U.S. Supreme Court OKs State Court Tort Action for Labor Strike Damage

AJ Peters, Of Counsel

For nearly 65 years, employers that suffer property damage from strike activity have found state claims preempted by the National Labor Relations Act.  On June 1, 2023, the U.S. Supreme Court issued a decision that may change the legal landscape, opening the door for employers to sue labor unions in state court for failing to reasonably protect against property damage during a strike.

A Nearly Unanimous Ruling

On June 1, 2023, the U.S. Supreme Court issued an 8-1 decision in Glacier Northwest, Inc. v. Teamsters.[1]  Apart from a lone dissent from Justice Ketanji Brown Jackson, the remaining justices agreed that a local chapter of the International Brotherhood of Teamsters failed to take reasonable precautions to protect a concrete company’s property during a strike, and that the employer had the right to bring its action in state court.

Justice Barrett wrote the majority opinion, joined by Chief Justice Roberts and Justices Sotomayor, Kagan, and Kavanaugh.  Justice Thomas filed a concurring opinion, joined by Justice Gorsuch. Justice Alito also filed a concurring opinion, joined by Thomas and Gorsuch.

Perishable Products Destroyed by Work Stoppage

The underlying dispute involved a ready-mix concrete company in Washington, and the Teamsters Local 174 (the “Union”) acted as the company truck drivers’ exclusive bargaining representative.  The parties’ collective bargaining agreement expired, and the Union commenced a work stoppage.  As alleged in the pleadings, the Union intentionally structured the strike to inflict substantial property damage. 

Specifically, ready-mix concrete is a highly perishable product that remains temporarily useful by being rotated in drums on the back of a truck delivering the product to customers.  When the concrete hardens before it is poured into place, it becomes useless.  When concrete hardens inside of the rotating drum of a vehicle, it can cause severe damage to the equipment.

The Union in this case waited to initiate its work stoppage until a fleet of trucks had been filled with concrete batches for delivery to the company’s customers for the day.  At that point, the Union had 16 drivers return their trucks still full of concrete before walking off the job.  Glacier Northwest was able to avoid severe damage to its fleet of trucks by taking emergency measures to unload the concrete, but all of the concrete it had batched was lost.

Federal Labor Law Preemption of State Action Has Limits

When Glacier Northwest, Inc. sued the union in state court for tort damages to its property, its claims were dismissed based on San Diego Building Trades Council v. Garmon.[2]  While a federal law generally preempts state law when the two conflict, the doctrine of Garmon preemption has broadly excluded state law claims in traditional labor law for decades by holding that state law claims are preempted even when they only arguably conflict with the National Labor Relations Act (NLRA).[3]  Under Garmon preemption, “the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board.”[4]  

The NLRA broadly protects the right of employees to engage in collective action, such as strikes.  However, 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. 

The Supreme Court’s decision in Glacier Northwest, Inc. v. Teamsters opens the door to state causes of action to fill what many employers have seen as a void in federal enforcement against labor unions that fail to take the “reasonable precautions” to prevent damage to an employer’s property.  In the case of Glacier Northwest, Inc. v. Teamsters, that damage was the foreseeable and imminent danger of walking off the job with concrete mixer trucks full of perishable concrete.

Takeaways for Employers and Unions

The aftermath of Glacier Northwest, Inc. v. Teamsters remains to be seen.  However, employers will now be able to consider state law remedies for certain strike damages the NLRB has largely failed to protect.  Unions, in turn, may become less enthusiastic about calling strikes when the work stoppage might cost employers damage and the loss of property, thus exposing the union to lawsuits. 

[1] 21-1449 Glacier Northwest, Inc. v. Teamsters (06/01/2023) (supremecourt.gov).

[2] 359 U.S. 236 (1959).

[3]29 U.S.C. §§ 151-169.

[4] Garmon, 359 U.S. at 245.