The Supremes recently heard attorneys argue whether Section 301 of the Labor-Management Relations Act, which allows federal courts to hear lawsuits "for violation of contracts" between employers and labor unions, gave a court jurisdiction to hear a claim that the International Brotherhood of Teamsters interfered in contract talks between a California company and a Teamsters
local.
Granite Rock Co. counsel argues lower courts improperly denied the company an opportunity to pursue a tort claim against the IBT. He says the claim was "grounded" in the local union's collective bargaining agreement and therefore fell within the scope of Section 301.
IBT argues that allowing Granite Rock to pursue a tort claim under a statute that refers only to the enforcement of contracts would effect a "big change" in the framework that Congress has established. Major issues of labor law "such as ... economic weapons that parties can use should be decided by Congress through statute and by the National Labor Relations Board through the application of the statute."
But several justices question whether failing to allow such claims would leave
employers without redress for misconduct by international unions.
Granite Rock Co. v. Int'l Bhd. of Teamsters, U.S., No. 08-1214, oral
argument 1/19/10
The Supremes also denied review of a 401(k) plan fees case against Deere & Co. that has drawn a considerable amount of attention after the Seventh Circuit last year upheld the dismissal of fiduciary breach claims against Deere. Basically, the lower court found that providing a very expansive list of mutual funds for 401k participants, satisfied the plan administrator/employer's duty of fiduciary care to plan participants.
The denial of Supreme Court review comes as a surprise to many as the case has spawned a large-scale debate among ERISA practitioners, fiduciaries, and academics over the fiduciary responsibilities tied to the investment choices made for 401(k) plans. In my opinion, the Supremes passed up a good opportunity to offer some much needed guidance to the community.
Hecker v. Deere & Co., U.S., No. 09-447, cert. denied 1/19/10
