big purple paycheck to abandon his principles and pledge his allegiance to Andy Stern, Dave Regan, and the other Purple Palace officials whom he had so sharply criticized.

Lyles, who had aggressively opposed the trusteeship, quickly changed his tune. Ain’t it interesting what a boatload of cash will due to the moral compass of some people?

Perhaps that’s why Lyles has earned the nickname of “Mr. Integrity.”

Here’s the video of Lyles attacking SEIU in 2008, before he received his big payoff from Andy Stern: