Laval un Partneri Ltd. v. Svenska Byggnadsarbetareförbundet

Laval un Partneri Ltd. (Laval) (plaintiff) was a Latvian company working on renovations to a school in the Swedish town of Vaxholm. Laval sought to use Latvian workers for the project. Before beginning work, Laval negotiated with Svenska Byggnadsarbetareförbundet (Swedish union) (defendant) regarding wage rates for workers on the project. Swedish labor law did not generally provide for wages; instead, the Swedish union would negotiate with Swedish management representatives to determine the appropriate rate of pay. If those negotiations failed in the domestic context, there was a default wage set (as opposed to the union taking collective action like a strike). But Laval was not bound by that agreement, and the parties failed to reach an agreement, so Laval signed a collective-bargaining agreement with a different Latvian trade union. In response, the Swedish union took collective action again Laval by blockading the Vaxholm worksite and preventing the delivery of goods to the Laval workers. This was in contrast to the domestic process in Sweden, which would have led to a default wage if negotiations failed. Sympathy actions by other unions followed. Laval could not work due to these actions, so Vaxholm terminated the contract. Laval sued and claimed that these actions violated Articles 56 and 57’s right to free movement of services of the Treaty on the Functioning of the European Union (TFEU).