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The following facts are taken from the record. Plaintiff,Lowe Excavating Company, is an Illinois corporation engaged inexcavating and site preparation services since 1969. Marshall Lowewas the president of Lowe at the time of the incidents at issue. Defendant International Union of Operating Engineers Local No. 150(the Union) is a labor organization doing business in McHenryCounty. Defendant Colin "Robert" Darling was a business agentemployed by the Union at the time of the incidents at issue.

On February 15, 1988, the Union began picketing at a Loweproject site, known as Ballashire Hall, with signs stating:

LOWE EXCAVATING DOES NOT PAY THE PREVAILING

WAGES AND ECONOMIC BENEFITS FOR

OPERATING ENGINEERS WHICH ARE

STANDARD IN THIS AREA

OUR DISPUTE CONCERNS ONLY SUBSTANDARD

WAGES AND BENEFITS PAID BY THIS COMPANY

LOCAL 150

International Union of

Operating Engineers, AFL-CIO"

On February 17, 1988, Lowe filed a complaint seeking atemporary restraining order (TRO), preliminary and permanentinjunctions, and damages. The following day, the Union filed apetition for removal to the United States District Court, arguingthat Lowe's claim seeking an injunctive relief was preempted byfederal law. On June 10, 1988, the United States District Courtfor the Northern District of Illinois denied the Union's petitionand remanded the case to the state trial court, stating that"Lowe's complaint does not on its face contain a federal claim."

On June 30, 1988, the trial court enjoined the Union frompicketing Lowe in McHenry County until the court ruled on Lowe'srequest for a preliminary injunction. On August 11, 1988, thetrial court dismissed Lowe's second amended complaint based on theUnion's claim that the court lacked subject matter jurisdiction dueto federal preemption. The court granted Lowe leave to file athird amended complaint.

On September 28, 1988, the Union resumed picketing. Thefollowing day, Lowe filed a third amended complaint seeking atemporary restraining order, preliminary and permanent injunctions,and damages. Lowe also filed a motion for a temporary restrainingorder, preliminary injunctions, and the reconsideration of thedismissal of the second amended complaint based on the lack ofsubject matter jurisdiction. The court again enjoined the Unionfrom picketing Lowe until the court's ruling on Lowe's request fora preliminary injunction. On October 6, 1988, the Union filed amotion to dismiss this third amended complaint, again assertingthat, based on federal preemption, the trial court lacked subjectmatter jurisdiction.

On October 11, 1988, the court partially granted Lowe's motionfor a temporary restraining order enjoining the Union from"picketing or otherwise disseminating the fact that Lowe is non-union." The court also denied the Union's motion to dismiss Lowe'sthird amended complaint and denied Lowe's "request for preliminaryinjunctive relief relating to area standards, in reckless disregardfor the truth," based on federal preemption grounds. Lowe filed aninterlocutory appeal of this decision.

On March 3, 1989, this court reversed the trial court'sdecision and remanded the case for a hearing. Lowe Excavating Co.v. International Union of Operating Engineers Local No. 150, 180Ill. App. 3d 39 (1989).

The trial on Lowe's third amended complaint began in April2000. The four claims proceeding to trial against the Union andColin Darling, as an individual, were count II, alleging tortiousinterference with contractual relationship; count IV, allegingtortious interference with prospective economic advantage; count V,alleging trade libel; and count VI, alleging negligent interferencewith contract.

At the trial, Darling testified that late in the summer orearly in the fall of 1987 he spoke with two Lowe employees,Hartzell Zimmerman and Pasqual Gebbia. Zimmerman and Gebbia toldDarling what they were making at the time and what benefits theyreceived. Darling stated that the men showed him their pay stubsand that these were the only pay stubs Darling saw. However,during a deposition in 1994, Darling stated that he had not seenpay stubs. Darling explained at trial that his memory was betterat trial in April 2000 than it was when he gave his deposition.

Darling also testified that in February 1988 the class one(top wage) under the Union's master collective bargaining agreementwas $19.40 an hour to be increased to $20.10 an hour on June 1,1988, and the class two wage was $18.85 an hour. These were thewages that were appropriate for the Ballashire Hall project. Thecontribution to various fringe benefit funds was $2.20 an hour. Also, the master agreement provided that no more than 1 apprenticewas permitted on a job with less than 7 journeymen, 2 apprenticesfor between 7 and 13 journeymen, and 3 apprentices for between 13and 22 journeymen.

In October 1987 the Union initiated efforts to unionize Lowe'semployees. Marshall Lowe arranged for representatives of the Unionto met with Lowe employees. At the meetings, the Union and Lowepresented the employees with comparisons of their respective wagesand benefits.

Darling testified that, during a meeting with Marshall Lowe inDecember 1987 or January 1988, Marshall provided several documents,including Lowe's 401(k) pension plan, profit-sharing plan, andpayroll information. Darling gave these documents to the Union'sfund administrator, Larry Bushmaker. Darling talked to Unionpresident Bill Dugan about Zimmerman's and Gebbia's claims thatthey were not getting area standard wages. Darling never askedanyone to investigate Lowe's wages and benefits paid after thesummer of 1987. Early in 1988 Dugan and his assistant, BillAnderson, and Darling decided that the Union should picket Lowe. Darling stated that, after the initial pickets began, Marshall toldDarling that Lowe had a federally funded project but would not tellDarling where the project was.

Marshall Lowe testified that on February 12, 1988, he sent theUnion's fund administrator, Bushmaker, a letter notifying Bushmakerthat another employee meeting was scheduled for March 12, 1988, sothat Bushmaker could explain the Union's fringe benefits to Lowe'semployees. However, Bushmaker never responded to this letter, andthe meeting did not take place.

On February 12, 1988, Lowe was read a mailgram from the Unionover the phone, which stated in part:

"Local 150, International Union of Operating Engineers isinformed that your company is currently performingconstruction work at Canterbury Place Retirement Community. Local 150 has attempted to make careful investigation of yourcompany's policies regarding the payment of area standards toindividuals performing construction work at this project. Wehave determined that the area standards for the operatingengineers are not being met at this project. If ourinformation regarding this fact is incorrect, please advise usimmediately."

Darling testified that after the Union sends notice that itintends to picket it waits 48 hours so that the contractor canprove that it pays prevailing wages. However, Darling stated thatthis requires "solid evidence" like "an audit" before it willdecide not to picket.

In response to the Union's mailgram, Marshall Lowe sent theUnion a mailgram on February 15, 1988, stating that "we are payingthe area standards and in fact are paying higher wages and fringesto our men." Marshall Lowe was shocked by the Union's mailgrambecause Marshall had been congenial to the Union, providing itaccess to his employees and their telephone numbers. Further,Marshall had told Darling what he was paying his employees.

Nevertheless, at 6 a.m. on February 15, 1988, the Union beganpicketing at Lowe's project at Ballashire Hall. The BallashireHall project involved the construction of a nursing home as part ofa larger retirement community project called Canterbury. FAMCO wasthe general contractor for both projects.

Ballashire Hall was a federally funded construction project ofthe federal Department of Housing and Urban Development (HUD).Employers on HUD projects are required by federal law to pay theiremployees the prevailing area wage and benefits established by theUnited States Secretary of Labor. 40 U.S.C.A.