Labor & Employment Law Daily Teamsters union liable for damages flowing from breach of no-strike provision in CBA
Friday, November 2, 2018

Teamsters union liable for damages flowing from breach of no-strike provision in CBA

By Ronald Miller, J.D.

A union violated the no-strike provision of a collective bargaining agreement and was liable for all damages that flowed from that breach where its members refused to cross a picket line set up by another union, ruled a federal district court in Minnesota. The court first determined that the parties’ CBA prohibited union members from engaging in a sympathy strike. Further, because the strike was not a primary strike on the part of Local 120, it violated the no-strike clause in the parties’ agreement. Because the union failed to rebut the employer’s evidence that it suffered damages in excess of $1.2 million or offered an alternative damages model, the court concluded that an award of damages in the amount requested by the employer was appropriate (Sysco Minnesota, Inc. v. Teamsters Local 120, October 26, 2018, Magnuson, P.).

One-day picket. On the late afternoon of November 16, 2017, Teamsters Local 41 began a one-day picket at a Sysco food distribution center in Mounds View, Minnesota. But Local 41 did not represent employees at the facility and had no grievance with the employer. Rather, Local 41 represents employees at a different Sysco facility in Kansas City, Missouri, owned by a sister company.

Teamsters Local 120 represented the production, warehouse, and maintenance employees at the Minnesota facility. Employees refused to cross Local 41’s picket line, which was timed to interfere with the Thursday evening and Friday morning shifts. As a result, Sysco was unable to make its food deliveries to commercial customers preparing for the upcoming Thanksgiving holiday. Sysco claimed that it suffered more than $1.2 million in lost profits and lost customers as a result of the strike. Local 120 did not have any labor grievance with Sysco, and had in fact signed a new four-year collective bargaining agreement several months before the incident.

No-strike clause. Sysco brought this suit against Local 120 claiming that its participation in the strike breached the parties’ CBA. The CBA contained two relevant provisions. Article 23 provided that there would be no lockout, strike, or any other interference with the operation of the business during the life of the agreement. Article 24 provided that no employee would be required to go through a primary picket line where a union was on primary strike. Additionally, the CBA established a grievance procedure, including for any controversy arising as to the interpretation or application or compliance with the provisions of the CBA.

The parties filed cross-motions for summary judgment. Sysco contended that there was no genuine issues of fact that Local 120 violated Article 23 and therefore was liable for its damages. Local 120 countered that Sysco failed to exhaust its arbitral remedy under the CBA and asked the court to stay the matter pending arbitration. In the alternative, Local 120 contended that the undisputed evidence established that this was a “sympathy strike” authorized by Article 24.

Waiver of arbitration. Local 120 contended that the case should be dismissed for Sysco’s failure to exhaust administrative remedies under the CBA. However, Sysco argued that the union waived its right to arbitration by litigating this matter for eight months, including extensive discovery, before raising the arbitration issue. Here, the court determined that the union had waived its right to pursue arbitration. Although it raised arbitration as a defense in its Rule 26(f) report early in the case, the union did not attempt to compel Sysco to arbitrate this dispute. Its response to Sysco’s summary judgment motion argued the merits before offering arbitration as a second alternative. Because the union did not do all it reasonably could have been expected to do to secure arbitration rights, its motion on this point was denied.

Breach of contract. Next, Local 120 contended that it did not violate the CBA because Article 24 protects union workers from repercussions if they refuse to cross “a primary picket line where a union was on primary strike.” According to Local 120, Local 41’s strike was a primary strike that was extended from its Missouri facility to the facility in Minnesota. For its part, Sysco argued that the CBA’s use of the term “primary” limits the protection to strikes by other unions at the unionized workers’ location and does not cover sympathy strikes.

The LMRA, 29 U.S.C. § 158(b)(4)(B), provides that labor actions against entities for whom a union is not a certified bargaining representative are unlawful, except primary strikes or primary picketing. Those few cases discussing the meaning of “primary” indicate that “primary” does not apply to strikes such as the one at issue here. Local 120 did not disagree, describing the work stoppage here as an “extension” of Local 41’s primary strike rather than as a primary strike. It also contended that the action here was a sympathy strike. The NLRA protects the right of unionized workers to engage in a sympathy strike.

However, here, the CBA clearly and unambiguously waived Local 120’s right to engage in sympathy strikes. Having conceded that the strike was a sympathy strike, not a primary strike, Local 120 could not escape the CBA’s prohibition on any non-primary-strike work stoppages. Finding that the language of the CBA was subject to one interpretation—any work stoppage that is not a primary strike is prohibited—and because Local 120 violated Article 23’s strike prohibition, it was liable for all damages that flowed from that breach.

Damages. Sysco submitted extensive evidence regarding lost profits and lost customers. Further, its expert witness calculated its total damages at $1,238,315. Local 120 did not rebut this evidence or offer an alternative damages model for the court to use in calculating Sysco’s damages. Consequently, an award of damages in the amount requested by Sysco was appropriate. Accordingly, Sysco’s motion for summary judgment was granted and the union’s motion for summary judgment was denied.

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