Last Exit to Seattle? Supreme Court to Determine Which Strike Tactics are Protected

ABSTRACT: Will it soon be easier to sue a union for property damage incurred as a result of a strike? The Supreme Court will soon hear a case that may answer that question.

The Supreme Court is potentially poised to expand the circumstances under which an employer can sue a union for property damage incurred during a strike. In Glacier v. International Brotherhood of Teamsters Local Union No. 174, the Supreme Court will decide the standard for when a court should determine that the National Labor Relations Act preempts state tort claims.

The plaintiff, Glacier Northwest, Inc. sued IBT Local174 for damage to property arising out of a strike. Glacier sells and delivers ready-mix concrete to state-wide businesses. Each job has custom-made concrete that must be delivered the same day it is mixed, or it hardens and damages the cement truck’s revolving drum. When negotiations for a new collective bargaining agreement broke down, Glacier’s drivers returned their trucks back to Glacier’s yard with their trucks still fully loaded with concrete. The following day, Glacier was scheduled to perform a pour for a company called GLY. It was re-scheduled to August 19, 2017, due to the strike. On August 18, 2017, Glacier and the Teamsters agreed to terms on a new CBA, and drivers were told to report back to work. However, there were rumors that drivers would not return on August 19^th, which was the rescheduled date of the GLY pour. Because of the rumors, Glacier and GLY wanted assurances from the Teamsters that the pour would be completed. Allegedly the Teamsters told GLY drivers were instructed to respond to dispatch. On August 19^th, there were not enough drivers for the mat pour, and Glacier sustained $100,000 in damages.

On December 4, 2017, Glacier filed a complaint in Washington State Court, alleging conversion and trespass to chattels, tortious interference with contract, civil conspiracy to destroy its concrete, and negligent misrepresentation, fraudulent misrepresentation, and intentional interference with contract. The Teamsters then filed a complaint with the National Labor Relations Board and moved to dismiss all of Glacier’s tort claims, arguing the Act preempted the claims. The trial court granted the Teamsters’ motion to dismiss, concluding the claims were preempted. The Teamsters also moved for summary judgment on the claims of misrepresentation and intentional interference, which the trial court granted. Glacier appealed and the Court of Appeals reversed the dismissal of destruction to property claims but affirmed the dismissal of the misrepresentation claims. The Court of Appeals concluded these claims were not preempted because the intentional destruction of the employer’s property is clearly not protected concerted activity under Section 7 of the Act and reversed the trial court. The Court of Appeals also affirmed the summary judgment dismissal of the misrepresentation claims.

On appeal, the Washington Supreme Court reinstated the trial court’s dismissal. The court relied on San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), finding that the Teamsters’ actions at the outset of the strike were “arguably” protected by Section 7 of the Act, and that it should be left to the Board to determine whether their actions were actually protected. The Board would then have primary jurisdiction to hear any claims that strike-related conduct was unlawful. The Supreme Court has identified exceptions to Garmon preemption, including where the “local interest” or “local feeling” justified the continued availability of tort claims. This has traditionally meant that the States’ interest in protecting property rights would defeat NLRA preemption and allow tort suits for the intentional destruction of property, plant, and equipment, or violence and intimidation in connection with a strike.

In its certiorari brief, Glacier argued that the Constitution requires that State courts be able to redress property damage, in the first instance, because every State’s “local interest” involves respect for personal property rights. Next, Glacier argued that courts must do more than identify whether competing interests between employers and employees would make strike conduct “arguably” protected under the Act. Unions asserting protected activity should therefore have to make a heightened showing on a motion to dismiss demonstrating that their strike conduct was lawful. Finally, Glacier argued that an expansive preemption doctrine violates the Fifth Amendment’s Takings Clause by foreclosing state court remedies and limiting recourse to remedies available under the Act. Glacier cited to Cedar Point Nursery v. Hassid, (Opinion) a case from the high court’s last term, which held that state regulations allowing unions access to solicit employees constitutes a governmental taking under the Constitution. Glacier also cited Justice Kavanaugh’s concurrence, in which he wrote that labor law should not preempt the Constitution’s “strong protection of property rights.”

In response, the Teamsters argued that the Washington Supreme Court was correct in finding that the strike conduct was “arguably” protected under the Act. The decision of whether it was actually protected should be made by the Board, in a pending complaint brought by the General Counsel. The Teamsters pointed out that inevitably strikes will bring about economic loss and inconvenience, but the drivers took reasonable precautions to prevent “foreseeable imminent danger” by returning the trucks to Glacier for management to handle. Finally, the Teamsters argued in favor of the traditional rule that the Board should not have necessarily be the last word on labor matters, but “must assuredly be the first.” That is, the courts should defer to the Board’s expertise in labor matters.

There are many competing concerns involved in this case. On the one hand, strikes are one of the basic instruments a union has in applying economic pressure in bargaining. Generally, any employer with spoilable products will suffer damage to their property in the course of a strike. Will a ruling in favor of Glacier severely limit a union’s ability to strike, given the fear of tort claims for property damage? For employers, the threat of a lawsuit against striking unions may be an attractive weapon, but a lawsuit may be costly and more disruptive in the long-term.

The Court has scheduled oral argument in this case for January 10, 2023. Baker Sterchi attorneys will be closely monitoring this case as it develops and will update this blog post. But regardless of how the Court ultimately rules, there are a few takeaways that every employer should consider:

• Strike planning during CBA negotiations is crucial. Where there is a possibility of impasse, employers should plan ahead: from identifying alternative entry gates, to hiring replacement workers or having managers on call to preserve property and goods.
• If tort principles are to apply to property damage incurred during strikes, then the employer’s duty to mitigate damage also applies. An employer is unlikely to garner sympathy from a judge or jury (and may have its claims completely barred) if it allows its products to be destroyed by its inaction.
• The stakes in this case are quite high. If the Supreme Court adopts Glacier’s argument that a federal labor regulation which limits an employer’s economic remedies against a union is a “taking” under the Constitution, then the Board’s original jurisdiction is likely to be severely curtailed. How expansively the Court defines “damage to property” will dramatically change labor relations for the next several decades.