New England Biz Law Update
A case pending before the U.S. Supreme Court has the potential to make it easier for employers to sue over labor union strikes that cause damage to company property.
This month, the court heard oral arguments in a case involving an appeal by Glacier Northwest Inc., a concrete company in Washington state that is a unit of Japan-based Taiheiyo Cement Corp.
While some conservative justices seemed likely to support companies’ ability to sue unions in state court, liberal justices seemed worried that a proliferation of such suits would chip away at unions’ right to strike.
If the employer wins, the decision will continue the tide against union-organizing. In 2021, the Supreme court struck down a California regulation that bolstered union organizing among agricultural workers.
In the case currently before the court, the question is whether companies can sue unions in state court over allegations of intentional property damage or are blocked from doing so by the National Labor Relations Act.
At oral argument, Justice Elena Kagan said that a broad ruling in favor of companies could make it more challenging for unions to make strategic decisions as to when to strike.
“When we start focusing on intent, without more, it pulls in pretty much every strategic decision that a union makes as to when to conduct a work stoppage,” Kagan said.
But Chief Justice John G. Roberts Jr. commented that there is a difference between causing economic harm and intentionally destroying property.
“The difference between the milk spoiling and killing the cow,” Roberts said.
Glacier Northwest filed a state court lawsuit against Teamsters Local Union No. 174, which represented the company’s truck drivers, alleging that the union intentionally destroyed company property during the strike.
Glacier Northwest drivers went on strike while their mixing trucks were filled with concrete. During this time, they kept the mixing drums rotating in an attempt to prevent damage from the concrete hardening. However, the company still had to get rid of the unused concrete and suffered financial loss as a result.
President Joe Biden’s administration asked the justices to reverse the lower court’s decision allowing the employer to sue.
In 2021, the Washington Supreme Court ruled that the company’s state-law claims were preempted by the NLRA. It found that the company’s loss of concrete was connected with a federally protected strike.
Before the Supreme Court, Glacier Northwest argued that federal preemption does not stop state-law claims related to intentional destruction of an employer’s property.
Meanwhile, the union argued that 1) the strike was arguably protected under the NLRA, and that 2) the loss of the concrete did not meet the high threshold to override federal preemption. Further, the union argued that, even though the Supreme Court has previously found that labor unions can be sued in state court for violent or threatening conduct, that falls under a narrow exception and should not be extended to a state-law claim related to intentional property damage.
A decision from the court is expected this term.
