Smithfield Sues Union As Racketeering Enterprise

The Wall Street Journal reports:

Smithfield Foods Inc. yesterday sued the United Food and Commercial Workers Union, accusing it of using "illegal extortionate pressure" to drive the company out of business unless Smithfield allows the union to exclusively represent some 4,650 workers at its largest pork-processing plant.

The unusual action, filed in U.S. District Court in Richmond, Va., was brought under the federal Racketeer Influenced and Corrupt Organization Act. Smithfield, the world's leading pork processor and hog producer, said it sought relief to "hinder future attempts by the union to further damage" its business.

The lawsuit accuses the union of "a public smear campaign, frivolous regulatory investigations, the communication of false statements to analysts intended to reduce Smithfield's stock price" and other actions designed to "drive Smithfield out of business unless the company agreed to meet (union) demands against its will."

Gene Bruskin, director of the union's campaign against Smithfield, said he hadn't had a chance to read the entire lawsuit, but he added, "It's really a shame that ... the company is willing to spend millions of dollars on high-priced lawyers to fight the case rather than spending money to provide basic improvements for workers. You've got a plant with thousands of workers that are crying out for basic safety and health improvements."

The lawsuit is yet another volley in a protracted fight between the company and the union over the union's years-long effort to represent hourly employees at Smithfield's Tar Heel, N.C., slaughterhouse. It came one day after both sides said they had broken off talks on holding an organizing election for workers.

Legal experts said it's unusual for a company to sue a union under the racketeering statute. But they said such moves are becoming more common as key labor laws are increasingly seen by some as ineffective in bringing about swift remedies for either side during protracted organizing campaigns or other disputes. Traditionally labor disputes have been adjudicated under the 1935 National Labor Relations Act.

Smithfield shares rose $1.18, or 4%, to $31.05 in 4 p.m. composite trading on the New York Stock Exchange, but fell back to $30.51 in after-hours trading.

What businessman wants to deal with a union?