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Aug 07, 2023

SCOTUS confirms unions can be sued for property damage

Director of the Janus Project In an important ruling last week, the U.S. Supreme

Director of the Janus Project

In an important ruling last week, the U.S. Supreme Court held that unions can be sued in state court for damages if striking workers intentionally destroy their employer's property. The decision is a victory for employers that puts unions on notice that there are consequences for their reckless actions during strikes.

In Glacier Northwest v. International Brotherhood of Teamsters, Local Union 174, the high court considered a lawsuit brought by concrete company Glacier Northwest against the local Teamsters Union in Washington state. At issue in the case was whether a union could be sued by an employer in state court for property damage caused by the union's strike or whether it should instead be considered a labor dispute under the jurisdiction of the National Labor Relations Board (NLRB), which oversees collective bargaining and enforces the National Labor Relations Act (NRLA).

The facts of the case are particularly important. The Supreme Court summarized Glacier's allegations against the Teamsters this way:

"The Union knew that concrete is highly perishable and that it can last for only a limited time in a delivery truck's rotating drum. It also knew that concrete left to harden in a truck's drum causes significant damage to the truck. The Union nevertheless coordinated with truck drivers to initiate the strike when Glacier was in the midst of batching large quantities of concrete and delivering it to customers."

The opinion goes on to explain that when the drivers walked off the job, Glacier was left scrambling to figure out a way to get the concrete out of the trucks before it dried. Environmental restrictions on how concrete can be disposed of made the situation more dire. Although Glacier was eventually able to build special bunkers to offload the concrete, the company sued the union in state court for tort damages for the lost product.

The trial court and Washington Supreme Court dismissed Glacier's claim on the grounds that they didn't have jurisdiction and the dispute was instead a matter subject to NLRB's authority. Under the "Garmon preemption" — named after a 1959 Supreme Court case — states cannot regulate conduct that the NLRA "arguably" protects or prohibits.

In other words, so long as a labor dispute could arguably fall under the labor board's umbrella, the state court assumes NLRB's federal authority preempts state law.

The U.S. Supreme Court disagreed. In a 8-1 opinion written by Justice Amy Coney Barrett, the Court reversed the Washington ruling and held that Glacier Northwest can sue in state court.

As the Court makes clear, while the NLRA protects the right to strike, "this right is not absolute."

"The Board has long taken the position…that 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," wrote Barrett.

Here, Glacier claimed the Teamsters instead intentionally planned the strike to destroy the concrete. The Supreme Court found that the timing of the strike made the risk of harm to the company's equipment "foreseeable and serious." Barrett explained:

"Indeed, far from taking reasonable precautions to mitigate foreseeable danger to Glacier's property, the Union executed the strike in a manner designed to compromise the safety of Glacier's trucks and destroy its concrete. Such conduct is not "arguably protected" by the NLRA…." (Emphasis added.)

As Supreme Court reporter Sharon Block notes, the majority distinguished Glacier Northwest from "a long line of cases in which the NLRB had held that the NLRA protected strikes that resulted in the loss of perishable goods like slaughtered poultry and fresh milk." In Glacier, the Supreme Court found that the union's decision about when to start the strike created the perishable product.

Barrett wrote:

"…By reporting for duty and pretending as if they would deliver the concrete, the drivers prompted the creation of the perishable product. Then, they waited to walk off the job until the concrete was mixed and poured in the trucks. In so doing, they not only destroyed the concrete but also put Glacier's trucks in harm's way." (Emphasis added.)

In short, there's a difference between a strike that causes economic injury through work stoppage and union orders that intentionally destroy an employer's property.

Or as Justice Roberts opined during oral arguments in the case in January: "The difference between the milk spoiling and killing the cow."

Justice Ketanji Brown Jackson, the newest addition to the court, was alone in her dissent.

"Workers are not indentured servants bound to continue laboring until any planned work stoppage would be as painless as possible for their master," Jackson wrote, missing the point entirely.

Not surprisingly, union leaders and union-backed politicians misrepresented the ruling.

Teamsters General President Sean O’Brien put out an over-the-top statement: "Today's shameful ruling is simply one more reminder that the American people cannot rely on their government or their courts to protect them… We can only rely on the protections inherent in the power of our unions."

Unhinged California Congressman Adam Schiff (D-CA) called to "expand and reform" the "partisan court" — ignoring the 8-1 ruling — and decried the decision as "a clear attack on union workers & their right to organize."

In reality, the Supreme Court brought some semblance of oversight to the NLRB, a rogue administrative bureau that has regularly condoned unionized labor's petulant protests and long subverted the courts. This ruling means unions can't hide behind the NLRB to terrorize companies by intentionally destroying their property and product.

It remains to be seen whether lower courts will view Glacier Northwest narrowly given its unique facts or more broadly. Either way, the unions should heed the ruling as a warning when timing future strikes to wreak the most havoc possible.

Houston Reese is the Director of The Janus Project at California Policy Center.