Teamsters strike
defamation award
reversed by court

Ruling throws out nearly
$1 million in damages

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By Russ Lynch
rlynch@starbulletin.com

A federal appeals court has ruled the Hawaii Teamsters Union does not have to pay more than $1 million in damages to Young Laundry & Drycleaning and its owner Michael Drace.

The panel overturned an earlier federal court ruling awarding the damages the laundry said it incurred in a labor dispute in 1998 and 1999.

The union's president, Mel Kahele, did not defame the company and Drace when he said during labor talks that the laundry was "making money" while Drace was saying it was losing money, the appeals court ruled.

There was no defamation because Kahele's comments could not be proven true of false, he was making them as a "call to arms" in a labor dispute not an assertion of facts and that the words "making money" were unclear.

"Kahele's statements are not defamatory and therefore they are fully protected by federal labor law," the appeals court said.

The decision also said freedom of speech "is an essential component of the labor-management relationship."

The Ninth Circuit Court of Appeals in San Francisco said nobody could tell whether Kahele meant profits or revenues or some other number.

The court ruled the union does not have to pay $100,000 in damages that the lower court awarded Drace because of the "injury to his reputation" and "emotional distress."

The court also ruled the Teamsters do not have to pay the $958,000 awarded the laundry last year by U.S. District Judge Helen Gillmore for economic harm that resulted from the so-called defamatory statements.