C# Linq List in other list

No, it's not a union. The simplest approach is to check whether there's anything in listB which isn't in listA:

var result = !listB.Except(listA).Any();

In other words, if you took everything from listA away from listB, would there be anything left or not?

Or of course you could do it more explicitly:

// Optional: makes the Contains check quicker.
var setA = new HashSet<string>(setA);
var result = listB.All(setA.Contains);