The Continuing Saga of Lowe Excavating
This month the Second District Appellate Court in Elgin, Illinois again ruled in the protracted litigation between Lowe Excavating and Local 150 Operating Engineers. The opinion can be accessed at the court website. Lowe Excavating Co. v. International Union of Operating Engineers Local No. 150
The issue this time around was whether the trial court had properly awarded Lowe $525,000 in punitive damages attributable to claims for trade libel. Initially it had awarded $325,000 but after a post-trial motion for attorneys fees the court increased the amount.
The appeals court has cut this amount to $325,000.
This case reminds us that employers can sue unions in state court for intentional torts, and are not required to take their claims to the National Labor Relations Board or the federal courts. Lowe commenced litigation in McHenry County – presumably to get a more sympathetic trier of fact – and has been fighting with the “150” for fifteen years over the harm it claims it has suffered.
Back in February 1988 the union picketed one of Lowe’s jobsites, and the picket signs stated:
NOTICE TO THE PUBLIC
LOWE EXCAVATING ODES NOT PAY THE PREVAILING WAGES
AND ECONOMIC BENEFITS FOR OPERATING ENGINEERS WHICH ARE STANDARD IN THE AREA
OUR DISPUTE CONCERNS ONLY SUBSTANDARD
WAGES AND BENEFITS PAID BY THIS COMPANY
International Union of Operating Engineers
Because these claims were false, and the union had never bothered to check to see if Lowe in fact was paying prevailing wages, the court found that the union had acted with malice and defamed Lowe. As a result of the union’s campaign Lowe, a relatively small company that was economically vulnerable already, lost contracts and was removed from construction jobs. FAMCO, the general contractor on the job in February 1988, terminated the subcontract and refused to do business with Lowe for a time.
But the court considered the ratio of the punitive damages ($525,000) to the actual damages suffered by Lowe ($4,280) and disagreed with the three digit range ratio the trial court had adopted, 115 to 1, to arrive at the amount of punitive damages. Hence the appeals court knocked the amount back to the original figure the trial court issued.