Smithfield Foods filed a $6 million civil racketeering suit against the United Food & Commercial Workers International Union, which has been trying to organize workers at the company's hog slaughter plant in Tar Heel.
RICO suits, as they're known, are generally used to prosecute organized crime.
The suit, filed in U.S. District Court of Eastern Virginia, alleges UFCW has engaged in "extortionate and unlawful conduct," including letters, press releases and statements sent to the media and financial analysts about the company's alleged mistreatment of workers. "The endless stream of press releases is designed to have a cumulative effect on the public," the suit says.
However, the Center for Union Facts, an anti-union group working on behalf of many U.S. corporations including Smithfield, paid for dozens of television ads, which ran this year on local stations, denigrating the UFCW.
The suit also extends the unlawful conduct to include filing "frivolous" labor safety complaints; UFCW demonstrations at annual shareholders' meetings; organized boycotts of groceries carrying Smithfield products; and "interference with Smithfield's application for a water permit at its Tar Heel Plant." In the latter case, the company noted that organizer Libby Manly stated at a public hearing the permit "would do tremendous damage to Smithfield workers and the environment." The N.C. Department of Environmental and Natural Resources granted Smithfield the permit. As a company, Smithfield's environmental record is less than stellar: Its Virginia operations was fined $12.6 million by the Environmental Protection Agency for violating the Clean Water Act.
Gene Bruskin, UFCW campaign director, said the union's lawyers are studying the suit, which was filed a day after talks failed between UFCW and the company over procedures for union elections. Bruskin noted that if Smithfield wins, the case could set a dangerous precedent. "This essentially says any citizen group—left-wing, right-wing or in the middle—has no right to protest."
The suit claims the UFCW's actions have had "a lasting and irreparable effect on Smithfield," costing the world's largest hog producer "millions of dollars in lost or reduced business, contracts and promotional and ad opportunities."
According to Smithfield investor information, sales for fiscal year 2007 were $11.9 billion, up $500,000 from the previous year; net income dipped $6 billion. Financial observers have attributed the downturn in its stock prices to high feed costs and expansion of the hog herd.