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Court Says Employers May Sue for Damages Where Union Fails to Take Reasonable Precautions to Protect Employer's Property from Eminent Danger due to Strike

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The U.S. Supreme Court on June 1, 2023, ruled that the Labor Act does not protect 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.  Glacier Northwest, Inc. v. Teamsters Local 174, Case No. 21-1449.  The union called the strike to start on the morning it knew the company was mixing substantial amounts of concrete and making deliveries.  The union directed drivers to ignore their employer's instructions to finish deliveries in progress, resulting in the concrete mix becoming hardened and useless.  The state court judge had dismissed the suit ruling that it would "defer to the exclusive competence" of the NLRB regarding activity "arguably" subject to the Labor Act.  In an 8-1 ruling, Justice Barrett wrote for the majority that: "The National Labor Relations Board has long taken the position . . . that the [National Labor Relations Act (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."  Given this undisputed limitation of the right to strike, the Court concludes that:  "The union has not met its burden as the party asserting pre-emption to demonstrate that the NLRA arguably protects the drivers' conduct."  Thus, the union could be sued in state court for damages.  Only Justice Ketanji Brown Jackson dissented.  

Editor's Note:  Although some press discusses the ruling as a blow to organized labor, it is not a significant change in existing law.  Courts have generally found over the years that damaging company property is a matter reserved for state and local law, and not pre-empted by the NLRB, thus allowing employers to sue for damages.  Damage to the employer's property in the current case was a little more nuanced, as drivers simply abandoned their fully-loaded trucks without informing anyone about the strike, intentionally causing destruction of the concrete and compromising the safety of the trucks.  The case turned on the employer's argument that the strike wasn't even arguably a protected strike but instead was a deliberate destruction of company property.  Further, the ruling is not as broad as it first seems, as it did not create a blanket rule that the destruction of perishable goods can lead to state court damages alone.  The court appeared to be distinguishing between conduct in which property is destroyed as a by-product of the work stoppage and one where the union targets and intends for company property to be destroyed. 

This article is part of our August 2023 Newsletter.

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