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AGC Persuades Supreme Court to Clarify Federal Remedies For Violations of Collective Bargaining Agreements

July 1, 2009

At AGC's urging, the U.S. Supreme Court has agreed to hear Granite Rock Company v. International Brotherhood of Teamster, a case that arose after that international union prevailed upon one of its locals to go on strike in violation of a newly ratified agreement between the local and the Granite Rock Company, a longstanding member of the AGC of California and AGC of America.   The case provides an opportunity for the Court to clarify the scope of Section 301 of the Labor Management Relations Act, which gives the federal courts exclusive jurisdiction over "[s]uits for violations" of collective bargaining agreements, and preempts any state law that purports to govern either the interpretation or the enforcement of such agreements. 

The international caused the unlawful strike to pressure the company to waive any liability that either the international or any one of its locals might have for any misconduct that had occasioned an earlier strike (called while the parties were negotiating the terms of the new agreement).  The international had actively participated in the collective bargaining process, providing strategic advice to the local, sending one of its agents to the bargaining sessions and even asserting that it had the authority to negotiate without the local's approval, but the international did not become a party to the new agreement.  The question that the case therefore raises, and that the Court has now agreed to address, is whether the company can nevertheless hold the international liable for causing the local to strike in violation of the no-strike clause included in the new agreement.

The lower federal courts have taken several different positions on Section 301.  Some have suggested that it gives the federal courts jurisdiction only over cases brought against the parties to collective bargaining agreements.  Others have taken the slightly broader view that the federal courts also have jurisdiction over cases brought against non-parties if they are accused of violating rights arising out of such agreements.   Still others have held that the federal courts have jurisdiction over anyone who wrongly interferes with the relationship between the parties to such agreements.

The case is an important one because the preemptive effect of Section 301 is well-established.  Unless the federal courts have broad jurisdiction to fashion appropriate remedies for wrongful interference with the contractual relationships between unions and employers, the parties will have no legal recourse for such interference.  In a friend-of-the-court brief that AGC filed with the Supreme Court, AGC warned the great danger of creating "a practical 'no-man's land' in federal labor law." The Court has yet to set the briefing schedule for the case, which case also raises questions about the scope of any arbitration that the federal courts can order.  Most likely, the parties will brief and argue the case in the fall, and the Court will render its decision sometime after the first of the year. For more information, contact Mike Kennedy at (703) 837-5335 or kennedym@agc.org.
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