Leary v. Bluestone Coal Corp

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SHELBY LEARY, Commissioner, State
of West Virginia Division of Labor,
on behalf of David Belcher, Calvin
Cheeks, Jeffrey Cheeks, Ransome
Mitchem, Johnny Brown, David
Denton, David Hagerman, Harlin
Hagerman, Robert Hill, Stephen
O'Dell, Bernard Simpson, Ira
Simpson, Claude Smith, and
No. 96-1005
Anthony Taylor,
Plaintiff-Appellee,
v.
BLUESTONE COAL CORPORATION,
Defendant-Appellant,
and
JAMES C. JUSTICE, individually,
Defendant.
Appeal from the United States District Court
for the Southern District of West Virginia, at Charleston.
John T. Copenhaver, Jr., District Judge.
(CA-93-1191-2)
Argued: October 31, 1997
Decided: April 6, 1998
Before WIDENER and ERVIN, Circuit Judges, and
BULLOCK, Chief United States District Judge for the
Middle District of North Carolina, sitting by designation.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Charles Leslie Woody, SPILMAN, THOMAS & BAT-
TLE, Charleston, West Virginia, for Appellant. Daynus Jividen,
OFFICE OF THE ATTORNEY GENERAL, Charleston, West Vir-
ginia, for Appellee. ON BRIEF: Eric W. Iskra, SPILMAN,
THOMAS & BATTLE, Charleston, West Virginia, for Appellant.
William S. Steele, Managing Deputy Attorney General, Amie Lang-
fitt Johnson, Assistant Attorney General, OFFICE OF THE ATTOR-
NEY GENERAL, Charleston, West Virginia, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
This appeal presents the issue of whether, under the circumstances
of this case, West Virginia's Wage Payment and Collection Act (the
"Wage Payment Act"), W. Va. Code §§ 21-5-1 et seq., is pre-empted
by federal labor law. Finding that the district court correctly con-
cluded that the Wage Payment Act was not pre-empted by federal
labor law, we affirm.
Appellee Commissioner of the West Virginia Department of Labor
(the "Commissioner") brought this complaint against Appellant Blue-
stone Coal Corporation ("Bluestone") and James C. Justice1 in state
court on behalf of twenty-six individuals who were former employees
of BBC Coal Company, Inc. ("BBC"), Thurman Coal Company
_________________________________________________________________
1 Defendant Justice was dismissed from this action by order dated
April 21, 1994. J.A. at 36.
2
("Thurman"), Grayhead Mining Company ("Grayhead"), and C&O
Mining Corp. ("C&O").2 Only the claim brought on behalf of the for-
mer employees of C&O is relevant in this appeal. The former employ-
ees of C&O allege that C&O owes them wages and fringe benefits
and that the Wage Payment Act entitles them to collect those monies
from Bluestone in its capacity as a prime contractor within the mean-
ing of the Wage Payment Act.3
The facts underlying this dispute are straightforward. During the
last six months of their employment, the C&O employees did not
receive wages and fringe benefits at the rate required by the 1988
National Bituminous Coal Wage Agreement. Instead, C&O negoti-
ated a separate contract with the employees and paid them at a lower
_________________________________________________________________
2 Bluestone removed this action to federal court on the ground that the
Commissioner's claims were subject to complete pre-emption under vari-
ous sources of federal law including labor law and the Employment
Retirement Income Security Act of 1974 ("ERISA"). The Commissioner
then moved to remand the action to state court. While the motion to
remand was pending, the claims with respect to the former employees of
Thurman and Grayhead were settled and dismissed. J.A. at 20, 54. The
district court then denied the Commissioner's motion to remand. The dis-
trict court found that removal was proper as to the entire action because
the Commissioner's claim with respect to BBC was subject to complete
pre-emption pursuant to Section 301 of the Labor Management Relations
Act (the "LMRA"), 29 U.S.C. § 185. J.A. at 63-71; see 28 U.S.C.
§ 1441(c); Franchise Tax Bd. of California v. Construction Laborers
Vacation Trust for S. California, 463 U.S. 1, 13 (1983); Rosciszewski v.
Arete Assocs., Inc., 1 F.3d 225, 229 n.3 (4th Cir. 1993). The district court
thereafter granted Bluestone's motion for summary judgment directed at
the claim brought on behalf of BBC employees because the claim was
pre-empted by Section 301 of the LMRA, and under Section 301 a claim
could not be maintained against Bluestone as a non-signatory to the rele-
vant collective bargaining agreement. J.A. at 85-86.
3 Under the Wage Payment Act, if the employer fails to pay in full the
wages of its employees including then accrued fringe benefits, then a
"prime contractor" is liable for "payment of wages and fringe benefits . . .
to the extent that the employer of such employee fails to pay such wages
and fringe benefits." W. Va. Code § 21-5-7. Bluestone does not dispute
that it is a prime contractor within the meaning of the Wage Payment
Act. See J.A. at 53.
3
rate. J.A. at 78. As a result, unfair labor practice charges were filed
against C&O with the National Labor Relations Board (the "NLRB"),
which entered a compliance order against C&O for net back pay,
fringe benefits, and medical benefits. J.A. at 52, 78. This court upheld
enforcement of the NLRB award. Id.
The Commissioner's claim on behalf of the C&O employees arose
because C&O failed to pay in full the wages owed pursuant to this
NLRB award, apparently because C&O had gone out of business. See
Appellee's Br. at 11. In its motion for summary judgment, Bluestone
asserted that the Commissioner's claim under the Wage Payment Act
on behalf of the C&O employees was pre-empted by federal labor law
governing successor liability for unfair labor practices. Bluestone did
not cite to authority or identify relevant pre-emption principles sup-
porting this position before the district court. J.A. at 79.
The district court rejected Bluestone's argument. The district court
found Section 301 pre-emption did not apply because the rights cre-
ated by the Wage Payment Act were independent of the collective
bargaining agreement and could be resolved without interpretation of
the agreement. Because Bluestone conceded that it would be liable for
the amounts owing to C&O employees if the Wage Payment Act was
not pre-empted, the district court subsequently entered an order grant-
ing judgment against Bluestone as to the C&O employees. J.A. at
100.
After the district court denied Bluestone's motion for reconsidera-
tion, Bluestone filed a timely appeal to this court. On appeal, Blue-
stone does not challenge the district court's determination that
Section 301 pre-emption is inapplicable in this case. Indeed, Blue-
stone concedes that Section 301 pre-emption does not apply. See
Appellant's Br. at 19. Instead, Bluestone relies on San Diego Bldg.
Trades Council v. Garmon, 359 U.S. 236 (1959), to argue that the
Commissioner's claim is pre-empted because the Wage Payment Act
interferes with "the unfair labor practices of C&O Mining and the
[NLRB's] compliance rules and regulations dealing with such viola-
tions." Appellant's Br. at 23. Thus, under Bluestone's theory, because
Section 8 of the National Labor Relations Act (the "NLRA"), 29
U.S.C. § 158, provides the NLRB with exclusive jurisdiction to adju-
dicate unfair labor practice charges, neither the state courts nor the
4
federal courts have jurisdiction to consider whether Bluestone should
be liable for C&O's unfair labor practices. Bluestone misunderstands
the nature of the Commissioner's claim and the scope of Garmon pre-
emption.
Pre-emption by federal law is a question of law subject to de novo
review. See Cox v. Shalala, 112 F.3d 151 (4th Cir. 1997). In Garmon,
the Supreme Court made two statements which have provided general
guidelines for determining the unexpressed intent of Congress regard-
ing the permissible scope of a state's regulation of activity touching
upon labor-management relations. As to conduct clearly protected or
prohibited by Sections 7 and 8 of the NLRA, the Garmon Court
stated:
When it is clear or may fairly be assumed that the activities
which a State purports to regulate are protected by§ 7 of the
National Labor Relations Act, or constitute an unfair labor
practice under § 8, due regard for the federal enactment
requires that state jurisdiction must yield. To leave the
States free to regulate conduct so plainly within the central
aim of federal regulation involves too great a danger of con-
flict between power asserted by Congress and requirements
imposed by state law.
359 U.S. at 244. The Garmon Court also made the following, more
sweeping statement: "When an activity is arguably subject to § 7 or
§ 8 of the Act, the States as well as the federal courts must defer to
the exclusive competence of the National Labor Relations Board if
the danger of state interference with national policy is to be averted."
Id. at 245.
Relying on these statements, Bluestone argues that West Virginia's
Wage Payment Act impermissibly interferes with the NLRB's juris-
diction over C&O's unfair labor practices, and its rules and regula-
tions with respect to compliance, and that, accordingly, federal law
has pre-empted the "collection of NLRB awards." Appellant's Br. at
18.
However, Bluestone overlooks the fact that the Supreme Court has
refused to apply the Garmon guidelines "in a literal, mechanical fash-
5
ion." Sears, Roebuck & Co. v. San Diego County Dist. Council of
Carpenters, 436 U.S. 180, 188 (1977). Thus, the Supreme Court has
held that:
Under Garmon, a State may regulate conduct that is of only
peripheral concern to the Act or that is so deeply rooted in
local law that the courts should not assume that Congress
intended to pre-empt the application of state law. .. . [In
Sears,] we emphasized that a critical inquiry in applying the
Garmon rules, where the conduct at issue in the state litiga-
tion is said to be arguably prohibited by the Act and hence
within the exclusive jurisdiction of the NLRB, is whether
the controversy presented to the state court is identical with
that which could have been presented to the Board .
Belknap, Inc. v. Hale, 463 U.S. 491, 509-10 (1983) (emphasis added).
In view of these principles, Bluestone's reliance on Garmon pre-
emption is misplaced. The conduct at issue under the Wage Payment
Act is not an issue which is identical to that which could have been
presented to the NLRB. The NLRB's inquiry into C&O's unfair labor
practices involved an examination of the unilateral dealing done by
C&O with its employees and an examination of NLRA Section 8.
Federal labor law rules with respect to successor liability, in turn, deal
with the circumstances in which liability for a predecessor's unfair
labor practices may be imputed to a successor corporation. See, e.g.,
Golden Gate Bottling Co., Inc. v. NLRB, 414 U.S. 168 (1973).
In contrast, prime contractor liability involves an examination of
the relationship between Bluestone and C&O, Bluestone's prime con-
tractor status, and West Virginia's Wage Payment Act. As the district
court consistently emphasized, prime contractor liability does not
involve any inquiry into whether C&O committed unfair labor prac-
tices, or whether Bluestone may be liable for those practices as a suc-
cessor. See J.A. at 118-19. Thus, prime contractor liability is not an
issue which could have been presented to the NLRB and is not an
issue with which the NLRB would have been concerned. In short, the
Wage Payment Act does not turn on successor liability and in no way
interferes with federal labor law rules with respect to successor liabil-
ity.
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Moreover, as the Commissioner notes, the Wage Payment Act
expresses a policy which is rooted deeply in the local law of West
Virginia and consequently is not a law which courts should assume
Congress intended to pre-empt under the NLRA. See Mullins v.
Venable, 171 W. Va. 92, 297 S.E.2d 866 (1982). For the foregoing
reasons, we affirm the district court's decision denying Bluestone's
motion for summary judgment and granting judgment in favor of the
Commissioner.
AFFIRMED
7