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HUGHES v. PITTSBURGH TESTING LAB

June 17, 1985

JOHN HUGHES, PLAINTIFF,
v.
PITTSBURGH TESTING LAB, COMMONWEALTH EDISON, AND HATFIELD ELECTRIC COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Roszkowski, District Judge.

ORDER

BACKGROUND

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 therefore granted.

DISCUSSION

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 and reversed.

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 ยง 301 to pre-empt this kind of
  derivative tort claim is that only that result
  preserves the central role of arbitration in ...

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