Sodexo settles RICO case against SEIU

Sodexo Inc., announced today that it has agreed to drop its racketeering lawsuit against the Service Employees International Union, in exchange for the union ending its negative public campaign against the food services giant.

The announcement comes just over a month after a Virginia federal court judge denied the union's motion to dismiss the case.

The terms of the settlement are confidential, but both sides confirmed in statements today that the union will be ceasing its campaign. Sodexo and union officials also said that they "have affirmed their mutual commitment to the rights of Sodexo's employees to make free and informed choices about unionization."

Sodexo, a domestic subsidiary of French multinational corporation Sodexo S.A., first filed suit against the union in March in U.S. District court for the Eastern District of Virginia, alleging violations of the federal Racketeer Influenced and Corrupt Organizations Act. The company accused the union of organizing the negative publicity campaign in order to strong-arm access to Sodexo's non-union employees.

The union had accused Sodoxo of filing the lawsuit to distract attention from the company's purportedly anti-union behavior. U.S. District Judge Claude Hilton, in denying the union's motion to dismiss in late July, found that Sodexo had "stated a claim upon which relief can be had," but didn't elaborate further.

Neither party is talking about the settlement beyond written statements, citing the confidentiality agreement.

"With this settlement, we can begin the process of resuming a constructive relationship with the SEIU that is consistent with Sodexo's strong record of respecting our employees' rights under national labor laws with more than 30 other unions in the U.S," Robert Stern, Sodexo's general counsel, said in a statement.

Sodexo's lead counsel has been Hunton & Williams partner Gregory Robertson. University of Notre Dame Law School professor G. Robert Blakey, who helped draft the RICO statute, was also on Sodexo's legal team.

Tom Woodruff, the union's executive vice president, said in a statement that "with today's resolution in place, we will continue to serve our members and future members in the foodservice, cleaning, and security industries."

The union has been represented by Bernard DiMuro of DiMuro Ginsberg in Alexandira, Va.

(Published by BLT - September 15, 2011)