SCOTUS Permits Employer Recovery of Strike-Related Property Damage

The Supreme Court issued a decision this week holding that employer recovery under state law for a union’s intentional damage to employer property during a strike was not preempted by federal labor law. While the union argued the damages resulted from strike activity protected by federal labor law, the Supreme Court disagreed, and held that the intentional damage done to employer property was not protected by the NLRA. 

Background: The employer operated a concrete delivery service using trucks that mixed the concrete within the truck itself to prevent it from hardening. Following the expiration of the collective bargaining agreement between the employer and its employees’ union, the union conducted a work stoppage “on the morning it knew the company was in the midst of mixing substantial amounts of concrete” for deliveries. The union directed employees to intentionally interfere with this process, with the result that large amounts of concrete were hardened to the point of becoming useless, which also significantly damaged employer trucks in the process. The employer sued the union in state court for recovery of such damages.

The NLRA and preemption: The National Labor Relations Act generally preempts state law when the two even merely arguably conflict. The union in this case argued that the employer’s state law claim was thus preempted by the NLRA, as the damages incurred were the result of a strike protected by the NLRA. The Washington Supreme Court agreed, and the employer subsequently appealed to the U.S. Supreme Court. 

Right to strike “is not absolute:” In an 8-1 decision, the Supreme Court found that the union “executed the strike in a manner designed to achieve [the destruction of employer property].” The Court held that such intentional damages – and the lack of steps taken to mitigate such damages – rendered the activity unprotected under the NLRA. Accordingly, the Supreme Court held that the employer could recover the damages under state law without being preempted by the NLRA. 

Outlook: The case is notable in that it places a clear limit on the extent to which unions can destroy employer property through strike activity while retaining the protection of the NLRA, and conversely empowers employers to recover damages for activity beyond that limit.