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Supreme Court Hearing to Focus on Suits Over Damage From Strikes

Jan. 10, 2023, 10:15 AM

A Washington state concrete company will try to convince the US Supreme Court to let employers sue unions for alleged intentional destruction of property during strikes, a move that could chill organized labor’s use of a key tactic to gain leverage over management.

The justices will question lawyers during oral argument Tuesday about whether to overturn a Washington Supreme Court ruling that threw out Glacier Northwest Inc.’s tort claims against an International Brotherhood of Teamsters affiliate. The company accused the union of coordinating with truck drivers to time their strike so mixed concrete would harden and go to waste.

Permitting such lawsuits likely will trigger costly legal action against striking unions based on the economic consequences of their protests and spark legislation in conservative-leaning states to restrict union conduct during strikes, labor law observers said.

Although the National Labor Relations Act safeguards the right to strike, that right is not absolute. The Supreme Court previously has held that strikers can’t use violence, violate other federal laws, breach no-strike agreements, or pursue unlawful goals.

But when conduct is even arguably protected by the NLRA, state and local efforts to regulate that conduct—including state common-law claims—are preempted under the Supreme Court’s 1959 decision in San Diego Building Trades Council v. Garmon.

Glacier says Washington’s high court was wrong to find that federal labor law preempted the company’s claims against the union. The NLRA doesn’t protect a union’s scheme to intentionally destroy an employer’s property, making Garmon preemption inapplicable, the company said in a brief.

The Teamsters affiliate countered in its brief that the truck drivers’ conduct was at least arguably protected, considering that the National Labor Relations Board general counsel—who acts like a prosecutor in unfair labor practice cases—issued a complaint concluding that the strike was protected.

The union’s lawyer, Darin Dalmat of Barnard Iglitzin & Lavitt LLP, declined to comment. Glacier’s attorney, Noel Francisco of Jones Day, didn’t respond to requests for comment.

Administration Backs NLRB

The Biden administration will participate in oral argument, although it backs neither the company nor the union.

The NLRB’s longstanding approach toward property damage, the administration said in a brief, strikes a proper balance between workers’ right to strike and the tools employers have to resist the economic pressures of work stoppages, like their ability to lock out workers or hire replacements.

The board’s approach provides protection for routine economic damage from strikes, while stripping it when workers fail to take reasonable precautions to safeguard employer property from foreseeable danger caused by work stoppages, the administration said.

“Glacier’s proposed rule thus goes too far to the extent it covers any property damage that results from any strike, regardless of imminence,” the brief said.

Nevertheless, the administration said the Washington Supreme Court’s decision throwing out Glacier’s lawsuit should be overturned. Based on the company’s allegations—which, at the motion-to-dismiss stage, must be taken as true—the drivers didn’t take the necessary precautions to protect the cement from spoilage.

The NLRB complaint against the company does provide grounds for preempting Glacier’s lawsuit, but that wasn’t issued until after the state high court ruled, so the issue isn’t before the US Supreme Court, the government said.

Outside Interest

The case attracted more than a dozen amicus briefs from organized labor, business interests, legal advocacy groups, and academics.

Three groups of legal scholars—specializing in areas like administrative law, federal procedure, tort law, and labor law—filed separate briefs supporting the Teamsters affiliate. The professors warned that Glacier’s theory mischaracterizes tort law, threatens to disrupt federal preemption, and could have far-reaching consequences in labor-management relations.

“Strikes and lockouts involving industries ranging from journalism to professional sports are often timed to cause economic loss, including by rendering an employer’s goods valueless,” labor law scholars said in a brief. “Employers should not be free to convert these labor disputes into lawsuits.”

The US Chamber of Commerce, on the other hand, argued in a brief that Glacier’s claims fall under an existing exception to Garmon preemption for conduct that’s inextricably linked to “local feeling” that states should be allowed to regulate.

States have a compelling interest in “maintaining civil order by deterring and punishing violence and intentional property destruction” that fits the local-feeling exception, the Chamber said.

But a coalition of 15 states and the District of Columbia—all of whom have Democratic attorneys general—said the exception doesn’t apply to perishable products being spoiled in connection with an otherwise lawful strike.

“Although Amici States agree that the ‘local interest’ exception broadly protects the ability of states and localities to regulate critical sovereign interests, the interests implicated in Glacier’s suit do not meet the criteria for that exception,” the coalition said in a brief.

The case is Glacier Northwest, Inc. v. Int’l Bhd. of Teamsters Local Union No. 174, U.S., No. 21-1449, oral argument 1/10/23.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Laura D. Francis at lfrancis@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloomberglaw.com