Baldwin v. Pirelli Armstrong Tire Corp. ( 1999 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
FILED
February 18, 1999
SCOTT BALDWIN, J. L. SMITH, and ) Cecil Crowson, Jr.
KEVIN T. BROWN, individually and ) Appellate Court Clerk
on behalf of a class of individuals )
similarly situated, )
)
Plaintiffs/Appellants, ) Appeal No.
) 01-A-01-9804-CV-00195
VS. )
) Davidson Circuit
PIRELLI ARMSTRONG TIRE ) No. 95C-3232
CORPORATION, UNITED RUBBER, )
CORK, LINOLEUM AND PLASTIC )
WORKERS OF AMERICA, AND )
URW LOCAL UNION 670, )
)
Defendants/Appellees. )
APPEALED FROM THE CIRCUIT COURT OF DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE THOMAS W. BROTHERS, JUDGE
FOR APPELLANTS: FOR APPELLEE PIRELLI
ARMSTRONG TIRE CORP.:
Jeffrey A. Greene
John W. Barringer, Jr. Charles Hampton White
Goodlettsville, Tennessee Richard L. Colbert
Nashville, Tennessee
Robert L. Delaney
Nashville, Tennessee FOR APPELLEE UNITED RUBBER,
CORK, LINOLEUM and PLASTIC
WORKERS OF AMERICA:
Charles R. Armstrong
Akron, Ohio 44320
FOR APPELLEE URW
LOCAL UNION 670:
George E. Barrett
Phillip A. Purcell
Nashville, Tennessee
REVERSED AND REMANDED
BEN H. CANTRELL,
PRESIDING JUDGE, M.S.
OPINION
When replacement workers were fired to make room for the returning
union employees at the end of a strike, the replacement workers brought suit against
the employer for breach of contract and retaliatory discharge, and against the local
and international unions for intentional interference with their contract. The trial court
granted the employer’s motion to dismiss the breach of contract count, because it
believed the individual contracts had been subsumed into the collective bargaining
agreement, but it overruled the motion to dismiss the retaliatory discharge count. The
court granted the unions’ motion to dismiss, because it believed the complaint did not
state a cause of action for intentional interference with an employment at will contract.
We reverse the judgment of the trial court.
I.
a. The Facts
Since this case was decided on a motion to dismiss we take the facts
from a liberal construction of the complaint, Huckeby v. Spangler, 521 S.W.2d 568
(Tenn. 1975), and we assume the facts in the complaint are true, Cornpropst v. Sloan,
528 S.W.2d 188 (Tenn. 1975).
The complaint alleges that Pirelli Armstrong Tire Corporation (Pirelli)
operated a manufacturing plant in Madison, Tennessee where substantially all of the
hourly workers were represented by the United Rubber, Cork, Linoleum and Plastic
Workers Union. The Pirelli workers were members of Local 670. In July of 1994, the
workers went out on strike. Pirelli hired some replacement workers, and after
declaring that the parties had “bargained to an impasse,” the company terminated the
strikers and began to hire “permanent” replacement workers. All the replacement
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workers were hired with an express or implied promise that they would not be
terminated solely to make room for the returning strikers.
In March of 1995, the union and the company entered into a new
collective bargaining agreement (CBA). The company began to rehire the union
members and, under pressure from the local and the national unions, to fire the
replacement workers for pretextual reasons. Ultimately all of the replacement workers
were fired.
b. The Procedural History
The named plaintiffs brought an action against the company for a breach
of contract and for a retaliatory discharge. The complaint sought to recover treble
damages from the unions for an intentional interference with the plaintiffs’ contract of
employment with the company. See Tenn. Code Ann. § 42-50-109
The defendants jointly removed the case to the federal district court, but
that court remanded the counts containing the causes of action referred to above.
The defendants then filed motions to dismiss under Rule 12.02(6), Tenn. R. Civ. Proc.
The trial judge overruled the company’s motion to dismiss the retaliatory discharge
claim but granted the motions as to the other counts.
II.
Retaliatory Discharge
We will deal first with the company’s contention that the trial judge erred
in failing to dismiss the claim for retaliatory discharge. The elements of such a cause
of action are fairly simple: “An employment at will relationship; a clear declaration of
public policy which imposes duties on the employee or employer; and discharge of the
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employee for refusing to violate those duties.” Reynolds v. Ozark Motor Lines, Inc.,
887 S.W.2d 822 at 825 (Tenn. 1994). The Reynolds court cited examples of a
retaliatory discharge from other jurisdictions where employees had been fired for:
refusing to commit perjury; refusing to ignore a lawful subpoena; refusing to ignore a
subpoena to jury duty; refusing to falsify records in product labeling; and refusing to
falsely certify that products had been tested when they had not. Id. at 824, citing
Chism v. Mid-South Milling Co., 762 S.W.2d 552 at 556 (Tenn. 1988). Our own cases
have recognized a case of retaliatory discharge where an employee has been fired
for making a workers’ compensation claim, Clanton v. Cain Sloan, 677 S.W.2d 441
(Tenn. 1984), and the legislature has decreed that “no employee shall be discharged
or terminated solely for refusing to participate in, or for refusing to remain silent about,
illegal activities.” Tenn. Code Ann. § 50-1-304.
In this case the complaint alleges the following facts:
As of the filing of this complaint, on information and
belief, none of the permanent replacement workers hired
during the strike for hourly-rate positions remain employed
by PIRELLI.
On information and belief, when negotiating the
new collective bargaining agreement ratified on March 27,
1995, representatives of PIRELLI, on the one hand, and
the URW and URW LOCAL 670, on the other hand,
discussed the issue of whether or not the jobs previously
vacated by striking URW members and filled by the
permanent replacement workers could be made available
to URW members following the end of the strike.
In the negotiations that resulted in the new
collective bargaining agreement ratified on March 27,
1995, PIRELLI and the URW and URW LOCAL 670
agreed that all striking members of the URW would be re-
hired by PIRELLI, despite and with full knowledge of the
fact that PIRELLI had already hired the permanent
replacement workers to fill the positions previously
occupied by striking members of the URW and URW
LOCAL 670.
On information and belief, after the end of the
strike and through the termination of the permanent
workers, the URW and URW LOCAL 670 did not permit
any person they knew to have been a permanent
replacement worker hired by PIRELLI during the strike to
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join the URW or URW LOCAL 670 in order to remain
employed at PIRELLI following the end of the strike.
In addition, in count one the complaint makes the following allegations:
Tennessee is a “right to work” state, in which it is
contrary to public policy for an employer either to refuse
to hire or to discharge an employee simply because the
employee is not a member of a labor union.
The “right to work” in Tennessee without being
compelled to belong to a labor union is a clear public
policy evidenced by the unambiguous statutory provision
of T.C.A. § 50-1-201 (1991).
PIRELLI’s termination of the permanent
replacement workers who are members of the Plaintiff
Class violated the “right to work” public policy of
Tennessee and was for this reason wrongful.
The members of the Plaintiff Class have suffered
damage as a result of their termination by PIRELLI.
The damages suffered by the members of the
Plaintiff Class include but are not limited to lost wages
and benefits, consequential damages and emotional
distress.
In terminating the members of the Plaintiff Class,
PIRELLI acted intentionally, fraudulently, maliciously
and/or recklessly because PIRELLI knew that it was a
violation of both Tennessee and federal law to terminate
employees based on the fact the employees were not
union members, but nevertheless did so alleging grounds
for termination which were known to be false in an effort
to cover up the real (but illegal) reason for termination. As
a result, PIRELLI is liable for punitive damages.
As we read the complaint it does not state a claim for a retaliatory
discharge. It does not allege that the replacement workers were fired for refusing to
join the union. The complaint alleges that the union and the company agreed that the
striking employees would be rehired. A necessary consequence of that agreement
was that the replacement workers had to go, but the connection between that fact and
union membership is not stated in the complaint.
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We take no position on whether the right to work law, Tenn. Code Ann.
§ 50-1-201, creates a private right of action for its violation. The appellants state
emphatically that they are not asserting a cause of action for violating the statute, but
they rely on the statute as a clear statement of public policy on which to base a claim
of retaliatory discharge.
III.
Breach of Contract
We are of the opinion that the complaint states a cause of action for
breach of contract. A fair reading of the complaint reveals that the plaintiffs alleged
(1) that they were hired with an express or implied promise that they would not be
fired in order to make room for the returning strikers (see paragraphs 41(a) and 54 of
the complaint), and (2) that the company breached that promise when it settled the
strike with the union. The company’s promises were more than a vague promise of
“permanent” employment which creates no more than an employment at will. See
Savage v. Spur Distributing Company, 228 S.W.2d 122 (Tenn. App. 1950).
The trial judge found, however, that the plaintiffs’ contract with the
company was subsumed into the collective bargaining agreement subsequently
entered into by the company and the union. From a reading of the cases we find that
the courts use that expression to indicate that the individual contracts were displaced
by the subsequent collective bargaining agreement (CBA) or that the dispute was
preempted by federal law.
a. The Displacement Issue
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The only authority cited by either the company or the union that the
individual contracts with the replacement workers were displaced by the CBA is Beals
v. Kiewit Pacific Co., 114 F.3d 892 (9th Cir. 1997). Beals is a preemption case in
which the Ninth Circuit held that an employee could not maintain a state action
seeking to enforce an employment contract entered into when the employer and the
union were operating under an existing CBA. To the extent that the separate contract
was inconsistent with the CBA, “the CBA controls and any claims seeking to enforce
the terms of the [separate contract] are preempted. 114 F.3d at 894.
The Beals court distinguished Caterpillar, Inc. v. Williams, 482 U.S. 386
(1987), in which the company allegedly entered into agreements with some of its
employees while they were in managerial positions. When the employees were later
downgraded to hourly positions, the company argued that “their individual employment
agreements were subsumed into, or eliminated by, the collective bargaining
agreement.” The court rejected this argument saying:
Thus, individual employment contracts are not inevitably
superseded by any subsequent collective agreement
covering an individual employee, and claims based upon
them may arise under state law. Caterpillar’s basic error
is its failure to recognize that a plaintiff covered by a
collective-bargaining agreement is permitted to assert
legal rights independent of that agreement, including
state-law contract rights, so long as the contract relied
upon is not a collective-bargaining agreement.
482 U.S. at 396.
Beals distinguished Caterpillar because it involved “an individual
employment contract negotiated for a position not covered by the CBA, at a time when
the employee was not covered by the CBA. 114 F.3d at 894. That is the situation
involved in this case. The appellants negotiated a contract at a time when neither
they nor the company were under a CBA. Therefore, we think the contracts they
negotiated were not subsumed into the subsequent CBA.
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b. Preemption
For most of the same reasons appearing in the preceding section we
hold that the appellants’ independent contract claims are not preempted by the
National Labor Relations Act (NLRA) nor by Section 301 of the Labor Managment
Relations Act (LMRA). Section 301 preempts state law claims that are based directly
on rights created by a CBA or claims that are substantially dependent on an
interpretation of a CBA. Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987). In Belknap,
Inc. v. Hale, 462 U.S. 491, 498 (1983), the Supreme Court described two doctrines
that determine whether state causes of action are preempted by the NLRA:
Under the first, set out in San Diego Building Trades
Council v Garmon, 359 U.S. 236, 3 L. Ed. 2d 775, 79 S. Ct.
773 (1959), state regulations and causes of action are
presumptively pre-empted if they concern conduct that is
actually or arguably either prohibited or protected by the
Act. Id., at 245, 3 L. Ed. 2d 775, 79 S. Ct. 773. The state
regulation or cause or action may, however, be sustained
if the behavior to be regulated is behavior that is of only
peripheral concern to the federal law or touches interests
deeply rooted in local feeling and responsibility. Id., at
243-244, 3 L. Ed. 2d 775, 79 S. Ct. 773; Sears, Roebuck &
Co. v Carpenters, 436 U.S. 180, 200, 56 L. Ed. 2d 209, 98
S. Ct. 1745 (1978); Farmer v Carpenters, 430 U.S. 290,
296-297, 51 L. Ed. 2d 338, 97 S. Ct. 1056 (1977). In such
cases, the State’s interest in controlling or remedying the
effects of the conduct is balanced against both the
interference with the National Labor Relations Board’s
ability to adjudicate controversies committed to it by the
Act, Farmer v Carpenters, supra, at 297, 51 L. Ed. 2d 338,
97 S. Ct. 1056; Sears Roebuck & Co. v Carpenters, 436
U.S., at 200, 56 L. Ed. 2d 209, 98 S. Ct. 1745, and the risk
that the State will sanction conduct that the Act protects.
Id., at 205, 56 L. Ed. 2d 209, 98 S. Ct. 1745. The second
pre-emption doctrine, set out in Machinists v Wisconsin
Employment Relations Comm’n, 427 U.S. 132, 49 L. Ed. 2d
396, 96 S. Ct. 2548 (1976), proscribes state regulation and
state-law causes of action concerning conduct that
Congress intended to be unregulated, id., at 140, 49 L Ed
2d 396, 96 S. Ct. 2548, conduct that was to remain a part
of the self-help remedies left to the combatants in labor
disputes, id., at 147-148, 49 L. Ed. 2d 396, 96 S. Ct. 2548.
In Belknap the court decided that facts remarkably like the facts in this case did not
bring the dispute within either of the NLRA preemption doctrines.
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We think Caterpillar answers the question of whether this controversy
is preempted by Section 301 of the LMRA. Considering only the allegations in the
amended complaint we see no allegations that the dispute involves rights created by
a CBA, and without the CBA even being in this record we cannot see how the
appellants’ claims involve an interpretation of the CBA.
IV.
Interference with Employment Contract
The trial judge dismissed the tortious interference count because it
believed the appellants’ contract had been subsumed within the CBA negotiated by
the union. On appeal the only argument made by the local union is that one cannot
interfere with a contract to which it is a party. (Citing Forrester v. Stockstill, 869
S.W.2d 328 (Tenn. 1994).
As we have pointed out, however, this action is not based on the CBA
negotiated by Local 670. And the intentional interference with at-will employment by
a third party without privilege or justification is actionable. Forrester at 330; Ladd v.
Roane Hosiery, Inc., 556 S.W.2d 758 (Tenn. 1977); Dukes v. Brotherhood of Painters,
235 S.W.2d 7 (Tenn. 1950). The allegations in the complaint are sufficient to state
a cause of action against the local union.
Although the national union argues on appeal that it is a separate entity
from the local union, and that there are no specific allegations against it, the complaint
does specifically refer to the “URW and URW Local 670". In paragraph 61, the
complaint alleges that “The URW and URW Local 670 intended to cause Pirelli to
terminate the employment of all the permanent replacement workers.” The complaint
goes on to allege that both defendants created pressure on Pirelli to terminate the
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appellants (paragraph 65) and that in inducing Pirelli to terminate the appellants, both
defendants acted with malice and fraudulent intent (paragraph 70).
Whether the appellants can prove any of their allegations remains to be
seen, but at this stage of the litigation, the complaint states a cause of action for
intentional interference with contract against both union defendants.
The judgment of the court below is reversed as indicated herein and the
cause is remanded to the Circuit Court of Davidson County for further proceedings.
Tax the costs on appeal one-third to the appellants and two-thirds to the appellees.
_____________________________
BEN H. CANTRELL,
PRESIDING JUDGE, M.S.
CONCUR:
_____________________________
WILLIAM C. KOCH, JR., JUDGE
_____________________________
WILLIAM B. CAIN, JUDGE
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