The Supreme Court dealt a serious blow to a core protection of workers, the right to strike. The court held that unions can be sued for the “foreseeable” damages their strikes cause employers a sweeping threat to the federally protected right, because virtually all strikes pose a “predictable” danger of harm.
The strike by graduate students at the University of California in 2022 was when some of the students did not get their grads on time. The ongoing writers’ strike in Hollywood will lead to economic harm to studios, caterers, actors and set builders. Lockouts in professional sports have resulted in the cancellation of games and losses to players, TV networks and peanut vendors.
The court has opened the door to holding unions liable for the economic consequences of their strikes, the question is where to draw the line. Unfortunately, the justices give no answer to that question, and that uncertainty in itself will intimidate unions from exercising their federally protected right to strike.
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.
Crux of the case
The case, Glacier Northwest, Inc. vs. International Brotherhood of Teamsters Local Union No. 174, involved a strike by cement truck drivers. When the drivers went on strike, they returned the trucks to the employer and left the drums turning so the trucks would not be damaged. But because the employer had chosen not to exercise its right to hire replacement workers or use nonstriking workers to deliver and pour the concrete, the cement was ruined. Glacier Northwest sued the union for damages for the loss of the concrete.
Impact on Employers and Unions’ Future
The long term consequences of this decision are unclear. Time will tell whether the decision opens the doors to a new type of litigation that ultimately dampens union strike activity across multiple industries.
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.
The central issue in the Glacier case was whether the National Labor Relations Act, which protects the right of employees to strike, precludes a state court from imposing liability on a union for the economic consequences of a strike.
As Justice Ketanji Brown Jackson said in her dissent this week, “the threat of economic harm posed by the right to strike is a feature, not a bug, of the NLRA.” The threat of economic loss to employers and to striking workers is what causes the parties to negotiate a settlement. As she observed, “Unions leverage a strike’s economic harm (or the threat of it) into bargaining power, and then wield that power to demand improvement of employees’ wages and working conditions.”
The court’s new rule that unions can be held liable for “foreseeable and imminent danger” of economic harm is contrary to past cases that unions could not be held liable when their strikes caused loss of perishable goods. The court said those cases are different, but it failed to say why. The majority opinion also ignored the provision of the National Labor Relations Act stating that only healthcare workers must give advance notice of the day and time a strike will commence.
The National Labor Relations Act was intended to provide clarity and solid ground on which employees and employers could resolve their differences. With the ruling, the justices have done the opposite, and workers will pay the price.
As is often the case, this is an evolving area of law that we will continue to monitor.
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