Davis v. Bell Atlantic-West Virginia, Inc.

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JEANETTE DAVIS,
Plaintiff-Appellant,
v.
BELL ATLANTIC-WEST VIRGINIA,
No. 96-1065
INCORPORATED, d/b/a The
Chesapeake and Potomac Telephone
Company of West Virginia, a West
Virginia Corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of West Virginia, at Parkersburg.
Robert J. Staker, Senior District Judge.
(CA-95-445-6)
Argued: December 2, 1996
Decided: April 3, 1997
Before HALL, WILKINS, and NIEMEYER,
Circuit Judges.
_________________________________________________________________
Affirmed by published opinion. Judge Niemeyer wrote the opinion,
in which Judge Hall and Judge Wilkins joined.
_________________________________________________________________
COUNSEL
ARGUED: William C. Garrett, Gassaway, West Virginia, for Appel-
lant. Donald Bell Haller, Arlington, Virginia, for Appellee.
_________________________________________________________________
OPINION
NIEMEYER, Circuit Judge:
The question we decide in this case is whether an employee's state
law claims for violation of a settlement agreement that resolved a
grievance brought under her collective-bargaining agreement are pre-
empted by § 301 of the Labor-Management Relations Act ("LMRA"),
29 U.S.C. § 185. We hold that they are and accordingly affirm.
I
In August 1991, Bell Atlantic-West Virginia, Incorporated ("Bell
Atlantic") discharged Jeanette Davis from her position as a telephone
operator for excessive absenteeism and tardiness. Davis was a mem-
ber of the bargaining unit represented by the Communication Workers
of America, AFL-CIO ("the Union"), and was, therefore, covered by
the Union's collective-bargaining agreement which provided her with
specific grievance rights. Pursuant to the collective-bargaining agree-
ment, she filed a grievance through the Union, challenging her dis-
charge. The parties reached a settlement agreement providing for
Davis' reinstatement without backpay or damages. Davis, Bell Atlan-
tic, and the Union signed the agreement. The settlement agreement
provided further that Bell Atlantic would "immediately bridge the net
credited service" which Davis had accrued prior to her termination
(12 years) but that Davis would not receive any service credit for the
period between her discharge and her reemployment. The agreement
also provided that if Davis "exceeds six incidental absences or six tar-
dies in the twelve (12) months following her reemployment, she shall
be subject to immediate dismissal by the Company, without recourse
to the grievance or arbitration procedure."
Within ten months after resuming her employment, Davis was
tardy seven times, several without explanation and several because
she overslept. On May 31, 1994, Bell Atlantic discharged her again.
Davis filed a two-count complaint against Bell Atlantic in the Cir-
cuit Court of Wood County, West Virginia, alleging a state law con-
tract claim for breach of the collective-bargaining agreement and the
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settlement agreement and a state law tort claim for wrongful dis-
charge. In her breach of contract count, Davis alleged that she "was
wrongfully discharged in violation of [Bell Atlantic's] policy on tardi-
ness, of the terms and conditions of [the Union's] collective-
bargaining agreement, of which she was a member, and the settlement
agreement, dated July 30, 1993." Incorporating the same allegations
in her wrongful discharge count, Davis alleged in that count that Bell
Atlantic violated implied duties of "good faith" and "fair dealing" and
a duty to discharge her only for "just cause."
Bell Atlantic removed Davis' complaint to the federal court under
28 U.S.C. § 1441, alleging that Davis' claim was preempted by § 301
of the LMRA and therefore her claims fell within the district court's
federal question jurisdiction. The district court denied Davis' motion
to remand, finding that the LMRA preempted the state law claims.
The court concluded that Davis' breach of contract claim was clearly
preempted because it explicitly alleged a breach of the collective-
bargaining agreement and of the derivative settlement agreement. The
district court also found Davis' wrongful discharge claim preempted
because Davis' allegation that Bell Atlantic violated implied condi-
tions of "good faith," "fair dealing" and discharge only for "just
cause" could be interpreted solely in the context of the rights and
responsibilities defined in the collective-bargaining agreement. The
district court later granted Bell Atlantic's motion for summary judg-
ment because Davis' complaint was barred by the applicable statute
of limitations. This appeal followed.
II
The single issue that Davis raises on appeal is whether the district
court properly refused to remand her complaint to the state court on
the ground that federal labor law preempts her state claims. While
Davis acknowledges that a claim for breach of a collective-bargaining
agreement is exclusively a question of federal law under § 301 of the
LMRA, she argues that her claim for breach of the settlement agree-
ment is an independent state law claim because "the terms of the [set-
tlement agreement] did not rely upon the interpretation of any term
or provision of the collective-bargaining agreement." In an effort to
separate her claim from the collective-bargaining agreement, Davis
notes that in the settlement agreement she agreed to dismiss the griev-
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ance filed under the collective-bargaining agreement and to waive any
"grievance rights" if she violated the settlement agreement.
The particular question that Davis' appeal raises-- whether claims
for breach of a settlement agreement entered into pursuant to the
grievance procedure of a collective-bargaining agreement are pre-
empted by § 301 of the LMRA -- has not previously been addressed
by our court.
The applicable legal principles are not disputed. Section 301 of the
LMRA provides that suits for violation of collective-bargaining
agreements may be filed in federal court. See 29 U.S.C. § 185(a). And
it is well established that § 301 provides federal courts not only with
jurisdiction but also with the duty of developing a federal common
law of labor rights. See Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,
209 (1985); Textile Workers Union v. Lincoln Mills, 353 U.S. 448,
456 (1957). To ensure uniform interpretation of collective-bargaining
agreements and to protect the power of arbitrators,§ 301 has been
found to "displace entirely any state cause of action ``for violation of
contracts between an employer and a labor organization.'" Franchise
Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 23
(1983). Accordingly, "state law does not exist as an independent
source of private rights to enforce collective-bargaining contracts."
Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987) (citation omit-
ted). Moreover, the Supreme Court has refused to allow artful plead-
ing to circumvent the power of § 301's preemptive force. Form is not
to triumph over substance as employees relabel contract claims as
claims for tortious breach of a contract. See Allis-Chalmers, 471 U.S.
at 211. Under this "complete pre-emption corollary to the well-
pleaded complaint rule," Caterpillar, 482 U.S. at 393, it follows that
a purportedly state law claim, the resolution of which depends sub-
stantially upon the analysis of a collective-bargaining agreement's
terms, must either be treated as a claim under § 301 or be dismissed
as preempted under federal labor law. See Allis-Chalmers, 471 U.S.
at 220.
While § 301 does not preempt "nonnegotiable rights conferred on
individual employees as a matter of state law," Livadas v. Bradshaw,
512 U.S. 107, 123 (1994), § 301 preemption does occur when resolu-
tion of a state claim "is inextricably intertwined with consideration of
4
the terms of the labor contract," Allis-Chalmers, 471 U.S. at 213, or,
as the Court expressed in an alternative formulation, when application
of state law to a dispute "requires the interpretation of a collective-
bargaining agreement," Lingle v. Norge Div. of Magic Chef, Inc., 486
U.S. 399, 413 (1988). Accordingly, "it is 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) that decides whether a state cause
of action may go forward." Livadas, 512 U.S. at 123-24 (internal cita-
tion omitted).
We had occasion to define yet further the circumstances when
§ 301 preempts a state law claim in McCormick v. AT&T Technolo-
gies, Inc., 934 F.2d 531 (4th Cir. 1991). In McCormick, we held that
determination of an employer's right to empty an employee's locker
required interpretation of the relevant collective-bargaining agreement
and, therefore, that § 301 preempted the employee's state law tort
claim based on the locker incident. In doing so, we held that "[s]tate
tort claims are preempted where reference to a collective bargaining
agreement is necessary to determine whether a ``duty of care' exists
or to define ``the nature and scope of that duty . . . .'" Id. at 536 (quot-
ing IBEW v. Hechler, 481 U.S. 851, 862 (1987)). We noted that,
although the collective-bargaining agreement at issue did not delin-
eate the employer's rights with respect to employee lockers, the pre-
emptive force of § 301 was sufficient to support a broad construction
of the meaning of a collective-bargaining agreement to be "a general-
ized code to govern a myriad of cases which the draftsman cannot
wholly anticipate." McCormick, 934 F.2d at 536 (quoting United
Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S.
574, 578 (1960)).
With these principles in hand, we now turn to the case before us.
III
The first count of Davis' complaint alleges a breach of both the
collective-bargaining agreement and the agreement settling a griev-
ance filed under the collective-bargaining agreement. To the extent
that this breach of contract claim rests on the collective-bargaining
agreement itself, § 301 of the LMRA clearly preempts the claim. See
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Teamsters Local 174 v. Lucas Flour Co., 369 U.S. 95, 102 (1962).
For the reasons that follow, we also believe that her claim for breach
of the settlement agreement depends on rights conferred by the
collective-bargaining agreement and is therefore preempted.
The collective-bargaining agreement established, among other
things, Davis' conditions of employment with Bell Atlantic and
directly controlled Bell Atlantic's original dismissal of Davis for
absenteeism and tardiness. The collective-bargaining agreement pro-
vided that Bell Atlantic "will not discuss or attempt to settle" such a
matter without Union participation and requires that any settlement be
reached within the collective-bargaining agreement's grievance pro-
cedure. Accordingly, when Davis was first discharged, she filed a
grievance under the collective-bargaining agreement with the assis-
tance of the Union. And in accordance with the procedure specified
in the collective-bargaining agreement, Davis, the Union, and Bell
Atlantic reached a settlement, which all three parties signed. That
agreement's entire vitality and legitimacy thus draws on the underly-
ing collective-bargaining agreement. While the parties to the settle-
ment agreement did waive further grievance procedures, in the
settlement agreement they nevertheless defined the"just cause" nec-
essary for subsequent termination, a restriction on Bell Atlantic's
right to dismiss employees which was established in the collective-
bargaining agreement.
Moreover, interpretation of the settlement agreement would require
reference to an interpretation of the collective-bargaining agreement.
The settlement agreement provided that Bell Atlantic would "bridge
the net credited service which [Davis] had accrued prior to termina-
tion"; it provided that Davis would maintain"fully satisfactory
dependability as a condition of employment"; and it provided that
Davis was subject to discharge if, during the ensuing 12 months, she
exceeded "six incidental absences or six tardies." All of these terms
relate to the underlying work relationship between Davis and Bell
Atlantic and require reference to the collective-bargaining agreement
for interpretation and application. Defining credited service, satisfac-
tory dependability, and incidental absenteeism or tardies does not
draw on independently established conditions of employment.
While an independent employment contract's mere borrowing of
one or more terms from a collective-bargaining agreement does not
6
in itself bring that contract within the scope of§ 301 preemption, see
Marion v. Virginia Elec. & Power Co., 52 F.3d 86, 89 (4th Cir. 1995),
the settlement agreement here was not an independent employment
contract simply borrowing terms from the collective-bargaining
agreement. The Union's collective-bargaining agreement remained in
force to govern Davis' employment relationship except insofar as it
was modified by the settlement agreement. Thus, if during her period
of reemployment, Bell Atlantic imposed a condition of employment
on Davis that conflicted with the collective-bargaining agreement, the
issue could have been pursued through the collective-bargaining
agreements' grievance procedure. The settlement agreement in this
case addressed discipline only for absenteeism and tardiness and thus
may fairly be characterized as a rider to the collective-bargaining
agreement. Cf. Thomas v. LTV Corp., 39 F.3d 611, 618 (5th Cir.
1994) (considering an attendance probation agreement itself to qualify
technically as a collective-bargaining agreement); Stallcop v. Kaiser
Found. Hosps., 820 F.2d 1044, 1048 (9th Cir. 1987) (finding an oral
agreement made in connection with reinstatement to be part of a
collective-bargaining agreement).
Accordingly, the preservation of a uniform federal law of labor
relations under § 301 of the LMRA requires that we recognize the set-
tlement agreement in this case as merely a particular expression of
rights and duties created by a collective-bargaining agreement. For
that reason, § 301 preempts an alleged breach of the Union-negotiated
agreement that settled an employee grievance. See Thomas, 39 F.3d
at 616-18 (holding that § 301 preempts a state wrongful discharge
claim based on violation of an attendance probation agreement
between a union and an employer); Jones v. General Motors Corp.,
939 F.2d 380, 382-83 (6th Cir. 1991) (concluding that § 301 preempts
state law claims for breach of a settlement agreement because "it will
require a court to address relationships that have been created through
the collective bargaining process and to mediate a dispute founded
upon rights created by a CBA"); Stallcop, 820 F.2d at 1048-49 (find-
ing that § 301 preempts state tort claims for breach of a union-
negotiated agreement to reinstate an employee).
Davis' second state law count alleging a West Virginia tort of
wrongful discharge is for similar reasons preempted. Davis alleged
that Bell Atlantic breached implied terms of her employment relation-
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ship that mandate "good faith," "fair dealing," and "just cause for ter-
mination." Under West Virginia law, a discharged employee claiming
the tort of wrongful discharge for breach of an employment contract
must prove, among other things, the existence of the employment
contract and the breach of its terms. See Collins v. Elkay Mining Co.,
371 S.E.2d 46, 52 (W.Va. 1988); Cook v. Heck's, Inc., 342 S.E.2d
453, 459 (W.Va. 1986). By definition, therefore, the tort of wrongful
discharge has its roots in the contractual arrangement establishing the
employment relationship. Because the basis of Davis' state tort claim
thus depends on an interpretation of the underlying collective-
bargaining agreement, the tort claim alleged in this case is also a mat-
ter of federal law and is preempted. See Allis-Chalmers, 471 U.S. at
216-19 ("Because the [state tort claim] not only derives from the con-
tract, but is defined by the contractual obligation of good faith, any
attempt to assess liability here inevitably will involve contract inter-
pretation.").
IV
Davis concedes that once we have found that § 301 of the LMRA
preempts her state law claims, the district court properly entered sum-
mary judgment against her for failure to satisfy the applicable statute
of limitations. Accordingly, we affirm.
AFFIRMED
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