Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Lucas Flour Co.

Supreme Court of the United States · 1962 · Federal Courts

Federal CourtsLabor LawSection 301Federal common lawArbitrationPreemptionLMRA § 301state court jurisdiction

Facts

The union and employer were parties to a collective bargaining agreement covered by the National Labor Relations Act. After the employer discharged employee Welsch for unsatisfactory work following damage to a fork-lift truck, the union called an eight-day strike to force his rehiring. The contract required disputes of interpretation and differences between employer and employee to be submitted to arbitration, with final and binding decisions, and one provision also stated that during such arbitration there would be no suspension of work. After the strike ended, the discharge dispute was arbitrated, and the arbitrators found Welsch's work unsatisfactory and upheld the discharge.

Issue

When a state court hears a suit under § 301(a) involving an alleged breach of a collective bargaining agreement, must it apply federal labor law rather than local state law? And under that federal law, does a strike over a dispute expressly subject to final and binding arbitration breach the agreement even absent an explicit no-strike clause specifically covering the dispute?

Rule

State courts have jurisdiction over § 301(a) suits, but they must apply substantive federal labor law, which prevails over inconsistent local rules. Under that federal law, when a collective bargaining agreement requires a dispute to be settled exclusively by compulsory final and binding arbitration, a strike to settle that dispute is a violation of the agreement, even without an express no-strike clause covering the subject of the strike.

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Cedar Valley Milling, a fictional grain processor in Wichita, signed a collective bargaining agreement with Dockworkers Local 88. After a work stoppage, Cedar Valley sued the union in Kansas state court for damages, and Kansas contract law would excuse the stoppage while federal labor law would not.

Which law should the Kansas court apply to decide the breach-of-contract claim?

Explanation. When a suit falls within § 301(a) as an action for violation of a collective bargaining agreement, state courts may hear it, but they must apply substantive federal labor law. The majority stressed that inconsistent local doctrines must give way because collective bargaining agreements require nationally uniform interpretation and enforcement.