Labor Law – Federal Pre-Emption – Limitations on State Jurisdiction in Causes Arising Out of Labor Disputes

Respondent employers refused to enter a union shop agreement with the petitioning unions, who then began to picket peacefully and to exert pressure on respondents’ suppliers and customers to persuade them to cease dealing with respondents. Respondents initiated a representation proceeding before the NLRB, which declined jurisdiction on the ground respondents’ business did not have a sufficient effect on commerce to meet the NLRB’s self-imposed jurisdictional standards. Respondents then sought and obtained damages and an injunction in the California courts. On certiorari to the United States Supreme Court the injunction order was reversed, but the question of damages was remanded to the state court since it was unclear whether the damages were sustained under California or federal law. The state court sustained the damages on the basis of state law. On certiorari to the United States Supreme Court, held, reversed, four justices concurring in result only. Absent an NLRB determination that an activity is neither protected nor prohibited, or compelling precedent applied to essentially undisputed facts, state courts have no jurisdiction to award damages for losses arising out of such activity even if based on tort liability theories under state law. San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959).