The Washington Supreme Court recently decide whether an employer’s state tort claims against its truck drivers’ union are preempted by the National Labor Relations Act (“NLRA”) and whether any claims that are not preempted were properly dismissed in the lower courts.[1]
Glacier Northwest Inc. (“Glacier “) is a Washington corporation that sells and delivers ready-mix concrete to businesses in Washington. Glacier creates custom batches of concrete for each job, mixing various materials to customer specifications. The materials are first mixed in a hopper or a barrel, then moved into a ready-mix truck that continues to mix the materials until the concrete is delivered to the customer. Concrete begins to harden as soon as 20 to 30 minutes after the mixing stops, so Glacier must deliver the concrete on the same day it is mixed or else it becomes useless. And if the concrete remains in the ready-mix trucks long enough, it will eventually harden and damage the truck’s revolving drum. 198 Wn.2d at 774.
Glacier employs approximately 80 to 90 truck drivers to deliver concrete, and International Brotherhood of Teamsters Local Union No. 174 (“Local 174”) is the exclusive union representative for Glacier’s truck drivers in King County. Glacier’s lawsuit stemmed from Local 174’s conduct both before and after the ratification of a new collective bargaining agreement (“CBA”) between Glacier and Local 174 on August 18, 2017. On August 11, 2017, during negotiations for the new CBA, Glacier truck drivers went on strike by stopping work, and this strike resulted in the loss of some of Glacier’s concrete. Just after the CBA was ratified and the strike ended on August 18, 2017, a Local 174 representative allegedly misrepresented whether Glacier drivers would service a mat pour job on the “Vulcan Project,” a construction project in Seattle’s South Lake Union, that was rescheduled to August 19 after the August 11 strike. While Glacier rescheduled the mat pour for August 19, it did not schedule drivers for work that day because it was unclear how long the strike and bargaining for the new CBA would last. Id. at 774-5.
Glacier filed a complaint for damages in King County Superior Court against Local 174, alleging six claims. Based on the work stoppage on August 11, Glacier sued Local 174 for conversion and trespass to chattels, tortious interference with contract, and civil conspiracy to destroy its concrete. Glacier also sued Local 174 for negligent misrepresentation, fraudulent misrepresentation, and intentional interference with contract based on Local 174’s statements regarding the mat pour cancellation. Id. at 779.
Soon after, Local 174 filed a complaint with the National Labor Relations Board (“Board”), alleging Glacier committed unfair labor practices under 29 U.S.C. § 158(a)(1) and (3) by retaliating against Local 174 members for engaging in a protected strike; threatening to file, and then filing, an “objectively baseless federally preempted lawsuit”; and abusing the discovery process to obtain information about protected activity. Local 174 then moved to dismiss all of Glacier’s tort claims for lack of subject matter jurisdiction and failure to state a claim on which relief could be granted, arguing the claims were all preempted by 29 U.S.C. §§ 157, 158 (sections 7 and 8). The trial court ruled the strike-related claims were preempted by the NLRA and granted summary judgment for Local 174 on the misrepresentation claims. Glacier appealed, and the Court of Appeals reversed on the preemption issue but affirmed the trial court’s dismissal of the misrepresentation claims. Id. at 779-82.
Local 174 petitioned for discretionary review to the Washington Supreme Court, seeking review of the Court of Appeals holding that Glacier’s claims were not preempted by the NLRA. In its answer to Local 174’s petition for review, Glacier cross petitioned for review of the Court of Appeals holding affirming the summary judgment dismissal of Glacier’s misrepresentation claims and intentional interference with contract claim. The Washington Supreme Court granted review of both Local 174’s petition for review and Glacier’s cross petition for review. Id. at 782.
A. Glacier’s strike-based claims are preempted because the conduct at issue is at least “arguably protected” by section 7 of the NLRA.
Federal labor legislation may preempt state law. Id. at 783. Sections 7 and 8 of the National Labor Relations Act (“NLRA”), 29 U.S.C.A. § 157 and 158, protect concerted activities in collective bargaining and prohibit unfair labor practices, respectively. Id. at 784. When an activity is arguably subject to sections 7 or 8 of the NLRA, the States as well as the federal courts must defer to the exclusive competence of the Board if the danger of state interference with national policy is to be averted. Id. at 785. Washington recognizes two exceptions to its preemption analysis: (a) where “the activity regulated was a merely peripheral concern of the Labor Management Relations Act” or (b) “where the regulated conduct touched interests so deeply rooted in local feeling and responsibility that, in the absence of compelling congressional direction, we could not infer that Congress had deprived the States of the power to act.” Id. at 786 (emphasis added). The “local feeling” exception involves state jurisdiction over claims to “grant compensation for the consequences, as defined by the traditional law of torts, of conduct marked by violence and imminent threats to the public order.” Id. State jurisdiction to enforce its laws prohibiting violence, defamation, the intentional infliction of emotional distress, or obstruction of access to property is not pre-empted by the NLRA. Id. at 788. However, the incidental destruction of products during a strike, as opposed to property damage for its own sake, has not been sufficient to invoke the “local feeling” exception in any United States Supreme Court case. Id. at 789. Because Glacier’s trucks or facilities were not intentionally destroyed, the Washington Supreme Court concluded this exception does not apply: “the concrete product damage caused by the drivers’ conduct cannot be viewed in isolation; viewed in the context of the strike, it does not clearly come within ‘local feeling’ exception, so it is not clearly or categorically unprotected conduct under section 7 of the NLRA.” Id. at 789-90. Moreover, because employees are allowed to cause some economic harm to effectuate a strike and gain leverage in bargaining, the possible loss of perishable product from a work stoppage does not render the strike unprotected as long as the strike is done for bargaining purposes. Id. at 792. The Court recognized that if it had the authority to do so it was possible that it could find that the strike activity was unprotected, however, the Court concluded that “this kind of fact-specific determination is a function of the Board in the interest of the uniform development of labor policy,” and State court adjudication “would potentially interfere with important federal interests,” therefore “[b]ecause it is debatable whether the work stoppage resulting in concrete loss was a protected strike, the drivers’ conduct is at least arguably protected under section 7,” the Court held that the NLRA preempted Glacier’s tort claims.
B. Glacier’s remaining claims fail because the alleged misrepresentation was a promise of future performance, rather than a statement of existing fact, and the intentional interference was not a proximate cause of Glacier’s losses.
On August 18, the day the strike ended, Glacier sought an assurance from the Local 174 representative as to whether drivers would service the mat pour the following day. Id. at 801. When Local 174’s representative was asked whether the drivers would respond to dispatch and service the mat pour on August 19, the response was “ ‘[t]he drivers have been instructed to respond to dispatch’ ” and “ ‘[w]e have specifically instructed the drivers to respond to dispatch.’ ” Id. Glacier argued these statements constitute fraudulent and negligent misrepresentation, as well as intentional interference.
The Supreme Court disagreed. First, a statement of existing fact is a prerequisite to both a fraudulent misrepresentation claim and negligent misrepresentation claim, while a future promise or agreement for the scope is not a statement of existing fact for a fraud claim. Id. at 800. Finding that the statement by Local 174’s representative constituted a promise for future performance by the drivers to report to work, and not a statement of presently existing fact, the Supreme Court held that the statement did not constitute either a negligence or fraudulent misrepresentation claim. Id. at 802.
Second, interference resulting in a more expensive or burdensome performance of a contract may form the basis of an intentional interference claim. Id. at 803. Glacier claimed that it would not have scheduled the mat pour for August 19 but for the statement by Local 174’s representative assuring that the drivers would respond to dispatch. However, the Supreme Court found that the causal relationship between the statement and Glacier’s losses “remains too attenuated” as a matter of law. Id. at 803-04. Given the context of the of the work stoppage and the CBA, the losses due to the canceled mat pour were not a foreseeable result of the statement because “the drivers were not required to service the mat pour even if they had been instructed to respond to dispatch” and “the union representative lacked the authority to bind the employees to work without regard to the CBA conditions.” Id. at 804. Accordingly, the Supreme Court concluded that Glacier failed to establish proximate cause for Glacier’s losses and affirmed the dismissal of the claim.
Commentary: Although there are limits to the damages to property allowed under the NLRA, WA Courts are loathe to override the presumed preemption of the Act and authority of the Board. Taking steps to prioritize success before the Board is in the best interest of contracting parties.
[1] Glacier Nw., Inc. v. Int’l Bhd. of Teamsters Loc. Union No. 174, 198 Wn.2d 768, 500 P.3d 119 (Dec. 16, 2021).