Supreme Court's decision in Glacier Northwest allows employers to sue for intentional property damage

In a highly anticipated decision, the United States Supreme Court ruled in Glacier Northwest, Inc. v. International Brotherhood of Teamsters, Local No. 174 that employers can sue unions that plan strikes in such a way as to intentionally cause property damage. Justice Barrett, writing for the 8-1 majority, held that such conduct goes beyond that which is even "arguably protected" by the National Labor Relations Act; therefore, lawsuits filed by employers seeking to recover for property damage sustained as a result of such work stoppages are not preempted by federal law and can proceed.

While the case was decided narrowly on the facts presented, it may end up being a significant win for employers. If the case truly does herald a new class of lawsuits holding unions accountable for the economic consequences of their strikes, unions may think twice before planning a strike in a way that inflicts maximum economic harm.

The Facts of the Case

Glacier Northwest arose from a dispute between a concrete supplier and IBT Local 174 when negotiations for a successor collective bargaining agreement grew contentious. As alleged in the complaint, concrete is highly perishable, lasting only for a short time. It can also cause significant damage if left to harden in a truck's rotating drum. Wet concrete, therefore, cannot be batched until it is ready for delivery, and the delivery has to happen relatively quickly. According to Glacier, the Union knew all of this. Yet it coordinated with truck drivers to report to work, "pretending as if they would deliver the concrete" as instructed. Unaware of the pending work stoppage, Glacier commenced batching the concrete and loading it into trucks. After 16 trucks with full loads went out for delivery, the Union called its strike. Drivers, acting on the Union's instructions, refused to finish the deliveries in progress and returned the fully loaded trucks before walking off the job. Although Glacier was ultimately able to unload the wet concrete and avoid damage to its trucks, all of the concrete it mixed that day had to be destroyed.

Glacier then sued the Union, seeking damages for its property losses. The trial court dismissed the complaint after finding that the strike was at least "arguably protected" by the NLRA and, therefore, preempted under the Garmon doctrine. The state supreme court agreed, and Glacier petitioned the United States Supreme Court for review. The High Court accepted review and reversed the state court, allowing Glacier's state law claims to proceed.

The High Court Roundly Rejected All of the Union's Arguments

In ruling for the employer, the Court observed that while the NLRA protects concerted activity, such rights, including the right to strike, are not absolute. A work stoppage is indefensible, for instance, when a union fails to take reasonable precautions to protect the employer's products from foreseeable and imminent danger precipitated by a sudden work stoppage. In the case at bar, the Union could have initiated the strike before Glacier's trucks were full of wet concrete, instructed drivers to refuse to load their trucks in the first place, or instructed drivers to follow instructions for facilitating the safe transfer of equipment. But as alleged in the complaint, the Union did none of those things. In many cases, the Union "did not [even] take the simple step of alerting Glacier that the trucks had been returned." Thus, "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," the Court concluded, "is not 'arguably protected' by the NLRA; on the contrary, it goes well beyond the NLRA's protections."

Turning to the Union's defenses, the Union argued that the social policy behind granting the right to strike requires a generous interpretation. Otherwise, if a risk of spoilage is enough to render a strike illegal, then workers would have no meaningful right to strike, at least as far as workers handling perishable goods go.

In rejecting this "oversimplification" of the NLRA, the Court again emphasized that the right to strike is not unlimited and requires that workers take reasonable precautions to protect the employer's plant, equipment and products from foreseeable imminent danger. The Court also explained that by artificially reducing the analysis to the question of whether property damage is foreseeable, the Union was in effect "swinging at a straw man." According to the Court, what distinguishes this case from others involving the spoilage of perishable goods is that in Glacier Northwest the Union "prompted the creation of the perishable product" by having the drivers show up for work and then waiting to walk off the job until after the concrete was batched and loaded onto the delivery trucks. Glacier Northwest thus "involves much more than a work stoppage at a time when the loss of perishable products is [merely] foreseeable."

What Does This Mean for Employers and Unions in the Future?

The long-term consequences of this decision are unclear. Although cases involving spoilage of perishable goods are most likely to trigger employer-initiated lawsuits, there is nothing in the Court's reasoning to suggest that its application would be limited in this way as a matter of law. The case does, however, arise under relatively unique facts, and not all industries face the same threat of a sudden, surprise work stoppage. In healthcare settings, for instance, unions are mandated by federal law to provide advance notice of a strike, which, if followed, would seem to mitigate against the presence of imminent harm. Time will tell whether the decision opens the doors to a new type of litigation that ultimately dampens union strike activity across multiple industries.

It is also too soon to tell whether this case paves the way for local lawmakers to more directly regulate protected concerted activity in states that are generally perceived as being hostile to organized labor. If local legislators view this case as an open invitation to begin regulating the use of economic weapons, unions will assuredly challenge those legislative efforts in court.

But all that being said, the mere possibility of holding unions accountable for at least some of the economic consequences of their work stoppages may cause them to think twice before planning a strike in a way that inflicts maximum economic harm on employers. Just the costs of litigating such cases alone may have a desired deterrent effect. So, even if the full scope of this decision is not yet clear, many employers may view it as harbinger of better times ahead.

As is often the case, this is an evolving area of law that DWT will continue to monitor. Employers wondering whether this case gives them an opportunity to file claims in state court to recover their own economic losses should, of course, consult with their legal counsel.

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