U. S. Supreme Court Issues Graniterock-Teamsters Ruling
In the long-running case of Graniterock Co. v. International Brotherhood of Teamsters & Teamsters Local 287, the U.S. Supreme Court last week confirmed Graniterock�s jury verdict against Local 287 and refused to dismiss the International Brotherhood of Teamsters from the case, leaving Graniterock several options to pursue claims against the International.
The Supreme Court�s decision was unanimous concerning the International. The court�s confirmation of Graniterock�s jury verdict was issued on a 7-2 vote.
Concrete ready-mix drivers represented by Teamsters Local 287 went on strike against Graniterock in June 2004. The strike forced more than 450 Graniterock team members from their jobs, Graniterock says, harming hundreds of families, the company�s customers and the company.
The company and the union settled the strike in the early morning hours of July 2, 2004, with the union agreeing to return to work immediately. After ratifying a collective bargaining agreement that contained a no-strike clause, the union refused to allow its members to return to work unless the company agreed to release the union for damage claims and unfair labor practice charges that arose during the strike, Graniterock says.
The Teamsters Union demanded the release for the benefit of the union locals, as well as the International. When Graniterock refused to provide the release, the strike continued for more than two months.
Graniterock filed an action against Local 287 and the International Brotherhood of Teamsters in U.S. District Court in San Jose, alleging that the Local violated the no-strike clause of the newly-ratified agreement, and that the International was orchestrating the continued strike for its own benefit (to obtain the release).
The District Court dismissed Graniterock�s claims against the International, ruling that those claims were preempted by federal labor law. The claims against the Local proceeded to a jury trial on the issue of whether the collective bargaining agreement negotiated in July had actually been ratified by the Local membership. The jury reached a unanimous verdict in favor of Graniterock, finding that the agreement had in fact been ratified.
The Local union appealed this jury verdict, claiming the issue of whether the contract was ratified should have been heard in arbitration, not by a jury. Graniterock appealed the court�s dismissal of its claims against the International. The Ninth Circuit Court of Appeal ruled in favor of the unions on both issues. Graniterock petitioned the Supreme Court for review of the Ninth Circuit�s ruling.
The Supreme Court upheld Graniterock�s 2008 jury verdict against Local 287, turning away the union�s argument that the decision should have been made by an arbitrator rather than the jury.
On the second issue, the Court held that federal law does not provide a shield for an international union that uses its influence over a local union to injure an employer. While the Court declined to recognize a new federal tort cause of action, the Court stated this �does not mean that we approve of the IBT�s alleged actions.� Accordingly, the Court held that Graniterock may still seek its damage claims from the 2004 strike. The Court described several avenues that Graniterock could pursue against the International.
The 2004 strike has already been determined to have been unlawful by the National Labor Relations Board, a decision that was affirmed by a court of appeal. Graniterock�s attorneys labeled the International�s conduct �extortion� during oral argument before the high Court. As the Supreme Court stated in the Opinion, �Graniterock describes a course of conduct that does indeed seem to strike at the heart of the collective bargaining process federal labor laws were designed to protect.�
Graniterock is seeking significant strike cost reimbursement, including back pay for team members.
Graniterock was represented by Garry Mathiason of Littler Mendelson in San Francisco and Arthur Miller, professor of law at New York University.
�We are in the process of thoroughly reviewing the Court�s decision,� says Mathiason. �The Supreme Court has actually opened the door to additional legal steps that we can now take, and we will carefully evaluate those and decide on the best course of action.�
Graniterock�s case was selected for review by the Supreme Court in June 2009, one of 75 selected from 10,000 cases annually considered for review. Graniterock and the Union appeared before the Court in oral argument in January 2010. The Court�s decision concerning the International was unanimous. Justices Sotomayor and Stevens dissented from the portion of the decision concerning arbitration.
The U. S. Chamber of Commerce, the National Association of Manufacturers, the Associated General Contractors of America and the Center for National Labor Policy submitted amicus curiae briefs to the Court with legal arguments supporting Graniterock�s position. The AFL-CIO submitted an amicus brief supporting the Teamsters Union.