2. Federal Preemption Doctrine.
There are three major strands of federal labor law preemption doctrine, one based upon § 301 of the Labor Management Relations Act (LMRA) and two based upon §§ 7 and 8 of the NLRA. It is the § 301 doctrine which is the source of greatest contention in this case, but NLRA §§ 7 and 8 preemption issues arise as well.
a. LMRA Section 301 Preemption
Section 301 preemption doctrine was established in Textile Workers v. Lincoln Mills, 353 U.S. 448, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957), and was developed significantly in Teamsters v. Lucas Flour Co., 369 U.S. 95, 7 L. Ed. 2d 593, 82 S. Ct. 571 (1962). The Lucas Flour Court held that § 301 reflected an intention to have a single federal law of CBA interpretation. For this reason, CBA interpretation was held to be a matter for the labor arbitrator, the National Labor Relations Board, and the federal court. The parties to a CBA are not allowed to bypass the arbitration process by filing a claim, such as one for breach of the CBA, in state court. For the employee to do so was also seen as undermining the central role of the labor arbitrator as the primary interpreter of the CBA.
Allis-Chalmers v. Lueck, 471 U.S. 202, 212, 105 S. Ct. 1904, 85 L. Ed. 2d 206 (1985) held that the state court is preempted from hearing cases, even if based in part on state law, if the state claim is "inextricably intertwined with consideration of the terms of the labor contract." Such cases must be heard by the labor arbitrator. Id. at 213. In Allis-Chalmers, the employee instituted a state tort action against his employer in state court. However, the duty establishing the tort ultimately derived from "the rights and obligations established by the contract." Id. at 217. The Supreme Court therefore held that the state court was preempted from hearing the tort action "because the right asserted not only derives from the contract, but is defined by the contractual obligation of good faith, any attempt to assess liability here inevitably will involve contract interpretation." Id. at 218.
The Court also noted that an identical claim could have been brought before the arbitrator based upon CBA provisions.
The defendant argues that we should follow Allis-Chalmers in the instant case, and require Ms. Livadas to bring her claim before the labor arbitrator. The defendant argues that enforcement of the state provision at issue for employees working under a CBA would be "inextricably intertwined with consideration of the terms of the labor contract." Id. at 213. The defendant reads Allis-Chalmers too broadly, as is clear from subsequent cases.
In the case of Karen Livadas, the right she seeks to have vindicated does not derive from her contract, but rather, from state law. State law requires the employer to make full payment of wages due to a discharged employee upon termination. Failure to comply with this provision results in penalties. The simple question of whether the statute was violated can be determined wholly independently from the CBA. Karen Livadas was not paid until three days after her termination. It requires reference only to a calendar, not to the CBA, to determine that the statute was violated and penalties are due.
Also, unlike the employee in Allis-Chalmers, Livadas could not have brought this claim to the arbitrator. The arbitrator may base her decisions solely upon the terms of the CBA, and not upon public law. Alexander v. Gardner-Denver Company, 415 U.S. 36, 53-54, 39 L. Ed. 2d 147, 94 S. Ct. 1011 (1974). Since the CBA contains no term requiring wage payment immediately upon termination, and imposes no penalty for failure to make such timely payment, there would be no arbitrable issue.
Later cases are in accord with this reading. In Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 100 L. Ed. 2d 410, 108 S. Ct. 1877 (1988), a unanimous Supreme Court held that a union employee was not preempted from bringing a state tort claim alleging that the employer had retaliatorily discharged the employee who had filed a worker's compensation claim. The claim was not preempted even though the employee could and did file a concurrent claim with the labor arbitrator under a CBA provision prohibiting discharge without just cause, and even though both claims were based on the same set of events.
The Court held that the state law action was not preempted because it involved a "purely factual inquiry [which did] not turn on the meaning of any provision of a collective-bargaining agreement. Thus, the state-law remedy in this case is 'independent' of the collective-bargaining agreement in the sense of 'independent' that matters for § 301 preemption purposes . . ." Id. at 407.
In Operating Engineers v. Wilson, 915 F.2d 535 (9th Cir. 1990) the Ninth Circuit held that a state law claim for fraud in the inducement of a collective bargaining agreement was not preempted by § 301. In Operating Engineers an employer claimed that a union agent had fraudulently induced him to sign a collective bargaining agreement. The Court, relying on the reasoning of Lingle, held that the "state tort claim for fraud in the inducement [of the collective bargaining agreement] is not preempted by section 301 because it does not require reference to the collective bargaining agreement." Id. at 539.
Our case is quite similar. The state law question can be resolved based on a "purely factual inquiry," Lingle, 108 S. Ct. at 1882, of whether the wage payment was made at the time of termination. There is no question that it was not. There is no need to refer to the terms of the CBA to resolve this question.
The defendant argues that penalties under the state statute are based upon wages. The statute provides that the employee is entitled to continue to receive wages until the employer remits the last wage payment. The defendant argues that determination of penalties would therefore require interpretation of the CBA, which is preempted, and should be a matter for the labor arbitrator.
Lingle, resolves this issue by holding that "tangential" issues, such as damages in a state law action, may be determined without preemption:
A collective-bargaining agreement may, of course, contain information such as rate of pay and other economic benefits that might be helpful in determining the damages to which a worker prevailing in a state law suit is entitled. Although federal law would govern the interpretation of the agreement to determine the proper damages, the underlying state law claim, not otherwise pre-empted, would stand . . . the separate state law analysis would not be thereby pre-empted.