Service Employees International Union, Local 250 v. Colcord
Filed February 22, 2008, First District, Div. One
Cite as 2008 SOS 1222

Award for Breach of Fiduciary Duty Affirmed

Local 250 act for approximately 90,000 hospital and other health care workers in California.

On the other hand, herein Defendants Colcord, Rutherford, and Timothy Bonifay were employed by Local 250 as field representatives.

While still working for Local 250, defendants secretly plan a decertification campaign against the former. They formed a new union naming it National Emergency Medical Services Association (NEMSA). They filed their resignation before their plan was made known to Local 250.

As a consequence, Local 250 file a suit against defendants for:

1. Breach of fiduciary duty under the Labor Management Reporting and Disclosure Act (LMRDA) (29 U.S.C. § 501), and under common law;


2. Fraudulent concealment;


3. Unfair business practices; and


4. Misappropriation of trade secrets.

Local 250 also sought to recover the salaries paid to defendants while they were secretly organizing NEMSA together with the costs incurred in disputing the first of the three representation elections and punitive damages.

The trial court held Colcord and Rutherford liable for breach of fiduciary duty.

On appeal, the defendants contended that the trial court erred in awarding as compensatory damages:

• The cost of Colcord’s Local 250 salary and benefits during the period in which the breaches happened; and


• About $300,000 in campaign expenses Local 250 spent in its unsuccessful effort to prevent decertification.

The California Court of Appeal made the following pronouncements:

• affirmed the award for salary and benefits paid on the ground that present lawsuit involved no overtime pay claim against Local 250


• set aside the award of campaign costs because no substantial evidence sustained the finding that these were proximately caused by defendants’ tortious conduct


• remanded the case to allow the trial court, if it chooses to, to reconsider the amount of punitive damages awarded against Colcord in light of partial reversal of the compensatory damages award