The conviction last week of former Ironworkers boss Joseph Dougherty on federal criminal charges is being heralded by business leaders as no less than the beginning of the end of organized labor thuggery in Philadelphia, and nationwide.
"The Dougherty conviction tells our business and political leaders that union bullying won’t be tolerated any more," said Robert N. Reeves, President of E. Allen Reeves, Inc., a Philadelphia area open shop contractor and victim of union harassment. "It has hurt the region competitively for far too long."
Dougherty’s criminal conviction in Philadelphia for extortion and violence against nonunion contractors opens the way for civil actions against the unions, labor law experts say. Open shop contractors now have legal recourse where none existed before. The conviction takes a 1973 U.S. Supreme Court ruling that effectively shielded union thugs from prosecution, U.S. v. Enmons, and turned it "on its head", according to Philadelphia attorney Wally Zimolong, who represents contractors with union disputes.
"The Enmons ruling said basically that activities like harassment and violence that are criminal are protected if they further union objectives, like protecting high wages," Zimolong said. "The Dougherty conviction changes all that. Unions are no longer able to preserve the market for only themselves through threats and violence." Zimolong added that the civil actions can now be brought by open shop contractors under a racketeering statute RICO that was enacted by Congress in 1970 as a prosecutorial weapon against the Mafia.
"To bring a civil action under RICO, you need a predicate action," Zimolong said. "A criminal conviction not only gives you that but it makes it much easier to argue in a civil case if there already is a criminal conviction. Before, contractors had no recourse because of the protection under Enmons there was no predicate action."
Zimolong added that besides RICO, the other key federal law in bringing civil actions against union thugs is the Hobbs Act, a 1946 law that makes it a federal crime to conspire to commit extortion.
"The problem before the Ironworkers’ conviction was that the Enmons case shut out a civil RICO claim against a trade organization because Enmons held that the Hobbs Act was not violated so long as a union was furthering legitimate objectives," Zimolong said. "Now that courts have held that a violation of the Hobbs Act does occur when unions commit extortion against non-union contractors and the owners that hire them, suddenly, a civil RICO claim against a labor union becomes easier to bring."
What’s more, losing a civil case under RICO is so penal that a federal judge once called it "the litigation equivalent of a thermonuclear device" – it’s three times damages and attorney’s fees.
"In the past judges dismissed actions against the unions because the Enmons case protected them from violating Hobbs," Zimolong said. "With a Hobbs conviction you not only try the case criminally but have a great argument for damages."
PMA Executive Director David N. Taylor said the news of the conviction marks a dramatic turn in the construction industry. "Union intimidation has been a blight on Pennsylvania’s economy for years," Taylor said. "Dougherty’s criminal conviction gives the Philadelphia region a chance to earn a new reputation as place where people can freely do business. For that to happen, there must first be a change in state law to end Pennsylvania’s deadly culture of union intimidation and violence."
The conviction should give momentum to an effort in the General Assembly to remove exclusions from the crimes code that allow harassment, stalking, and making deadly threats as long as the accused party is involved in a labor dispute. (Legislation to end the carve-out in the Crimes Code has been introduced in the General Assembly. A more in-depth view of the effort will appear in the next PMA Bulletin.)
A Department of Justice statement released before the Dougherty trial described how Ironworkers Local 401 would target construction sites in Philadelphia that employed open-shop workers. Union business agents would, "imply or explicitly threaten violence, destruction of property, or other criminal acts unless union members were hired," the news release says.
"The defendants created ‘goon’ squads, composed of union members and associates, to commit assaults, arsons, and destruction of property. One such squad referred to itself as ‘The Helpful Union Guys (T.H.U.G’s)."
The National Right to Work Committee estimates that Philadelphia alone has probably seen over 45 incidents of union violence yearly, for almost 40 years. The actual number is likely much higher since most incidents went unreported because, as Reeves said, contractors had little legal recourse. "We’re in the construction business," he said. "Why waste time in court when there was no point in going to court in the first place."
For Reeves, the most egregious incident occurred in late 2013 with $500,000.00 in damages to a Quaker Meeting House his firm was building in the Chestnut Hill section of Philadelphia. "Do I think it was the unions?" Reeves said at the time. "I don’t think it was a group of 10-year-old boys."
News of the conviction was also welcomed by Sarina Rose, Vice President of Development at Philadelphia-based Post Brothers Apartments. The firm has used some open-shop labor, but not exclusively, to refurbish residential and commercial properties in the city. Over the past three years, Rose has been stalked, had her children followed and photographed, and in an incident last year in a Philadelphia diner was accosted by a Dougherty associate who shoved her, made threatening gestures, and shouted sexual slurs.
"It’s a relief," she said referring to the conviction. "It now gives us a recourse if we choose to go that way." Rose said it has never been their intention to use only non-union workers. "We have always done things based on merit," she said. "It’s what’s best for our buildings and for the city of Philadelphia."
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