Supreme Court Issues Rulings Related to Unions, National Labor Relations Board

Late last week, the U.S. Supreme Court issued a favorable 8-1 decision for industry in the case Glacier Northwest vs. International Brotherhood of Teamsters which hinged on whether a union should be held liable for property damage due to unionized employees going on strike. The issue centered on a Pacific Northwest concrete producer, Glacier Northwest, that brought the case in which it lost 16 truckloads of concrete due to a union work stoppage. The producer sued the union, claiming it was responsible for the lost concrete and, after losing in state court, the case eventually prevailed before the Supreme Court.

The court stated in its ruling, “Far from taking reasonable precautions to mitigate foreseeable danger to Glacier’s property, the union executed the strike in a manner designed to compromise the safety of Glacier’s trucks and destroy its concrete. Such conduct is not arguably protected by the NLRA; on the contrary, it goes well beyond the NLRA’s protections.”

The court’s ruling will likely mean that unions will now have to weigh the desired outcome of a work stoppage against dramatically increased financial implications of any intentional damage to employer property.

In labor-related news from last week, the National Labor Relations Board (NLRB) general counsel sent a memo to all NLRB regional directors notifying them that employers that require their employees to sign non-compete “contracts and severance agreements” related to working for a competitor shall be considered in violation of the National Labor Relations Act. The memo states that “overbroad non-compete agreements are unlawful because they chill employees from exercising their rights under Section 7 of the National Labor Relations Act, which protects employees’ rights to take collective action to improve their working conditions.” In these instances, the memo directs regional directors to “submit cases involving non-compete provisions that are arguably unlawful.”

The memo details that such contracts prevent an employee’s ability to: “1. concertedly threaten to resign to secure better working conditions; 2. carry out concerted threats to resign or otherwise concertedly resign to secure improved working conditions; 3. concertedly seek or accept employment with a local competitor to obtain better working conditions; 4. solicit their co-workers to go work for a local competitor as part of a broader course of protected concerted activity; 5. seek employment, at least in part, to specifically engage in protected activity, including union organizing, with other workers at an employer’s workplace.”

However, the memo does concede that “in some cases, noncompete agreements could be lawful if the provisions clearly restrict only individuals’ managerial or ownership interests in a competing business, or true independent-contractor relationships. Moreover, there may be circumstances in which a narrowly tailored non-compete agreement’s infringement on employee rights may be justified by special circumstances.”

Click here to read the NLRB announcement and non-compete memo. For more information, contact Kevin Walgenbach.