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Conviction of union president who conspired to force nonunion contractors to hire union members upheld

By Ronald Miller, J.D.

The conviction of a local union president for racketeering conspiracy in connection with efforts to force non-union contractors to hire union members was affirmed by the Second Circuit. The appeals court rejected the union president’s challenge to the sufficiency of two predicate acts under the New York Penal Law with regard to instilling fear in the victims that the union would cause personal injury and property damage in connection with two construction projects. The union president sought to extort property that union members could clearly “obtain.” Wages and benefits are capable of passing from the construction contractors to union members, therefore meeting the requirement, for purposes of conviction, that the targeted property was transferable. However, because the government presented insufficient evidence to support a Hobbs Act extortion conspiracy, the conviction of the union president on that charge was reversed (United States v. Kirsch, September12, 2018, Droney, C.).

Union members instructed to “turn or burn.” In 2016, a union local president was convicted of Hobbs Act extortion conspiracy and racketeering conspiracy based on predicate acts of New York Penal Law extortion violations. At trial, the government presented evidence that the union president instructed members to “turn or burn” contractors who did not employ them, meaning that non-union contractors would have to hire union members or the union would obstruct their work. Union members picketed and blocked construction sites, threatened construction managers, tampered with equipment, and destroyed property.

Although the union president was charged with multiple counts of unlawful conduct with respect to numerous contractors, he was convicted only of racketeering conspiracy for his role in attempting to extort two contractors (OSC and EarthTech), and Hobbs Act extortion conspiracy with respect to conduct directed at a third contractor (Amstar).

With respect to OSC and EarthTech, they were awarded contracts to perform certain work. When they refused to hire union employees, company officials were threatened, union pickets blocked entrances to work sites, and property was damaged. As to Amstar, when a company official refused to hire a union worker as a compressor operator, the next day workers discovered that the diesel fuel line in the compressor had been cut, causing a fuel spill, resulting in cleanup and repair costs.

Racketeering conspiracy. With respect to the racketeering conviction only two predicate acts based on New York Penal Law extortion violations remained to support a racketeering violation under RICO. The union president argued that an Enmons like exception exists with respect to New York Penal Law and that he could not be convicted of extortion based on those predicate acts because his conduct was committed in pursuit of a lawful union objective.

The Second Circuit concluded that no Enmons like exception applies to the extortion provisions of the New York Penal Law. In U.S. v. Enmons, the Supreme Court concluded that the Hobbs Act applied only to threats and violence used to obtain an objective that was itself unlawful, thus limiting the scope of Hobbs Act extortion liability in labor disputes. The question then is whether the Enmon’s interpretation of the Hobbs Act informs the appeals court’s reading of the New York extortion statute, and whether a similar exception exists under that statute. The current New York Penal Law eliminated the word “wrongful” but also provides a separate exception for certain union activities.

Labor exemption. The elimination of “wrongful” renders the Supreme Court’s statutory interpretation of analysis in Enmons irrelevant in interpreting the current New York extortion statute. Moreover, the New York statute does not indicate an intent to exempt the use of threats of force by members of a labor union to achieve a legitimate union objective from the prohibitions of the statute.

Turning to New York’s revised definition of extortion and its exemption of certain union activities, the appeals court observed that the plain language of the New York extortion statute prohibits threats of violence, even in labor disputes. In addition, unlike the Hobbs Act, the protected activity is clearly defined and cannot be read to encompass threats to cause personal injury or damage property. Here, the government presented sufficient evidence to the jury that the union president “instilled in the victims a fear” that the union would cause personal injury and property damage in connection with the two construction projects. Accordingly, the union president’s challenge to the sufficiency of the predicate acts under the New York Penal Law failed.

Transferable property. Relying on the Supreme Court’s decision in Sekhar v. United States, the union president still argued that the property he was convicted of extorting was not transferable, so that the district court should have dismissed both counts. Thus, the appeals court addressed whether the reasoning of Sekhar required that it vacate the conviction for racketeering conspiracy based on New York Penal Law extortion predicate acts. Here, the appeals court concluded that Sekhar applies to the “generic” definition of extortion, but that the transferability of property requirement of Sekhar was satisfied with respect to the state law predicate acts.

The appeals court pointed out that the “generic” definition of extortion applicable to RICO state law extortion predicate acts and the Hobbs Act definition of extortion are nearly identical. In order for a state extortion offense to serve as a RICO predicate act, the property must be “transferable—that is capable of passing from one person to another.” Here, the appeals court concluded that the property of the contractors consisting of wages and benefits to be paid pursuant to labor contracts with the union at construction projects—was transferable. Accordingly, the union president’s conviction met the requirement that the targeted property was transferable.

Extortion conspiracy. However, the appeals court concluded that because the government presented insufficient evidence to support a Hobbs Act extortion conspiracy, the conviction of the union president on that charge was reversed. According to the union president, the government failed to establish that he agreed with others to extort wages for “unwanted, unnecessary, and superfluous labor.” Specifically, he contended that the government failed to prove his involvement in the Amstar incident.

In order for the Amstar incident to support the union president’s conviction, the government had to present evidence that he participated in, “expressly authorized,” or “subsequently ratified” attempts to extort wages for “unwanted, unnecessary, and superfluous labor.” In this instance, the appeals court agreed with the union president that the government’s evidence was not sufficient to connect him to the incident to support a Hobbs Act conspiracy conviction.

Similarly, the appeals court concluded that the union president’s conduct with respect to OSC and EarthTech did not constitute evidence of attempts to extort wages for “unwanted, unnecessary, and superfluous labor.” The record established that union members would have likely qualified for the work on the EarthTech and OSC projects. Accordingly, it concluded that the government presented insufficient evidence of the union president’s involvement in a conspiracy to extort wages for “unwanted, unnecessary, and superfluous labor” to support a conviction. Therefore a judgment of acquittal must be entered.