and Submitted November 6, 2015 Portland, Oregon
from the United States District Court for the District of
Oregon, D.C. Nos. 6:12-cv-02082-TC, 3:12-cv-00683-MO,
3:12-cv-00402-ST Thomas M. Coffin, Magistrate Judge,
Presiding, Michael W. Mosman, District Judge, Presiding,
Janice M. Stewart, Magistrate Judge, Presiding
K. Doyle (argued), Bennett, Hartman, Morris & Kaplan,
Portland, Oregon, for Plaintiff-Appellant Susan Kobold.
Peterson (argued), Bullard Law, Portland, Oregon, for
Defendant-Appellee Good Samaritan Regional Medical Center.
Elizabeth Farrell Oberlin (argued), Portland, Oregon;
Benjamin Rosenthal, Portland, Oregon; for
Plaintiffs-Appellants Larry Barr, et al.
H. Doshi (argued) and Kamyavathana Sivanesan, Portland,
Oregon; Sheeba Suhaskumar, law student; Northwestern School
of Law of Lewis & Clark College, Portland, Oregon; for
Defendant-Third-Party-Plaintiff-Appellee Ross Island Sand
& Gravel Co.
Matthew Caruso Ellis (argued), Portland, Oregon; George P.
Fisher, Portland, Oregon; for Plaintiff-Appellant Ona C.
Kitchel (argued), James N. Westwood, and Brenda K. Baumgart;
Stoel Rives LLP, Portland, Oregon; for Defendant-Appellee
Northwest Permanente, P.C.
Before: Marsha S. Berzon and Paul J. Watford, Circuit Judges,
and James Alan Soto, [*] District Judge.
panel ordered consolidated three appeals involving employees
represented by labor unions who sought remedies under state
law against their employers; affirmed the district
court's grant of summary judgment to the employer in the
first appeal; affirmed in part and reversed and remanded in
part in the second appeal; and affirmed in the third appeal.
three cases, there was a collective bargaining agreement
("CBA") between the union and the employer setting
out a grievance and arbitration procedure to govern disputes
arising under the agreement. And in all three, a grievance
was filed but did not provide full relief, prompting the
employee to turn to the courts. All the employees initially
filed their cases in state court, but the cases were removed
to federal court on the basis of preemption under § 301
of the Labor Management Relations Act. In all the cases, the
district court denied a motion to remand and held the state
law claims preempted.
law claim is preempted if it either involves a right
conferred upon an employee solely by virtue of a CBA or is
substantially dependent on analysis of a CBA.
first case, the panel held that assuming Or. Rev. Stat.
§§ 652.120 and 652.615 conferred upon a nurse the
right to receive premium pay for extra shifts worked, that
right was substantially dependent on an analysis of the terms
of a CBA in order to determine which shifts qualified for
premium pay. Accordingly, the state law claims were preempted
by § 301. The plaintiff could not pursue her claims
under § 301 because she did not exhaust her remedies
under the CBA and did not allege that her union breached its
duty of fair representation. In the second case, the panel
reversed in part, holding that claims for violation of Or.
Rev. Stat. § 652.610(4) (establishing time limits
regarding CBA-authorized paycheck deductions) and breach of
fiduciary duty were not preempted. The panel affirmed as to a
claim for money received. The panel concluded that §
652.610(4) conferred a right independent of the
plaintiffs' rights under a CBA, and this right was not
substantially dependent on analysis of the CBA. The breach of
fiduciary duty claim also was not preempted, but the claim
for money received was not independent of the CBA and
therefore was preempted. The panel remanded for the district
court to decide whether to exercise supplemental jurisdiction
over the non-preempted claims.
third case, the panel affirmed the district court's
denial of the plaintiff's motion to remand and its grant
of summary judgment in favor of the defendant. The panel held
that judicial estoppel did not bar the plaintiff, a nurse
practitioner, from arguing for remand to state court on the
ground that a CBA did not govern a credentialing decision
because the contrary position had been taken by the
plaintiff's union, not the plaintiff herself, during
arbitration. The panel held that in light of the
arbitrator's decision that the credentialing decision
must be evaluated under the CBA, the plaintiff's claim
for intentional interference with economic relations arose
out of the CBA, and thus was preempted. Affirming the
district court's summary judgment on a non- preempted
defamation claim, the panel held that the claim was
BERZON, Circuit Judge:
three cases in this consolidated appeal-Kobold v. Good
Samaritan Regional Medical Center, Barr v. Ross
Island Sand & Gravel Co., and Allen v. Northwest
Permanente-involve different parties and facts, but are
similar in important ways. All three involve employees
represented by labor unions who seek remedies under state law
against their employers. In all three, there is a collective
bargaining agreement ("CBA") between the union and
the employer setting out a grievance and arbitration
procedure to govern disputes arising under the agreement. And
in all three, a grievance was filed but did not provide full
relief, prompting the employee to turn to the courts. All the
employees initially filed their cases in state court, but the
cases were removed to federal court on the basis of
preemption under § 301 of the Labor Management Relations
Act ("LMRA"), 29 U.S.C. § 185(a). In all the
cases, the district court denied a motion to remand and held
the state law claims preempted. We consider the § 301
preemption questions on appeal.
court has observed more than once, although § 301
preemption questions arise fairly frequently,
"[f]amiliarity . . . has not bred facility."
Cramer v. Consol. Freightways, Inc., 255 F.3d 683,
689 (9th Cir. 2001) (en banc) (alteration in original)
(quoting Galvez v. Kuhn, 933 F.2d 773, 774 (9th Cir.
1991)). In the hope that doing so will illuminate the
parameters of § 301 preemption analysis, and so help
"[breed] facility, " id., we have
consolidated the three cases for consideration and resolve
them in this single opinion. We begin with a review of §
301 preemption doctrine and then proceed to discuss each
Section 301 Preemption
301 of the LMRA states: "Suits for violation of
contracts between an employer and a labor organization
representing employees in an industry affecting commerce . .
. may be brought in any district court of the United States
having jurisdiction of the parties." 29 U.S.C. §
face, § 301 reads as a jurisdictional statute. But not
long after its passage, the Supreme Court held, in
Textile Workers v. Lincoln Mills of Ala., 353 U.S.
448, 451 (1957), that § 301 is not simply
jurisdictional. Instead, it should be "understood . . .
as a congressional mandate to the federal courts to fashion a
body of federal common law to be used to address disputes
arising out of labor contracts." Allis-Chalmers
Corp. v. Lueck, 471 U.S. 202, 209 (1985). "The
Court subsequently held that this federal common law preempts
the use of state contract law in CBA interpretation and
enforcement." Cramer, 255 F.3d at 689 (citing
Local 174, Teamsters of Am. v. Lucas Flour Co., 369
U.S. 95, 103-04 (1962)). "Once preempted, 'any claim
purportedly based on [a] . . . state law is considered, from
its inception, a federal claim, and therefore arises under
federal law.'" Burnside v. Kiewit Pac.
Corp., 491 F.3d 1053, 1059 (9th Cir. 2007) (alteration
in original) (quoting Caterpillar, Inc. v. Williams,
482 U.S. 386, 393 (1987)).
addition to promoting the development of a uniform federal
labor law, § 301 preemption doctrine is designed
"in large part to assure that agreements to arbitrate
grievances would be enforced, regardless of the vagaries of
state law and lingering hostility toward extrajudicial
dispute resolution." Livadas v. Bradshaw, 512
U.S. 107, 122 (1994). To give "the policies that animate
§ 301 . . . their proper range, " the Supreme Court
has expanded "the pre-emptive effect of § 301 . . .
beyond suits alleging contract violations" to state law
claims grounded in the provisions of a CBA or requiring
interpretation of a CBA. Lueck, 471 U.S. at 210-11.
"not every dispute concerning employment, or
tangentially involving a provision of a collective-bargaining
agreement, is pre-empted by § 301." Id. at
211. Drawing on Supreme Court precedent, this court has
articulated a two-step inquiry to analyze § 301
preemption of state law claims. First, a court must determine
"whether the asserted cause of action involves a right
conferred upon an employee by virtue of state law, not by a
CBA. If the right exists solely as a result of the CBA, then
the claim is preempted, and [the] analysis ends there."
Burnside, 491 F.3d at 1059. If the court determines
that the right underlying the plaintiff's state law
claim(s) "exists independently of the CBA, " it
moves to the second step, asking whether the right "is
nevertheless 'substantially dependent on analysis of a
collective-bargaining agreement.'" Id.
(quoting Caterpillar, 482 U.S. at 394). Where there
is such substantial dependence, the state law claim is
preempted by § 301. If there is not, then the claim can
proceed under state law. Id. at 1059-60.
determine whether a right is independent of a CBA-the first
Burnside factor-a court must focus its inquiry on
"the legal character of a claim, as
'independent' of rights under the
collective-bargaining agreement and not whether a grievance
arising from 'precisely the same set of facts' could
be pursued." Livadas, 512 U.S. at 123 (emphasis
added) (internal citation omitted). Only if the claim is
"founded directly on rights created by [a]
collective-bargaining agreement" does § 301
preempt it. Caterpillar, 482 U.S. at 394.
second Burnside factor-whether a plaintiff's
state law right is "substantially dependent on analysis
of [the CBA], " Burnside, 491 F.3d at
1059-turns on "whether the claim can be resolved by
'look[ing] to' versus interpreting the CBA. If the
latter, the claim is preempted; if the former, it is
not." Id. at 1060 (quoting Livadas,
512 U.S. at 125) (alteration in original). This court has
previously "stressed that, in the context of § 301
complete preemption, the term 'interpret' is defined
narrowly-it means something more than 'consider, '
'refer to, ' or 'apply.'" Balcorta
v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1108
(9th Cir. 2000). And, notably, "a defendant
cannot, merely by injecting a federal question into an action
that asserts what is plainly a state-law claim, transform the
action into one arising under federal law."
Caterpillar, 482 U.S. at 399. In other words,
"[i]f the claim is plainly based on state law,
§ 301 preemption is not mandated simply because the
defendant refers to the CBA in mounting a defense."
Cramer, 255 F.3d at 691 (emphasis added).
Burnside factors reflect two driving concerns of
preemption doctrine: first, preventing "parties'
efforts to renege on their arbitration promises by
'relabeling' as tort suits actions simply alleging
breaches of duties assumed in collective-bargaining
agreements, " Livadas, 512 U.S. at 123
(citation omitted), and second, preserving "a central
tenet of federal labor-contract law . . . that it is the
arbitrator, not the court, who has the responsibility to
interpret the labor contract in the first instance, "
Lueck, 471, U.S. at 220.
there is no basis for scuttling the state law cause of action
if any necessary CBA interpretation can in some fashion be
conducted via the appropriate grievance/arbitration forum. To
allow such scuttling disadvantages employees covered by CBAs,
as they lose state law protections because of an embedded CBA
issue possibly peripheral to their core cause of action. The
interest in sending substantial CBA issues through
grievance/arbitration does not justify creating this
disadvantage unless the interest cannot be otherwise
accommodated. There are, accordingly, circumstances in which
preemption can be avoided by accepting an arbitrator's
interpretation of the CBA. In some instances, for example, an
arbitrator's interpretation of the CBA may determine
whether an employee's otherwise independent state law
claim in fact asserts a right created by the CBA.
See Section IV.C, infra.
once a state law claim has been found substantially dependent
upon analysis of a CBA under the second prong of
Burnside, most often "that claim must either be
treated as a § 301 claim, or dismissed as pre-empted by
federal labor-contract law." Lueck, 471 U.S. at
220 (internal citation omitted). Under a collective
bargaining agreement like the ones in these cases, an
employee usually cannot succeed in a suit under § 301 to
vindicate personal contract-based rights unless the
contractual grievance-arbitration procedure is invoked on her
behalf or on behalf of a group of employees of which she is
part. If the dispute is not ultimately resolved by an
arbitration, the employee must establish that the union
violated its duty of fair representation by failing to pursue
the grievance to arbitration, or pursuing it arbitrarily.
See Air Line Pilots Ass'n, Int'l v.
O'Neill, 499 U.S. 65, 67 (1991); Vaca v.
Sipes, 386 U.S. 171, 190-91 (1967). And, where the
remedies provided in the CBA have been exhausted, judicial
review is extremely limited. See United Paperworkers
Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 36
(1987); Sw. Reg'l Council of Carpenters v. Drywall
Dynamics, Inc., 823 F.3d 524, 530 (9th Cir 2016) (noting
that "courts reviewing labor arbitration awards afford a
'nearly unparalleled degree of deference' to the
arbitrator's decision" (quoting Stead Motors of
Walnut Creek v. Auto. Machinists Lodge No. 1173, Int'l
Ass'n of Machinists & Aerospace Workers, 886
F.2d 1200, 1205 (9th Cir. 1989) (en banc))).
this doctrinal backdrop, we proceed to the specifics of each
Kobold v. Good Samaritan Regional Medical Center
Factual and Procedural History
Sue Kobold worked as an operating room nurse for
Defendant-Appellee Good Samaritan Regional Medical Center
("Good Samaritan") beginning in 1996. Nurses at
Good Samaritan, including Kobold, are represented by a union,
the Oregon Nurses Association ("ONA"). Their terms
and conditions of employment are negotiated between Good
Samaritan and ONA and spelled out in a collective bargaining
agreement ("GS CBA").
CBA provides that nurses who work extra shifts receive
premium pay at one and one-half times the regular rate. In
early 2010, Kobold learned that for more than one year Good
Samaritan had not paid her the premium rate for extra shifts
worked. It appears, although the record is not clear, that
Kobold discovered the problem when the operating room manager
informed her that Good Samaritan would only pay the regular
rate, not the premium rate, to nurses who signed up to work a
surgical technician's "orphan" shifts-that is,
vacant shifts that cannot be covered by staff members within
the same team. Kobold believed that nurses who signed up to
work these orphan shifts should be paid the premium rate.
CBA prescribes a mandatory five-step grievance and
arbitration procedure for "[p]roblems arising in
connection with the application or interpretation of the
Agreement." ONA submitted a grievance regarding extra
shift premium pay, and Good Samaritan agreed prospectively to
change its practice and pay the premium rate for extra
operating room shifts. Good Samaritan refused, however, to
issue retroactive pay for extra shifts already worked. It
claimed that those shifts had been marked as regular pay in
the electronic scheduling software, so the nurses knew the
pay rate before signing up to work the shifts. After ONA
requested arbitration, the union and Good Samaritan settled
of the settlement, Good Samaritan paid Kobold $2, 216.68, the
equivalent of 45 days of premium pay. That payment was the
full amount to which Kobold was entitled under the GS CBA,
which authorizes grievances to be filed up to 45 days
following the occurrence of the matter being grieved. Because
Kobold believed she was entitled to more than 45 days of back
pay, she filed an action in state court.
asserted two causes of action in her complaint. First, she
alleged that Good Samaritan failed to pay all wages owed her
at each pay period, in violation of Or. Rev. Stat. §
652.120. Or. Rev. Stat. § 652.120(1) requires that
"[e]very employer shall establish and maintain a regular
payday, at which date the employer shall pay all employees
the wages due and owing to them." Second, she alleged
that Good Samaritan unlawfully deducted from her paycheck
amounts due and owing, in violation of Or. Rev. Stat. §
652.615. Or. Rev. Stat. § 652.615 creates a private
right of action for a violation of § 652.610(3), which
provides that "[a]n employer may not withhold, deduct or
divert any portion of an employee's wages unless" an
exception applies, one of which is that "[t]he deduction
is authorized by a collective bargaining agreement to which
the employer is a party." Or. Rev. Stat. §
652.610(3)(d). Kobold sought $24, 000 in unpaid wages, as
well as attorney's fees, costs, and disbursements.
Kobold filed her state court suit, Good Samaritan filed a
notice of removal, alleging that Kobold's state law
claims are preempted by § 301 of the LMRA. On the same
ground, Good Samaritan filed in federal court a motion to
dismiss or, in the alternative, a motion for summary
judgment. The magistrate judge determined that Kobold's
state law claims were preempted under § 301. He then
concluded that because Kobold failed to allege and could not
prove that she had exhausted her contractual remedies, and
also did not allege that ONA had breached its duty of fair
representation, she could not succeed on a claim under §
301. He thus recommended that Good Samaritan's motion for
summary judgment be granted. The district court adopted the
magistrate's findings and recommendation, granted Good
Samaritan's motion for summary judgment, and dismissed
the case. We affirm.
Kobold's State Law Claims Are Preempted by §
without deciding that ORS § 652.120 and § 652.615
independently confer upon Kobold the right to receive premium
pay for extra shifts worked, that right is substantially
dependent on an analysis of the terms of the GS CBA. Before a
court could calculate the total amount Kobold is
owed, it must determine which of the shifts she worked
qualified for premium pay. The Oregon statutes under which
Kobold seeks relief provide only that an employee be paid
"the wages due and owing to them." Or. Rev. Stat.
§ 652.120(1). They do not provide any means with which
to assess whether wages are "due and
owing." To answer that question, a court must consult
the GS CBA. In this case, because of a particular provision
of the GS CBA that is in dispute, a court must interpret, not
just refer to or look at, the GS CBA. See Burnside,
491 F.3d at 1060.
CBA provides that nurses are to be paid one and one-half
times their regular pay rate for all hours worked above their
regularly scheduled full-time equivalent shifts "except
when there is a change of schedule agreed upon by the Medical
Center and nurse." Thus, for Kobold to succeed on her
state law claim that she was not paid the premium rate for
extra shifts, a court must determine whether Kobold and Good
Samaritan agreed to a change of schedule.
or not there was an agreed upon change of schedule is exactly
what is in dispute between the parties. Good Samaritan argues
that Kobold is not entitled to premium pay because she agreed
to work the extra shifts "despite conspicuous notice
that the shifts would be paid at a regular rate." Kobold
contends that this reading of the agreement exception
"would undermine the purpose of ...