Supreme Court backs employer in strike losses lawsuit

The Supreme Court ruled Thursday that federal labor law did not protect a union from liability for damages incurred during a strike, and that a state court must resolve questions of liability.

The majority felt that actions during a strike by a local Teamsters union were not even arguably protected by federal law because the union “took affirmative steps to ‘endanger employer’s property’ instead of taking reasonable precautions to mitigate that risk.”

The opinion, written by Justice Amy Coney Barrett, was joined by Chief Justice John G. Roberts Jr. and Justices Sonia Sotomayor, Elena Kagan and Brett M. Kavanaugh.

Three conservative justices supported more sweeping, concurring opinions. A single judge, Ketanji Brown Jackson, disagreed.

Some legal experts have said a union setback in the case would discourage workers from striking by potentially making the union liable for losses suffered by an employer during a work stoppage.

“It will certainly lead to more expensive lawsuits against unions,” said Charlotte Garden, a law professor at the University of Minnesota who wrote a letter in support of the union. However, Professor Garden noted that the decision was less drastic in discouraging strike activity than it could have been.

Others have argued that the ruling was necessary to prevent workers from deliberately damaging employers’ property, an act not protected by federal labor law, and that the right to strike is not compromised by such restrictions.

“Damages from willful destruction of property are not inherent in the act of striking,” said Michael O’Neill of the Landmark Legal Foundation, a conservative legal advocacy group that filed a briefing in the case. As a result, said Mr. O’Neill, the law does not protect employees or unions from liability for such damages.

The case, Glacier Northwest v. International Brotherhood of Teamsters, No. 21-1449, involved union employees of a concrete mixing and pouring company who walked off the track during contract negotiations and left wet concrete in their trucks. The employer argued that it had suffered significant monetary losses because the abandoned concrete was unusable.

The union argued that it had taken reasonable steps to prevent damage to the employer’s property, as required by federal law, because employees were running their trucks while walking off the track. This allowed the company to dispose of the concrete without damaging the trucks. The union said the lost concrete amounted to spoiling a product, for which unions were not usually held liable.

Two key questions were central. The first was procedural: whether to take the case to state court, as employers generally prefer. The alternative is for the state court—in this case, Washington—to step aside in favor of the National Labor Relations Board, the federal agency responsible for resolving labor disputes.

The second question was what economic damage is acceptable during a strike and what constitutes vandalism of property or equipment, which is not protected by federal labor law.

The two issues are linked because, according to legal precedent, the labor council is supposed to override state courts when strike activity is at least “arguably protected” by federal law.

The Supreme Court ruled that the union’s actions during the strike were not arguably protected because the spoilage of the product was not merely an indirect consequence of the strike. Instead, the drivers “stimulated the creation of the perishable product” and then waited for the concrete to set in the trucks before walking off the track.

“In doing so, they not only destroyed the concrete, but also endangered Glacier’s trucks,” the majority said. It sent the case back to Washington state court to litigate.

The decision, which could lead unions to reconsider their strike or take a more prudent approach when a perishable product could be harmed, follows a series of rulings that appeared to reduce the power of unions and workers.

The court ruled in 2018 that companies could prohibit employees from taking collective legal action against their employers, even though the National Labor Relations Act protects employees’ right to participate in so-called coordinated activities.

In the same year, the court ruled that public sector unions could no longer require non-members to pay fees that help fund negotiations and other activities unions conduct on their behalf.

In 2021, the court ruled unconstitutional a California ordinance allowing unions to access farm employers’ property for recruiting.

In interviews, union leaders said the ruling would further tilt the already uneven playing field towards employers, and that it was often not a strike itself, but the threat of a strike that helped unions make concessions. “Without the threat of a strike, you have little influence in the negotiations,” said Stuart Appelbaum, the president of the Retail, Wholesale and Department Store Union, who has organized successful strikes.

The group of Mr. O’Neill, the Landmark Legal Foundation, argued that a ruling against the employer could have jeopardized the labor peace that the National Labor Relations Act was designed to ensure, “endangering workers and the public” through essentially acts of vandalism and sabotage .

Unions and workers often deliberately plan strikes to exploit employers’ vulnerabilities — Amazon workers walked out during the holiday season, for example — and rely on an element of surprise to maximize the economic damage they inflict, and thus the leverage afforded to unions.

In the near term, unions that are considering strikes or are already on strike, such as unions representing Hollywood writers or United Parcel Service employees whose contracts expire this summer, may need to take greater precautions to exonerate themselves from legal liability.

Such precautions will typically weaken the impact of strikes, said Ms. Garden, a professor at the University of Minnesota. “You could get unions to employ less effective tactics preemptively — things like pre-warning of strikes, which gives the employer a lot more time to hire replacement workers,” she said.

Other unions may simply decide not to strike at all for fear of increased legal exposure, she said.

Moving on, unions and their political allies can try to introduce legislation that explicitly exempts workers from liability for certain kinds of economic damages that arise during a strike. “There will be efforts in the blue states to make the most of it, to do something protective,” said Sharon Block, a former Biden and Obama administration official and professor of practice at Harvard Law School.

But even these laws could eventually be challenged in the Supreme Court, experts said.

Adam Liptak reporting contributed.