Daughters of Charity sues union for Prime deal interference

Prime Healthcare Services has yet to decide whether to purchase six hospitals from the Daughters of Charity healthcare system for $843 million. But Daughters of Charity has not hesitated to sue one of the deal's biggest critics.

The not-for-profit Daughters of Charity has filed suit against the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), claiming that its critcism of and alleged interference with the deal has damaged its value and could cost it millions of dollars in the final sale, the San Francisco Chronicle reported. The SEIU-UHW has been one of Prime Healthcare's most vocal critics of the sale, claiming that Prime will slash services if it takes over the six hospitals in the Los Angeles and San Jose areas.

The suit claims that the union used the demands it made as leverage to extract concessions from Prime at other hospitals that it owns, according to the San Francisco Business Times. Also named in the lawsuit was Blue Wolf Capital Partners, another potential bidder for the hospital system, which was accused of leaking information about the bidding process to its advantage.

"The complaint filed...chronicles the persistent and unlawful efforts of SEIU-UHW and Blue Wolf Capital Partners throughout the sale process to improperly interfere with the sale," a Daughters of Charity representative told the Business Times. "The extortionate tactics employed by the defendants have caused real and substantial harm to DCHS and (it) intends to vigorously prosecute its claims."

The suit comes even as the labor union approved the conditions placed on the sale by California Attorney General Kamala Harris. The conditions include operating the hospitals for at least the next 10 years--double the time recommended by an independent advisory firm--and maintaining levels of charity care for that period of time as well. Prime would also have to keep existing Medicaid managed care contracts in place.

Prime's bid has split the labor unions representing workers at the Daughters of Charity hospitals, with the California Nurses Association supporting the deal while SEIU-UHW has been vigorously opposed.

Prime plans to make a decision as to whether to go forward with the deal in the next few days.

To learn more:
- read the San Francisco Chronicle article
- check out the San Francisco Business Times article