United States District Court, Northern District of Illinois, W.D
June 17, 1985
JOHN HUGHES, PLAINTIFF,
PITTSBURGH TESTING LAB, COMMONWEALTH EDISON, AND HATFIELD ELECTRIC COMPANY, DEFENDANTS.
The opinion of the court was delivered by: Roszkowski, District Judge.
Plaintiff, a union member covered at all times relevant to this
action by a collective bargaining agreement, brought this
diversity suit for retaliatory discharge against his former
employer, Pittsburgh Testing Lab ("PTL").*fn1 On February 15, 1985,
this court entered an order dismissing plaintiff's complaint for
failure to state a cause of action. Based on Lamb v. Briggs Mfg.,
700 F.2d 1092 (7th Cir. 1983), this court held that the Illinois
tort action for retaliatory discharge was only available to
at-will employees. As a union employee, plaintiff was required to
pursue the remedies provided him under the applicable collective
bargaining agreement prior to bringing suit in federal court.
Subsequent to the dismissal, this court was informed of the
Illinois Supreme Court decision in Midgett v. Sackett-Chicago,
Inc., 104 Ill. 143, 85 Ill.Dec. 475, 473 N.E.2d 1280 (1984), in
which that court held that the Illinois common law remedy for
retaliatory discharge was available to union employees such as
plaintiff as well as nonunion, at-will employees. Based on
Midgett, on February 28, 1985, this court vacated its earlier
order dismissing plaintiff's case.
Based on the April 16, 1985, United States Supreme Court
decision in Allis-Chalmer Corp. v. Lueck, ___ U.S. ___, 105 S.Ct.
1904, 85 L.Ed.2d 206 (1985), this court is now convinced that its
original order dismissing plaintiff's case was correct.
Defendants' motions to dismiss plaintiff's complaint are
Lueck, like the instant case, involved a union member plaintiff
covered by a collective bargaining agreement. Plaintiff Lueck's
collective bargaining agreement incorporated by reference a group
health and disability insurance plan. Lueck's collective
bargaining agreement established a four-step grievance procedure
for general grievances which culminated in final and binding
arbitration. The parties to the collective bargaining agreement
were also bound by a separate letter agreement to a three-part
procedure for disability grievances. These disability grievances,
like general grievances, also ultimately culminated in binding
arbitration under the collective bargaining agreement.
In July of 1981 Lueck suffered a non-occupational back injury
and filed a disability claim in accordance with the group
insurance procedure. The insurance company approved the claim and
began making payments. According to Lueck, however, his employer
on numerous occasions ordered the insurance company to cut off
his payments. Following each termination, Lueck would question
the action and his benefits would be restored.
When Lueck had had enough of these shenanigans, he filed suit
against his employer and the insurer in Wisconsin state court.
Lueck's suit alleged the state tort of bad faith handling of an
insurance claim. Lueck never attempted to grieve his dispute
under the procedures established by the letter agreement or the
collective bargaining agreement.
On motion of the defendants, the Wisconsin trial court
dismissed Lueck's state law claim as being pre-empted by § 301 of
the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185(a).
The Wisconsin Court of Appeals affirmed on different
grounds. The Supreme Court of Wisconsin, however, reversed. The
Supreme Court held that Lueck's claim was one that arose under
state, not federal, law. Noting that the bad faith insurance tort
was one of substantial significance to the State of Wisconsin,
"which has assumed a longstanding policy responsibility for
assuring the prompt payment of disability claims," 105 S.Ct. at
1909, the Wisconsin Supreme Court determined that Lueck's
state-law tort claim a was not pre-empted by § 301.
The United States Supreme Court granted certiorari in the case
The unanimous Lueck Court spent a considerable portion of its
opinion determining whether the Wisconsin tort action for breach
of the duty of good faith as applied to Lueck conferred a
non-negotiable state law right on employers or employees
independent of any right established by the collective bargaining
contract or, whether evaluation of the tort claim was
"inextricably intertwined" with consideration of the meaning of
the terms of the collective bargaining contract. If the statelaw
claim was not independent of the collective bargaining agreement
but rather purported to define the meaning of the contract
relationship, then "that law [was] pre-empted" by § 301. 105
S.Ct. at 1912.
The Lueck Court determined that the Wisconsin good faith tort
was, under the facts of the case, pre-empted. The Court first
noted that the extent of the duty to pay and the implied duty to
act in good faith were both ultimately dependent upon the terms
of the collective bargaining agreement and thus "tightly bound
with questions of contract interpretation that must be left to
Federal Law." 105 S.Ct. at 1914. This conclusion was buttressed
by the fact that in Wisconsin the good faith duty devolved upon
the insurer by reasonable implication from the express terms of
the contract which necessarily invites a consideration of the
contract itself. Id. More importantly to the instant case, the
Lueck Court found:
[a] final reason for holding that Congress
intended § 301 to pre-empt this kind of
derivative tort claim is that only that result
preserves the central role of arbitration in our
"system of industrial self-government".
Id. at 1915 (quoting Steelworkers v. Warrior & Gulf Navigation
Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)). Had
Lueck brought a contract claim pursuant to § 301, he would have
been first required to exhaust the arbitration procedures
established in the letter agreement and collective bargaining
agreement. The parties to the agreements — the employer and
union, and by implication, union members
such as Lueck — had agreed that "a neutral arbitrator [w]ould be
responsible, in the first instance for interpreting the meaning
of their contract. Unless this suit is preempted, their federal
right to decide who is to resolve contract disputes [would] be
lost." Id. The court concluded that:
[s]ince nearly any alleged willful breach of contract
can be restated as a tort claim for breach of a good
faith obligation under a contract, the arbitrator's
role in every case could be bypassed easily if § 301
is not understood to pre-empt such claims. Claims
involving vacation or overtime pay, work assignment,
unfair discharge — in short, the whole range of
disputes traditionally resolved through arbitration —
could be brought in the first instance in state court
by a complaint in tort rather than contract.
Id. at 1915-16 (emphasis added) This result was determined
improper since it would "eviscerate a central tenet of federal
labor-contract law under § 301 that it is the arbitrator, not the
court who has the responsibility to interpret the labor contract
in the first instance." Id. at 1916.
While Lueck considered the state tort of unfair discharge (or
retaliatory discharge) only in dicta, the decision clearly
mandates that § 301 likewise pre-empt that type of tort action
for union employees covered by a collective bargaining agreement.
The union employees right to be discharged only for just cause is
one central to the whole of federal labor law and thus an
integral part of any collective bargaining agreement. The parties
to a collective bargaining agreement devote considerable time and
effort determining what will constitute just cause. Even more
than the good faith tort at issue in Lueck, the state tort of
retaliatory discharge requires definition of the meaning of the
collective bargaining agreement. It is the arbitrator — the
contractually agreed upon neutral decision maker — who must in
the first instance decide the dispute. See also Vantine v.
Elkhart Brass Mfg. Co., Inc., 762 F.2d 511 at 517 (7th Cir.
1985); Oglesby v. RCA Corp., 752 F.2d 272 (7th Cir. 1985).
It is clear, then, that despite plaintiff's attempt to classify
the instant case as a diversity case brought under the Illinois
common-law retaliatory discharge tort, it is actually a labor
dispute governed by § 301. The collective bargaining agreement
covering plaintiff provided for a grievance procedure culminating
in binding arbitration. Plaintiff's tort claim is thus pre-empted
by federal labor law. Having failed to avail himself of the
contractual grievance procedures established in his collective
bargaining agreement, plaintiff's claim is thus not properly
before this court and must be dismissed.