United States: Supreme Court Decision Cements Employers' Ability To Sue For Strike Destruction

In an 8-1 decision announced Thursday in Glacier Northwest, Inc. v. Int'l Bhd. of Teamsters Local Union No. 174, U.S., No. 21-1449, 6/1/23, the Supreme Court ruled that an employer's tort claims alleging that a union intentionally destroyed a company's property during a labor dispute were not preempted by the National Labor Relations Act ("NLRA").

Background

The employer in this case, Glacier Northwest, delivers highly perishable concrete to its customers, which it transports in trucks using rotating drums to prevent the concrete from hardening during transit. When the concrete hardens, not only is it unusable by the intended recipient, but it can also cause significant damage to the truck carrying it. There, the company's truck drivers are members of the International Brotherhood of Teamsters Local Union No. 174. When the collective bargaining agreement between Glacier and the Union expired, the Union called for a work stoppage on a morning it knew the company was in the midst of mixing and delivering substantial amounts of concrete and instructed drivers to ignore Glacier's instructions to finish deliveries in progress. As a result, all of the concrete mixed that day hardened, rendering it useless. The company sued the Union for damages in state court.

Preemption Under the NLRA

The Union moved to dismiss Glacier's tort claims on the ground that they are preempted by the NLRA. Labor law preemption is even more extensive than that under traditional federal preemption doctrine, which provides that a federal law will generally preempt a state law when the two conflict. In the labor context, however, as set out in San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), state regulation or action is preempted if it covers activity even arguably protected or prohibited by the NLRA. Garmon preemption, as it's called, is intended to preclude state interference with the National Labor Relations Board's interpretation and enforcement of the NLRA. It forbids states to regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits.

State Court Decision

The Union argued that the NLRA arguably protected the driver's conduct, meaning the state could not entertain a tort suit for damages arising from the strike's consequences. The Washington Supreme Court agreed, writing that "the NLRA preempts Glacier's tort claims related to the loss of its concrete product because that loss was incidental to a strike arguably protected by federal law."

Supreme Court Decision

The Supreme Court reversed, holding that the NLRA did not preempt Glacier's tort claims. Key to the court's reasoning was the proposition that the NLRA's protection of the right to strike is not absolute. For instance, the NLRA does not shield strikers who fail to take "reasonable precautions" to protect their employer's property from foreseeable, aggravated, and imminent danger due to the sudden cessation of work. Bethany Medical Center, 328 NLRB 1094 (1999). The Court concluded, accepting the complaint's allegations as true, that the Union did not take reasonable precautions to protect Glacier's property. Therefore, the strike activity was not protected, and the Union did not meet its burden as the party asserting preemption to demonstrate that the NLRA arguably protected the drivers' conduct.

Takeaways

The decision itself is narrow, but its implications are important. In practice, the decision means that, when engaging in a work stoppage, a union must take reasonable precautions to protect employer property or risk being liable in state court for the damage such strike causes. If employer property is damaged during a work stoppage, and the union did not take reasonable precautions to avoid that damage, then the employer may overcome preemption arguments and sue in state court.

This is a clear win for management, as employers will have greater latitude to sue for damages when work stoppages cause damage to company property.

Supreme Court Decision Cements Employers' Ability To Sue For Strike Destruction

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