The U.S. Supreme Court recently decided in Glacier Northwest, Inc. v. Int’l Bhd. of Teamsters Local Union No. 174, No. 21-1449 (June 1, 2023), that the National Labor Relations Act (NLRA) does not prohibit certain claims against unions related to property damages caused during strikes.
While recognizing that the NLRA protects employees’ right to strike, the Court solidified the obligation of employees and unions to take “reasonable precautions” to prevent foreseeable and substantial property damage when engaging in strike actions. In doing so, the Court made it clear that employers can bring actions against unions to pursue damages for harm to their property when unions disregard such duties.
The case began when a union representing employees of a ready-mix concrete company decided to call their strike at the time when the company was most vulnerable — when the concrete was contained in trucks with rotating drums to prevent it from hardening. The union employees walked off the job, leaving it for others to extract the concrete before it destroyed the trucks. To avoid this and prevent environmental harm, the employer needed to swiftly construct bunkers to contain discharged concrete, which quickly became hardened and useless.
In an effort to remedy its damages, Glacier Northwest filed suit against the union in Washington state court for intentional property destruction. However, the employer was unable to obtain a hearing on the merits of its claim. Instead, the claim was quickly dismissed by the trial court on grounds that the union’s activities were at least arguably protected by the NLRA. In the state court’s view (and from the union’s perspective), it could not adjudicate the claim because that would disturb the structure of federal labor law, which requires most claims to be heard by the National Labor Relations Board (NLRB) with limited exceptions. The trial court’s determination was upheld by the Washington Supreme Court, whereupon the employer sought review in the U.S. Supreme Court.
On review, the U.S. Supreme Court held that the union’s conduct, as alleged in the employer’s complaint, was not protected, or even arguably protected, by the NLRA. After reviewing principles of federal preemption, which block state court proceedings that undermine the uniform application of federal law, the Court found that the NLRB and the courts had consistently applied a duty of unions and employees to take “reasonable precautions” to prevent damage to employers’ property. Applying that standard to the allegations in this case, the Court decided that by timing the strike to intentionally place the concrete, trucks, and other property in immediate danger of destruction, the union did not take reasonable precautions. In reaching its decision, the Court distinguished previous cases in which the NLRB ruled strikes did not lose the protection of the NLRA when they created a risk of spoliation of perishable products. In this case, the Court found that by reporting for work and pretending that they would deliver the concrete as per usual, the drivers “prompted the creation” of the perishable product which clearly does not comport with their obligation to take reasonable precautions to prevent damage.
The case was remanded back to the state courts to allow for further proceedings. It is now up to the Washington state courts to determine whether the union’s conduct violated state tort law related to property damage, without interference from federal labor law.
Employers facing contentious labor disputes — which have been popping up more frequently in recent years — now have additional support to vindicate claims against unions for property damages. This case makes it clear to unions that they cannot seek shelter under labor law for property damage caused by their members without reasonably attempting to save employer property during strikes or other protected activity. Nevertheless, the Court’s holding is somewhat limited; e.g., the Court did not hold that unions must carefully time a work stoppage to avoid any damage to the struck employer, nor did it opine whether an employer could discipline employees for having engaged in such conduct. From that standpoint, the Court’s ruling is helpful, but not “game changing” for employers confronting a strike. When navigating the complex interaction between federal labor law and state law tort claims, employers would be wise to consult with experienced labor counsel.
For additional information about the implications of this NLRB development or other NLRB decisions, please contact Andrew MacDonald at firstname.lastname@example.org, Robert Nagle at email@example.com, or another member of Fox Rothschild’s national Labor & Employment Department.