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Supreme Court Hints at Green Lighting Suits Over Strike Damage

Jan. 10, 2023, 9:10 PM

Both conservative and liberal US Supreme Court justices hinted that a forthcoming ruling would deal a blow to organized labor by allowing employers to sue unions in state court for alleged intentional destruction of property during a strike.

During oral argument Tuesday, the justices expressed skepticism about why federal labor law should treat allegations of intentional destruction of employer property during a strike the same as incidental economic harm from labor protests.

Chief Justice John Roberts pointed to the “difference between milk spoiling and killing the cow,” wondering why alleged vandalism should be analyzed under the National Labor Relations Board’s legal test for deciding whether labor law protects strike conduct resulting in economic damage.

Justice Ketanji Brown Jackson posed a similar question.

“So in terms of the logic of this, shouldn’t the line be drawn around the intent, in the sense of, is the union engaging in conduct for the purpose of destroying the property of the factory, or is the union just striking and if some of the property gets damaged—that’s incidental and that should be protected?” she asked.

The high court’s consideration of litigation over strike conduct comes amid a period of heightened labor protests, with strike activity in 2022 reaching its highest level in nearly two decades. A ruling in favor of employers’ ability to sue could open up unions to costly lawsuits based on the economic consequences of those strikes.

The case stems from cement supplier Glacier Northwest Inc.’s attempt to revive its 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.

The Washington Supreme Court dismissed the suit, holding that it was preempted by the National Labor Relations Act per the US Supreme Court’s 1959 decision in San Diego Building Trades Council v. Garmon. That doctrine, which is based on the NLRB ensuring uniformity in federal labor law, blocks state regulation of conduct that’s arguably protected by the NLRA.

Law Versus Fact

While the Supreme Court’s three liberal justices were active during oral argument, the conservative majority was relatively quiet. Justices Samuel Alito and Brett Kavanaugh didn’t ask a single question.

Glacier’s lawyer, Noel Francisco of Jones Day, told the justices that it’s an “extraordinary step” to oust state court jurisdiction over tort claims against alleged strike conduct that isn’t protected by federal labor law. The Supreme Court didn’t create Garmon preemption to override a state court’s traditional fact-finding role, said Francisco, who served as the solicitor general during the Trump administration.

Justice Elena Kagan criticized Francisco’s “sharp distinction” between questions of labor law, which go before the NLRB, and questions of fact, which state courts have primacy over. Most critical questions mix legal and factual issues, and that’s where the NLRB’s expertise becomes that much more important, she said.

The board has heard numerous disputes involving strikes “and can fit a case like this into a broader map of strike conduct and what’s protected and what’s not,” Kagan said.

Litigants can take advantage of the NLRB’s expertise when the facts show that conduct is arguably protected, Francisco said. The case then goes to the board to decide whether it’s actually protected, he said.

But the state court shouldn’t consider evidence that the striking workers’ actions were arguably protected until the summary judgment or trial stage of the case, even if the NLRB general counsel’s office issues a complaint saying the conduct was protected, he added.

Anomalous Delay

Justice Department lawyer Vivek Suri agreed with Glacier that the Washington high court should be reversed, but argued in favor of keeping the current legal framework for analyzing strike conduct.

The NLRB’s standard strips labor law safeguards if strikers fail to take reasonable precautions to avoid foreseeable, imminent damage to property.

Responding to questioning from Justice Neil Gorsuch, Suri said parties like the Teamsters affiliate in the current case can ask state courts to stay proceedings to allow the NLRB to examine the allegations at issue.

But Justice Amy Coney Barrett said she was concerned about delays, considering that the NLRB general counsel took four years to issue a complaint against Glacier.

That delay was an anomaly stemming from a separate company allegation that needed to be resolved in state court, Suri said. Complaints are normally issued four to five months after charges are filed, he said.

The union’s lawyer, Darin Dalmat of Barnard Iglitzin & Lavitt LLP, argued that the Washington Supreme Court correctly determined that Glacier’s lawsuit was preempted based on the company’s allegations of spoiled concrete. The workers took reasonable precautions to protect the concrete, which is a perishable like milk, he said.

Rather than reverse the ruling from the state high court as the Biden administration advises, the Supreme Court should vacate that decision with instructions to stay the case in light of the NLRB complaint against Glacier, Dalmat said.

“And the reason for that is that the government is essentially asking for an advisory opinion,” he said. “It’s asking this court to ignore current reality.”

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

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

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