Services Employees International Union v. National Union of Healthcare Workers, 718 F.3d 1036

SEIU international and United Health Workers (UHW) disputed SEIU’s long-term care worker realignment plan to consolidate California workers into a new SEIU-affiliated local; tension peaked in 2008–2009.
SEIU proposed consolidating 150,000 long-term-care workers from three locals, including about 65,000 from UHW, into a new California local; UHW officers opposed the plan.
SEIU appointed a hearing officer and sought a trusteeship to enforce the realignment; a trusteeship hearing occurred under former Secretary of Labor Ray Marshall’s supervision.
Marshall recommended trusteeship if UHW refused to cooperate; SEIU placed UHW into trusteeship on January 27, 2009 after a written SEIU resolution.
Defendants, UHW officers, subsequently formed NUHW and sought to disaffiliate or decertify UHW to become the bargaining representative; SEIU sued for breach of fiduciary duties.
A jury found the defendants breached fiduciary duties under § 501 and California law, awarding damages (NUHW was assessed $724,000) and other individual damages to various defendants.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does § 501 impose a fiduciary duty to the union as an organization?	Plaintiff argues duty runs to the organization, not only to rank-and-file members.	Defendants argue duty is owed only to rank-and-file members.	Duty owed to the union as an organization.
Does § 411 free-speech protection shield conduct that weakens the union?	Speech criticizing or opposing the union should be protected.	Certain conduct could be protected as speech under § 411.	Conduct designed to impair the union’s functioning is not protected.
Can authorization defenses shield officers’ actions that violated constitutions?	Actions authorized by resolutions or votes might shield liability.	Authorized acts should exempt liability if in line with governing documents.	No authorization defense where actions violated the union constitutions.
Was the jury verdict properly interpreted as several liability rather than joint-and-several?	The jury intended joint liability for damages.	The jury may have intended several liability; district court should reflect that.	District court’s interpretation of the verdict as several liability was upheld.

Kerr v. Shanks, 466 F.2d 1271 (9th Cir. 1972) (LMRDA fiduciary duty scope to unions)
Stelling v. Int’l Bhd. of Elec. Workers, Local Union No. 1547, 587 F.2d 1379 (9th Cir. 1978) (fiduciary duties and internal union matters)
Navarro v. Gannon, 385 F.2d 512 (2d Cir. 1967) (local vs international union fiduciary duties)
Guzman v. Bevona, 90 F.3d 641 (2d Cir. 1996) (expenditures violating union constitutions as fiduciary breaches)
Ferguson v. Int’l Ass’n of Bridge, Structural & Ornamental Iron Workers, 854 F.2d 1169 (9th Cir. 1988) (conduct, not protected speech, that destroys union functions)
Local No. 92, Int’l Ass’n of Bridge, Structural & Ornamental Iron Workers v. Norris, 383 F.2d 735 (5th Cir. 1967) (authorization defense when actions conflict with constitution)
Johnson v. Paradise Valley Unified Sch. Dist., 251 F.3d 1222 (9th Cir. 2001) (standard for substantial evidence review)
Scott v. Pasadena Unified Sch. Dist., 306 F.3d 646 (9th Cir. 2002) (clear error standard for injunction-based findings)
Lassiter v. City of Bremerton, 556 F.3d 1049 (9th Cir. 2009) (substantial evidence standard in appeals from verdicts)
Floyd v. Laws, 929 F.2d 1390 (9th Cir. 1991) (seventh amendment and verdict interpretation in multi-defendant cases)
United States v. Hinkson, 585 F.3d 1247 (9th Cir. 2009) (standard for reviewing verdict interpretations on appeal)