U.S. Supreme Court Says Employer Can Pursue State Law Claims against Union for Alleged Strike Misconduct

Last week, the Supreme Court of the United States in Glacier Nw., Inc. v. Int’l Bhd. of Teamsters Local Union No. 174 decided that the National Labor Relations Act (NLRA) did not preempt state tort law claims that an employer asserted against a union stemming from a union strike. The Court reversed a decision by the Supreme Court of the State of Washington and remanded the case to that court for further proceedings. The decision highlights that there are circumstances when an employer injured by a union strike can maintain state law claims against and recover damages from the union in court.

A Summary of the Decision in Glacier Nw.

Facts

The employer is a concrete company that delivers concrete to customers by trucks. The union represents the employer’s truck drivers for collective bargaining purposes. When contract negotiations for a successor collective-bargaining agreement broke down, the union called a strike, which damaged the employer. The union “allegedly designed the strike with the intent to sabotage Glacier’s property.”

Procedural History

The employer filed a lawsuit in state court against the union seeking to recover damages it sustained as a result of the strike. The complaint included the following allegations:

• The union knew that concrete is highly perishable and only can last a limited time, including in a truck’s rotating drum, before hardening.
• The union knew that if concrete were to harden in a truck’s drum, the concrete could not be used and could further damage the truck.
• With this knowledge, the union called a strike while the employer was in the midst of batching large quantities of concrete and delivering the concrete to its customers.
• As a result of the strike, some drivers abandoned the trucks filled with concrete.
• The employer took swift action to save the trucks from damage by building special bunkers to offload the concrete, but the hardened concrete was forever lost.
• The union’s intentional destruction of the concrete amounted to common law conversion and trespass to chattels.

The union filed a motion to dismiss the complaint arguing, among other things, lack of subject-matter jurisdiction. The state trial court dismissed the complaint, opining that the NLRA preempted the state tort law claims. The employer appealed to a state appellate court, which disagreed with the trial court and reversed the trial court’s decision. The union then appealed to the Washington Supreme Court, which agreed with the trial court and reversed the state appellate court. The employer appealed to the United States Supreme Court, which granted certiorari.

Decision

The Court decided that the NLRA did not preempt the employer’s state tort law claims, reversing the Washington Supreme Court.

Citing to San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), the Court acknowledged that the NLRA broadly preempts activity that is “arguably” subject to Sections 7 or 8 of the NLRA. Those sections of the statute describe protected employee rights and prohibited unfair labor practices, respectively. The Court further explained that the party relying on Garmon to assert NLRA preemption bears the burden of: (1) advancing an interpretation of the NLRA that is not plainly contrary to the statutory language and that has not been authoritatively rejected by the courts or the National Labor Relations Board (NLRB or “Board”); and (2) setting forth enough evidence to enable the court to find that the activity at issue is arguably subject to Sections 7 or 8 of the NLRA. If the party raising Garmon preemption meets its burden, a court must find NLRA preemption (subject to limited exceptions) and let the Board weigh-in. A court only may entertain litigation if the Board subsequently decides the activity is not protected or prohibited by the NLRA.

Looking to the case at hand, the Court explained that the NLRB has long held that the NLRA does not protect strikes if the strikers fail to take reasonable precautions to protect employer property from aggravated, foreseeable, and imminent danger due to a sudden work stoppage. Accepting the allegations in the employer’s complaint as true—which the state trial court was required to do—the Court concluded that the strike at issue was not protected. The union’s conduct jeopardized the safety of the employer’s trucks and destroyed the employer’s concrete. The Court noted, “the Union’s failure to take even minimal precautions illustrates its failure to fulfill its duty.”

Concurring and Dissenting Opinions

Although eight of the nine justices agreed that the NLRA did not preempt the employer’s state tort claims, there were two concurring opinions and one dissenting opinion. One concurring opinion foreshadowed that the Court may overhaul Garmon preemption in a future appropriate case. The other concurring opinion and the dissenting opinion foreshadowed that there could be a Glacier Nw. II.

• Justice Clarence Thomas issued one of the concurring opinions. Therein he stated that he wrote “separately to emphasize the oddity of Garmon’s broad pre-emption regime,” and that the Court “should carefully reexamine” Garmon pre-emption in a future appropriate case. The focus should be on the NLRA’s text and the question should be “whether federal and state law ‘are in logical contradiction’ such that it is impossible to comply with both,” according to Justice Thomas.
• In a dissent, Justice Ketanji Brown Jackson primarily focused on the fact the NLRB general counsel issued a complaint against the employer alleging that the strike at issue was protected under the NLRA after the Washington Supreme Court rendered its decision. She opined that the general counsel’s complaint by itself demonstrates that the strike was “arguably protected” and therefore that the NLRA preempted the employer’s state law claims. Justice Jackson noted that the majority opinion took no position regarding the NLRB complaint “leaving the question open for the Washington courts to decide on remand.” Justice Jackson also faulted the majority opinion on several other grounds. Among other things, she mentioned that she did not see anything “aggravated or even untoward” about the allegations that the drivers put the trucks “in harm’s way.”
• Justice Samuel Alito issued a concurring opinion that in part responded to Justice Jackson’s position regarding the NLRB complaint:

The Court wisely declines to address the argument on which Justice Jackson relies regarding the effect of the complaint before the NLRB on this litigation. That argument represents a striking extension of Garmon preemption, which, as the Court notes, is already an “unusual” doctrine. If the state court on remand dismiss this case on that ground, the decision, in my judgment, would be a good candidate for a quick return trip here.

Takeaway for Employers

• The NLRA protects the right to strike, but that right is subject to limitations.
• If your business experiences a strike, you should carefully document any financial losses, and/or business disruptions, along with any precautions the union took to avoid damage.
• Employers injured by strike misconduct should be sure to consider bringing state claims in court to remedy any damages they sustain as a result of the strike.
• Employers frequently rely on Garmon preemption to defeat state law claims raised by individuals in employment litigation stemming from activity that is “arguably” protected or prohibited by the NLRA. The Glacier Nw. decision does nothing to limit employers’ abilities to continue to rely on Garmon preemption in this context. The decision explained that the specific union conduct at issue was not protected by the NLRA.

The Court’s decision is available here.