As promised (see prior post here), we are providing an update on the Third Circuit’s decision in Care One Management LLC et al. v. United Healthcare Workers East, et al.  As we addressed at the time, this cased involved allegations of union extortion against various nursing homes and assisted-living facilities across the Northeast as part of a corporate “campaign” against the facilities.  The underlying facts of the case are addressed in greater detail in our original post, but the facilities sued the union, alleging the labor organization violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) based on its conduct.

In December 2021, the Third Circuit affirmed the trial court’s grant of summary judgment in favor of the union defendants and dismissed the case, finding the unions’ conduct did not rise to the level of extortion required for a civil claim under RICO.  Instead of petitioning the Supreme Court to review the Third Circuit’s decision, the facilities requested a panel re-hearing.

Last week, the Third Circuit issued a revised decision after reconsidering the matter.  This time, the Third Circuit ruled in favor of the facilities, concluding that a reasonable jury could find the unions authorized or ratified the alleged extortionate acts of its members, and remanded the case back to the District Court for further proceedings.

The Third Circuit also agreed with the facilities’ argument that the required standard of proof for the unions’ liability for its members’ actions is found in section six of the Norris-LaGuardia Act of 1932, rather than the less stringent standard of proof in the Labor Management Relations Act (the “LMRA”) that was originally applied by the trial court (and originally affirmed by the Third Circuit).  Section 6 of the Norris-LaGuardia Act requires “clear, unequivocal, and convincing proof” that a union participated in, authorized, or ratified the actions of its members, rather than the “preponderance of evidence” standard of proof generally required by the LMRA.

Now the question of the unions’ liability will likely be up to a jury to decide as this case is set to return to the trial court. We will continue to monitor this case and provide updates as it proceeds to trial.

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Photo of Paul Salvatore Paul Salvatore

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

Paul negotiates major collective bargaining agreements…

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

Paul negotiates major collective bargaining agreements in several industries, including real estate and construction. He represents the NYC real estate industry’s multi-employer organization, the Realty Advisory Board on Labor Relations (RAB), and its principal trade organization, the Real Estate Board of New York (REBNY). In 2022, he helped the RAB reach a new collective bargaining agreement with SEIU Local 32BJ, covering more than 30,000 residential building employees. Paul also represented the Cement League, a multiemployer group of NYC area superstructure contractors, in halting an illegal strike by the Carpenters Union and negotiating a significant new, more competitive, collective bargaining agreement. He previously negotiated, on behalf of The Related Companies with 18 New York City construction unions, a landmark project labor agreement (PLA) for Hudson Yards on Manhattan’s West Side, the largest private real estate development in U.S. history. In 2019, he assisted Related in resolving the very public labor disputes at Hudson Yards in time for its grand opening. He also represented REBNY in negotiating its 2019 landmark “Statement of Principles” with NYC’s construction unions. For his work in this sector, City & State magazine has named him one of the most powerful lawyers in New York.

Paul tries arbitrations and litigations, and argues appeals, arising from labor-management relationships. Paul argued and won before the U.S. Supreme Court 14 Penn Plaza LLC v. Pyett. In a 5-4 decision of importance to employers, the Court held a collective bargaining agreement that explicitly requires unionized employees to arbitrate employment discrimination claims is enforceable, modifying 35 years of labor law. In 2016, he argued and won NBC Universal Media, LLC v. NLRB, where the D.C. Circuit — rejecting the National Labor Relations Board’s (NLRB) analysis — found “the reasoning supporting the [NLRB’s] judgment … incomprehensible.” In 2017, Paul argued and won T-Mobile v. NLRB where the Fifth Circuit refused to enforce the NLRB’s ban on certain common sense employee handbook policy provisions, finding the NLRB’s analysis to be unreasonable.

Paul represents universities and colleges in their labor and employment relations, including in the currently active areas of graduate student and adjunct faculty union organizing. He represented Yale, Duke, Chicago, Washington University in St. Louis and other universities in their response to graduate student unionization after the NLRB’s controversial 2016 decision finding graduate teaching/research assistants to be employees under the labor law. He has negotiated innovative non-NLRB election agreements at Cornell and Brown Universities.

An honors graduate of Cornell’s School of Industrial and Labor Relations (ILR) and the Cornell Law School, Paul served eight years on Cornell’s Board of Trustees, including on its Executive Committee. Upon completion of his terms, he was elected Trustee Emeritus and Presidential Councilor. Paul presently serves as a Trustee Member of the Board of Fellows of Weill Cornell Medicine, as well as on the Law School and ILR Deans’ Advisory Councils. In 2002, ILR awarded him the Judge William B. Groat prize, the school’s highest honor.

At Proskauer, Paul was elected to its Executive Committee and served as co-chair of its global Labor & Employment Law Department, named by The American Lawyer and Chambers USA as one of the premier U.S. practices. He is widely recognized as a leading U.S. labor and employment lawyer in such publications as Chambers Global and USA (Band 1), and Legal 500 (“Hall of Fame”). The National Law Journal selected Paul as one of “The Decade’s Most Influential Lawyers” – one of only three in the labor and employment law field. His peers elected him to the College of Labor and Employment Lawyers.

Paul counsels business groups, including the U.S. Chamber of Commerce and its Litigation Center. An active speaker and writer on labor and employment law issues, his publications include “One Dozen Years of Pyett:  A Win for Unionized Workplace Dispute Resolution” in the American Bar Association Labor & Employment Law Journal, Volume 36, Number 2 at 257. He is an Adjunct Professor at the Cornell Law School.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.

Photo of Morgan Peterson Morgan Peterson

Morgan Peterson is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She is a member of the Wage and Hour and the Class and Collective Action practice groups.

Morgan assists clients across a…

Morgan Peterson is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She is a member of the Wage and Hour and the Class and Collective Action practice groups.

Morgan assists clients across a variety of industries with litigations and arbitrations relating to wrongful termination, discrimination, harassment, retaliation, wage and hour, and whistleblower matters in both the single plaintiff and class and collective action contexts. She also counsels employers on a diverse range of workplace issues and their policy and handbook development. Morgan maintains an active pro bono practice representing individuals in immigration matters and providing employment counseling to non-profit organizations.

Morgan earned her J.D. from U.C. Irvine School of Law, where she was an Executive Editor of the UC Irvine Law Review and spent four semesters working in UCI’s Civil Rights Litigation Clinic. Morgan also served as a judicial extern for the Honorable John D. Early in the Central District of California. Morgan received her B.A., cum laude, from Tufts University.