Unions have certain free speech rights, just like workers and management.  But a case decided this month is a startling lesson that the limits of such free speech include false and malicious allegations designed to harm the targeted employer.

A Texas jury walloped the Service Employees International Union (SEIU) with a $5.3 million verdict for spreading false and harmful statements about the company, after the business refused to recognize the union without a secret ballot election.  Lawyers for the company said the SEIU used “an intimidating campaign of extortion to try to run the janitorial service out of business,” and targeted the company’s clients with “faked tales of labor complaints,” costing the company millions of dollars in business.  The law recognizes that type of conduct as defamation and tortious interference with contract.  And when that happens, the speaker may be liable for the damages caused.  We assume the SEIU will appeal the ruling.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.