Local 174, Teamsters v. Lucas Flour Co.

Lucas Flour Company (Lucas) (defendant) employed members of Local 174 (the union) (plaintiff). Lucas and the union were parties to a collective-bargaining agreement (CBA) providing that Lucas reserved the right to discharge any employee for unsatisfactory work. The CBA provided that any disputes regarding the interpretation of the CBA would be settled by binding arbitration and that there would be no suspension of work during the arbitration. The CBA further provided that any disputes between Lucas and an employee arising under the CBA would be settled by binding arbitration. That provision contained no work-suspension language. In May 1958, Lucas discharged its employee Welsch after Welsch damaged one of Lucas’s new forklifts. Lucas told the union that Welsch had been discharged because of unsatisfactory work, but the union called a strike to force Lucas to rehire Welsch. After an eight-day strike, the dispute regarding Welsch’s discharge was submitted to arbitration. The arbitration board eventually ruled that Welsch had been discharged for unsatisfactory work and that Welsch was not entitled to reemployment by Lucas. Meanwhile, Lucas had sued the union in Washington state court to recover damages for losses caused by the strike. The state court entered a judgment in Lucas’s favor, and the award was affirmed on appeal. The appellate court held that the state court’s jurisdiction over the dispute was not limited by § 301 of the Labor Management Relations Act, which provides a cause of action for violation of a CBA. The appellate court further held that under Washington state law, the strike had violated the CBA because the union had used the strike to try to coerce Lucas to forego its contractual right to discharge Welsch for unsatisfactory work. The United States Supreme Court granted certiorari. In proceedings before the Supreme Court, the union asserted that the Washington court had erred by applying state-law principles instead of federal labor law. The union further asserted that under federal law, the union’s strike did not violate the CBA because the CBA did not contain a no-strike clause explicitly prohibiting a strike in the event of a dispute over an employee’s discharge.