Supreme Court Backs Employer in Suit Over Strike Losses

The Supreme Court ruled on Thursday that federal labor law did not protect a union from liability for damage that arose during a strike, and that a state court should resolve questions of liability.

The majority found 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” the employer’s property “rather than 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 backed more sweeping concurring opinions. A single justice, Ketanji Brown Jackson, dissented.

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

“It will definitely lead to more expensive-to-resolve lawsuits against labor unions,” said Charlotte Garden, a law professor at the University of Minnesota who was an author of a brief in support of the union. Professor Garden did note, however, that the decision was less far-reaching in discouraging strike activity than it could have been.

Others have argued that the ruling was necessary to prevent workers from intentionally harming employer’s property, an act not protected by federal labor law, and that the right to strike is not jeopardized by such restrictions.

“Damages from intentional destruction of property are not inherent to the act of striking,” said Michael O’Neill of the Landmark Legal Foundation, a conservative legal advocacy group that submitted a brief in the case. As a result, Mr. O’Neill said, the law does not shield workers or unions from liability for such damage.

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

The union argued that it took reasonable steps to avoid harming the employer’s property, as federal law requires, because workers kept their trucks running as they walked off the job. That allowed the company to dispose of the concrete without damage to the trucks. The union said the lost concrete amounted to the spoilage of a product, for which unions were not typically held liable.

At issue were two key questions. The first was procedural: whether the case should be allowed to go forward in state court, as employers generally prefer. The alternative is that the state court — in this case, Washington — should step aside in favor of the National Labor Relations Board, the federal agency responsible for resolving labor disputes.

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

The two issues are linked because under legal precedent, the labor board is supposed to elbow aside state courts when the 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 result of the strike. Instead, “the drivers prompted the creation of the perishable product” and then waited until the concrete was inside the trucks before walking off the job.

“In so doing, they not only destroyed the concrete but also put Glacier’s trucks in harm’s way,” the majority opinion said. It sent the case back to Washington State court to be litigated.

The decision, which could cause unions to reconsider striking or take a more cautious approach when a perishable product could be harmed, follows a series of rulings that appeared to scale back the power of unions and workers.

The court ruled in 2018 that companies could prohibit workers from collectively bringing legal actions against their employers, even though the National Labor Relations Act protects workers’ rights to engage in so-called concerted activities.

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

In 2021, the court deemed unconstitutional a California regulation that gave unions access to agricultural employers’ property for recruitment.

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

Mr. O’Neill’s group, the Landmark Legal Foundation, argued that a ruling against the employer could have jeopardized the labor peace that the National Labor Relations Act was enacted to assure, “placing workers and the public at risk” by essentially blessing acts of vandalism and sabotage.

Unions and workers often deliberately plan strikes to exploit employers’ vulnerability — for example, Amazon workers walked out during the holiday season — and rely on an element of surprise to maximize the economic harm they inflict, and therefore the leverage the union gains.

In the near term, unions that are contemplating strikes or already striking, such as unions representing Hollywood writers or United Parcel Service employees whose contract expires this summer, may have to take greater precautions to insulate themselves from legal liability.

Such precautions will typically weaken the impact of strikes, said Ms. Garden, the University of Minnesota professor. “You could get unions prophylactically adopting less effective tactics — things like giving advance warning about strike, which gives the employer a lot more time to hire replacement workers,” she said.

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

Further out, unions and their political allies may seek to enact legislation that explicitly exempts workers from liability for certain types of economic damage that arise during a strike. “There will be efforts in blue states to make the best of it, to do something protective,” said Sharon Block, a former Biden and Obama administration official who is a professor of practice at Harvard Law School.

But even these laws could ultimately wind up being challenged before the Supreme Court, experts said.

Adam Liptak contributed reporting.