SCOTUS Issues Decision Allowing State Court Lawsuit Against Union for Property Damage Caused During Labor Dispute
As we previously reported here, at the beginning of 2023, the Supreme Court heard oral argument on one of the most anticipated labor cases on the high court’s docket in decades to address whether the National Labor Relations Act (“NLRA” or the “Act”) preempts state court lawsuits for tort damages caused by unions during strikes. On June 1, 2023, the Supreme Court issued its decision in Glacier Northwest, Inc., dba Calportland v. International Brotherhood of Teamsters Local Union No. 174, U.S., No. 21 – 1449, reversing the Washington Supreme Court’s decision and held that the employer’s state law tort claims were not preempted by the Act.
The case centers around property damage Glacier, a concrete business, suffered during a strike led by drivers who are represented by Teamsters Local 174 (the “Union”) after contract negotiations had broken down. In August 2017, the drivers reported for work and had the delivery trucks filled with custom ready-mix batch concrete, only to walk off the job, leaving at least 16 delivery trucks filled with the ready-mix concrete. This subjected the trucks to potential damage and thus forced Glacier to dump all the concrete to avoid damage to the delivery trucks, causing a loss of product.
The majority opinion authored by Justice Coney Barrett and joined by Chief Justice Roberts, and Justices Sotomayor, Kagan, and Kavanaugh determined that the Union had not satisfied its burden as the party asserting preemption under the Act. The Union’s preemption argument satisfied the first test of advancing “an interpretation of the NLRA that is not plainly contrary to its language and that has not been ‘authoritatively rejected’ by the courts or the Board,” but failed the second test of presenting “enough evidence to enable the court to find that” the NLRA arguably protects the drivers’ conduct.
Relying on the limitation on the right to strike set forth in Bethany Medical Center, 328 NLRB 1094 (1999), the majority concluded that the Union failed to take reasonable precautions to protect Glacier’s property from foreseeable, aggravated, and imminent danger due to their sudden cessation of work. The Court highlighted that the Union knew that concrete is a highly perishable product and that the Union had knowledge that Glacier would not have batched and prepared to pour in trucks unless the drivers reported for duty and gave the impression they were going to deliver the concrete. By pretending as though the drivers were going to deliver the concrete and then walking off the job after the concrete was mixed and poured in the trucks, the drivers not only destroyed the concrete, but placed Glacier’s trucks at risk for considerable damage as the loss of a perishable product was foreseeable. The Union had executed the strike in a manner designed to compromise Glacier’s property and to waste the concrete it had prepared that day, thus the action lost the protection of the NLRA and the Washington State Supreme Court had erred. The Court reversed and remanded for further proceedings not inconsistent with its opinion.
Justice Thomas authored an opinion concurring in the judgment and was joined by Justice Gorsuch. Thomas’s concurring opinion addressed how Garmon preemption extends beyond standard preemption doctrine and effectively leaves states without an ability to address wrongful conduct in the labor field or issue effective remedies in the labor context under state law. To Thomas, the majority opinion underscores the uniqueness of Garmon preemption and relied on NLRB precedent to determine whether or not the state court possesses the power to adjudicate a state-law tort claim related to a labor issue.
Justice Alito authored an opinion concurring in the judgment and was joined by Justice Thomas and Justice Gorsuch. Alito’s concurrence emphasizes the limitations on the NLRA’s protection of the right to strike and that such protection clearly does not extend to acts of trespass or violence against employer property, which the Union engaged in here.
Justice Jackson authored a solo dissenting opinion, asserting that based on Garmon preemption, the Supreme Court should not have issued a decision until the Board made a determination in the pending complaint before it filed by the General Counsel on whether the Union’s strike conduct was lawful or even protected by the NLRA. Justice Jackson believed the majority misapplied Board precedent in a manner that threatens the development of labor law and erodes employees’ right to strike by impinging on the Board’s role of adjudicating labor disputes and resolving whether conduct is lawful or protected by the NLRA. Jackson suggested that the correct course of action pursuant to Garmon would have been to vacate the Washington Supreme Court’s ruling and remand with directions to dismiss Glacier’s complaint without prejudice or stay the proceedings in light of the General Counsel’s complaint.
While the majority opinion is fact specific and does not create a new standard altering whether all state law tort claims for property damage as a result of a labor dispute are not preempted by the NLRA, it does highlight that some consideration should be given to what recourse employers can seek to address the property damage they may suffer as a result of a union’s intentional conduct.
