Legal Updates

Supreme Court Upholds Employers' Right To Sue Unions For Strike-Related Damages

On June 1, 2023, the U.S. Supreme Court, in Glacier Northwest, Inc. v. Int’l Bhd. of Teamsters Local Union No. 174, delivered a blow to organized labor by making it easier for employers to sue unions for certain strike-related damages.

In an 8-1 ruling, the Court found that the National Labor Relations Act (“NLRA”) does not preempt an employer’s state law tort claim arising out of property damage sustained by the employer as a direct result of a strike. The decision expands the circumstances under which a union can be sued under state law for actions generally governed by the NLRA.

Background

Glacier Northwest (“Glacier”) sells ready-mix concrete to customers in Washington State. Concrete is highly perishable – it begins to harden almost immediately once at rest. Concrete can be preserved for a limited time if stored in a truck with a rotating drum. However, if concrete remains in the drum for too long, the concrete will harden and cause significant damage to the truck.

Teamsters Local Union No. 174 (the “Union”) serves as the exclusive bargaining agent for Glacier’s truck drivers. In the summer of 2017, the collective bargaining agreement between Glacier and the Union expired, and efforts to negotiate a new agreement were stalled. According to Glacier, on the morning of August 11, 2017, the Union signaled a work stoppage at a time when Glacier was mixing and delivering a substantial amount of concrete. Several drivers returned from deliveries and parked their trucks fully loaded with concrete, while other drivers simply abandoned their trucks without notice to Glacier.

Glacier faced a real emergency as a result of the abrupt work stoppage. It could not leave mixed concrete in its trucks, as the concrete’s inevitable hardening would severely damage the trucks. Nor could Glacier simply dump the concrete, because concrete contains environmentally sensitive chemicals. Instead, over the course of five hours, non-striking employees built special bunkers and offloaded the concrete, and Glacier managed to prevent damage to its trucks. However, the concrete dumped into the bunkers quickly hardened and was a complete loss.

Glacier’s Lawsuit

Glacier sued the Union in Washington state court, claiming that the Union had intentionally destroyed Glacier’s concrete and that this conduct constituted common law conversion and trespass to chattels.

The Union moved to dismiss Glacier’s claims on the basis that the NLRA preempted them. It is black-letter law that federal law preempts state law when the two conflict. In the labor context, as set forth in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959), the NLRA preempts state law even when the two only “arguably” conflict. Based on the Garmon preemption doctrine, the Union claimed that the NLRA at least “arguably” protected the concrete drivers’ conduct, thereby precluding Glacier’s state-law claims.

The trial court ruled in the Union’s favor. After the appellate court reversed, the Washington Supreme Court reinstated the lower court’s decision. The state Supreme Court held that “the NLRA preempts Glacier’s tort claims related to the loss of its concrete product because the loss was incidental to a strike arguably protected by federal law.” The U.S. Supreme Court granted certiorari and agreed to hear the case.

Supreme Court’s Decision

Justice Amy Coney Barrett delivered the Court’s opinion. At the outset, the Court noted the following: (i) the right to strike is not absolute, and (ii) 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. In this context, the Court considered whether the NLRA “arguably” protected the strikers’ conduct.

The Union argued that the NLRA’s protection of the right to strike should “be given a generous interpretation.” A strike, the Union argued, constitutes “a concerted stoppage of work,” conduct protected by the NLRA. The Court did not dispute the Union’s right to strike, but noted that such rights are not limitless and that the Union had an obligation to take steps to protect Glacier’s property “from foreseeable imminent danger due to a sudden cessation of work.”

The Union also argued that its workers could not be found to have forfeited NLRA protection merely because a perishable product was at issue. The Union relied on prior cases where strikers’ conduct was protected in other instances involving perishable goods, (e.g., poultry, milk, cheese), arguing that “[i]f the mere risk of spoilage is enough to render a strike illegal, … then workers who deal with perishable goods will have no meaningful right to strike.” The Court distinguished the facts of those cases, noting that the Union had actually caused the concrete to become perishable: “[B]y reporting for duty and pretending as if they would deliver the concrete, the drivers prompted the creation of the perishable product.”

The Union maintained that the Court should not find the timing of the strike to be a factor because “workers are not required to time their strikes to minimize economic harm to the employer … and [] the NLRA does not impose a legal requirement that workers give a specific notice of a strike’s timing.” The Court, again, noted that the timing of the strike, shortly after the drivers had loaded large amounts of wet concrete into delivery trucks, “strongly suggests that [the Union] failed to take reasonable precautions to avoid foreseeable, aggravated, and imminent harm to Glacier’s property.”

The Supreme Court found that the Union knew that concrete is highly perishable and that it can last for only a limited time in a delivery truck’s rotating drum. The Court also found that the Union knew that concrete left to harden in a truck’s drum causes significant damage to the truck. The Union nevertheless commenced the strike when Glacier was in the midst of mixing concrete for delivery to customers. “Predictably, the company’s concrete was destroyed as a result.”

In applying its longstanding Garmon preemption doctrine, the Court considered whether the Union had demonstrated whether the NLRA “arguably” protected the drivers’ conduct. The Court held that it did not. The Court noted that the Union had failed to take even minimal precautions to safeguard Glacier’s property: “Indeed, far from taking reasonable precautions to mitigate foreseeable danger to Glacier’s property, the Union executed the strike in a manner designed to compromise the safety of Glacier’s trucks and destroy its concrete.” Under these circumstances, the Court concluded, the Union’s conduct was not “arguably protected” by the NLRA.

Additional Commentary

In a concurring opinion, Justices Clarence Thomas and Neil Gorsuch took the issue one step further and stated that they were willing to reconsider the NLRA’s broad preemption doctrine. Justice Thomas opined that “in an appropriate case, we should carefully examine whether the law supports Garmon’s ‘unusual’ preemption regime.” Justice Samuel Alito authored a separate concurring opinion, stating that “Garmon preemption does not prevent States from imposing liability on employees who intentionally destroy their employer’s property.”

Justice Ketanji Brown Jackson wrote a 27-page dissent, opining that “[t]he Court’s ruling is likely to cause considerable confusion among the lower courts about what Garmon requires,” and that “any such confusion … risks erosion of the right to strike.”

Implications

The Glacier Northwest decision sends an important message to both unions and employers. Unions may think twice about the timing of strikes and be less likely to call a strike that has the potential for measurable, physical damages. Correlatively, employers may be more likely to go to court to seek compensation for physical damages directly caused by a strike.

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If you have questions about the Supreme Court’s Glacier Northwest decision or any other union-related issue, please feel free to reach out to one of our experienced labor attorneys.