No Labor of Love at Medco

Just when Medco (MHS Quote) finally cured a stubborn legal headache, it's starting to feel serious labor pains.

The giant pharmacy-benefit manager announced a long-awaited settlement with the federal government when posting strong first-quarter results on Friday. The PBM also insisted that it continues to operate normally despite a labor dispute that, union officials claim, could threaten a big chunk of the company's business.

"The threat is going to turn into reality," Jack Hammond, an international representative for United Steelworkers, told TheStreet.com on Friday. "Let's just put it this way. Union clients represent 25% of Medco's business -- and a lot of those companies are very friendly with us." ...