Supreme Court: Companies Can Sue Unions for Property Damage Caused During a Strike

Miles & Stockbridge P.C.

The Supreme Court came down hard on unions last month when it held that a company may bring state law tort claims against a union for property damage caused during a strike. The Court held that the federal law governing labor disputes – the National Labor Relations Act (“NLRA” or the “Act”) – did not preempt the company’s state law claims.

In Glacier Northwest, Inc. v. International Brotherhood of Teamsters Local Union No. 174, 143 S.Ct. 1404, a concrete company brought a tort action against the union representing its truck drivers in Washington state, alleging that the union devised a strike with the intent to sabotage the company’s primary product – its concrete. The state court dismissed the company’s claims on the ground that they were preempted by the NLRA. The company appealed, and the Supreme Court granted certiorari.

What is Garmon Preemption?

As a general rule, when federal and state laws conflict, federal law trumps state law. However, in San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), the Supreme Court held that if a federal or state court is considering activity that is “arguably subject” to the NLRA, it must defer to the exclusive jurisdiction of the National Labor Relations Board (“NLRB” or the “Board”), the agency that Congress conferred with the expertise to decide labor disputes.

The Glacier Decision

In Glacier, the Court concluded, in an 8-1 vote, that the concrete company’s state court action against the union was not preempted by Garmon because the strikers’ activity was not arguably subject to the NLRA. In reaching this conclusion, the Court recognized the Act’s limitations on the right to strike – namely, the requirement that strikers take reasonable precautions to protect their employer’s property from foreseeable, imminent danger that may result from a sudden cessation of work. Justice Amy Coney Barrett, writing for the majority, explained that Glacier’s truck drivers did not take reasonable precautions to protect the company’s concrete before they went on strike. For example, the union could have initiated the strike before the trucks were full of wet concrete, which is highly perishable and susceptible to hardening if kept in the rotating drum for too long.

The majority opinion also distinguished Glacier from other Board decisions where strikes were protected despite the fact that they created a risk of loss to the employers’ property (in those cases, poultry, milk and cheese were the compromised products). The Glacier majority further reasoned that the striking truck drivers did not merely walk off the job where there was a foreseeable risk of concrete spoliation, but rather they “prompted the creation of the perishable product” by reporting to work and “pretending as if they would deliver the concrete.” By intentionally timing the strike after the wet concrete had been mixed and loaded into the trucks, the majority concluded that the strikers failed to take reasonable precautions to avoid destruction of the company’s property, as required by the Act, and therefore, the Act did not “arguably protect” the conduct. The Court reversed and remanded the case to state court.

Jackson’s Dissent

Justice Ketanji Brown Jackson, the sole dissenter, argued that the majority overstepped. Specifically, she asserted that the union’s conduct was at least arguably protected by the Act, and therefore the Court should have deferred the case to the NLRB because Garmon preempted the Court’s consideration. By considering whether the strikers’ conduct was arguably protected in the first instance, Jackson said the majority “veer[ed] into the Board’s assigned territory,” adding “workers are not indentured servants, bound to continue laboring until any planned work stoppage would be as painless as possible for their master. They are employees whose collective and peaceful decision to withhold their labor is protected by the NLRA even if economic injury results.”

Employer Takeaways

Glacier is a welcome decision for employers concerned about property damage during a strike. However, employers should recognize that mere loss of perishable products – even where foreseeable – may not render a strike unlawful or unprotected. The Court in Glacier also left the door open to considering, in similar future cases, whether Garmon preemption is appropriate, noting that a proper preemption inquiry must focus on the NLRA’s text and ask whether federal and state law “are in logical contradiction” such that it is impossible to comply with both.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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