Belknap, Inc v. Hale
| Citation | 463 U.S. 491,77 L.Ed.2d 798,103 S.Ct. 3172 |
| Decision Date | 30 June 1983 |
| Docket Number | No. 81-1966,81-1966 |
| Parties | BELKNAP, INC., Petitioner v. Duwaine E. HALE et al |
| Court | United States Supreme Court |
When negotiations for a new collective-bargaining agreement between petitioner employer and the union representing certain of its employees reached an impasse, some of the employees went out on strike, and petitioner then unilaterally granted a wage increase for employees who stayed on the job. Petitioner also advertised for and hired "permanent" replacements for striking employees. Under federal labor law, where employees engage in an economic strike, the employer may hire permanent replacements whom he need not discharge even if the strikers offer to return to work unconditionally. However, if the strike is an unfair labor practice strike, the employer must discharge replacements in order to accommodate returning strikers. Based on the unilateral wage increase, the union filed unfair labor practice charges with the National Labor Relations Board (Board) against petitioner, which countered with charges of its own, and complaints were issued against both parties. In the meantime, petitioner assured its replacement employees that they would continue to be permanent replacements, but the unfair labor practice complaints were later dismissed by the Board pursuant to a settlement agreement between the parties under which petitioner agreed to reinstate the strikers. Respondents, replacement employees who were laid off to make room for returning strikers, then sued petitioner in a Kentucky state court to recover damages for misrepresentation and breach of contract. The trial court granted summary judgment for petitioner on the ground that respondents' causes of action were pre-empted by the National Labor Relations Act (NLRA), but the Kentucky Court of Appeals reversed.
Held: Respondents' causes of action for misrepresentation and breach of contract are not pre-empted. Pp. 498-512.
(a) The doctrine of Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396, proscribing state regulation and state-law causes of action concerning conduct that Congress intended to be unregulated, does not foreclose this suit. There is no indication that Congress intended conduct of an employer and a union, such as that involved here, to be controlled solely by the free play of economic forces, so as to preclude state-court damages actions by discharged replacement employees on the theory that such actions would upset the delicate balance of forces established by federal law. Entertaining suits such as the instant suit does not interfere with the asserted policy of federal law favoring settlement of labor disputes. There is no substantial impact on the availability of settlement of economic or unfair labor practice strikes because the employer may protect himself against suits like this by promising permanent employment to replacement employees, subject only to settlement with the union or to a Board unfair labor practice order directing reinstatement of strikers. Such contracts are sufficiently "permanent" to permit the employer who prevails in a strike to keep replacements he has hired if he prefers to do so. Pp. 499-507.
(b) Nor are respondents' causes of action pre-empted under San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775, which held that 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 NLRA. While the questions whether the strike was an unfair labor practice strike—requiring reinstatement of strikers—because of petitioner's unilateral wage increase and whether its offering permanent employment to respondents was also an unfair labor practice, were matters for the Board, nevertheless, under Garmon a State may regulate conduct arguably protected or prohibited by the NLRA i the conduct is of only peripheral concern to the NLRA or if it is so deeply rooted in local law that it cannot be assumed that Congress intended to pre-empt the application of state law. The critical inquiry is whether the controversy presented to the state court is identical to that which could be presented to the Board. Here, the controversies cannot fairly be called identical since the focus of the Board's determinations would be on the rights of strikers under federal law, whereas the state-court claims would concern the rights of replacement employees under state law. And at the same time the State has substantial interests in protecting its citizens from misrepresentations that have caused them grievous harm and in providing a remedy to its citizens for breach of contract. Pp. 507-512.
Affirmed.
Larry E. Forrester, Atlanta, Ga., argued, for petitioner.
Samuel A. Alito, Jr., Newark, N.J., for N.L.R.B., as amicus curiae, by special leave of Court.
Cecil Davenport, Louisville, Ky., for respondents.
The federal labor relations laws recognize both economic strikes and strikes to protest unfair labor practices. Where employees have engaged in an economic strike, the employer may hire permanent replacements whom it need not discharge even if the strikers offer to return to work unconditionally. If the work stoppage is an unfair labor practice strike, the employer must discharge any replacements in order to accommodate returning strikers. In this case we must decide whether the National Labor Relations Act (the NLRA or the Act) preempts a misrepresentation and breach-of-contract action against the employer brought in state court by strike replacements who were displaced by reinstated strikers after having been offered and accepted jobs on a permanent basis and assured they would not be fired to accommodate returning strikers.
Petitioner Belknap, Inc., is a corporation engaged in the sale of hardware products and certain building materials. A bargaining unit consisting of all of Belknap's warehouse and maintenance employees selected International Brotherhood of Teamsters Local No. 89 (Union) as their collective bargaining representative. In 1975, the Union and Belknap entered into an agreement which was to expire on January 31, 1978. The two opened negotiations for a new contract shortly before the expiration of the 1975 agreement, but reached an impasse. On February 1, 1978, approximately 400 Belknap employees represented by Local 89 went out on strike. Belknap then granted a wage increase, effective February 1, for union employees who stayed on the job.
Shortly after the strike began, Belknap placed an advertisement in a local newspaper seeking applicants to "permanently replace striking warehouse and maintenance employees." 1 A large number of people responded to the offer and were hired. After each replacement was hired, Belknap presented to the replacement the following statement for his signature:
"I, the undersigned, acknowledge and agree that I as of this date have been employed by Belknap, Inc. at its Louisville, Kentucky, facility as a regular full time permanent replacement t permanently replace ______ in the job classification of ____________________."
On March 7, Local 89 filed unfair labor practice charges against petitioner Belknap. The charge was based on the unilateral wage increase granted by Belknap. Belknap countered with charges of its own. On April 4, the company distributed a letter which said, in relevant part:
TO ALL PERMANENT REPLACEMENT EMPLOYEES
* * * * *
We recognize that many of you continue to be concerned about your status as an employee. The company's position on this matter has not changed nor do we expect it to change. You will continue to be permanent replacement employees so long as you conduct yourselves in accordance with the policies and practices that are in effect here at Belknap.
* * * * *
We continue to meet and negotiate in good faith with the Union. It is our hope and desire that a mutually acceptable agreement can be reached in the near future. However, we have made it clear to the Union that we have no intention of getting rid of the permanent replacement employees just in order to provide jobs for the replaced strikers if and when the Union calls off the strike.
On April 27, the Regional Director issued a complaint against Belknap, asserting that the unilateral increase violated §§ 8(a)(1), 8(a)(3), and 8(a)(5) of the Act.2 Three days later, on April 7, the company again addressed the strike replacements:
We want to make it perfectly clear, once again, that there will be no change in your employment status as a result of the charge by the National Labor Relations Board, which has been reported in this week's newspapers.
We do not believe there is any substance to the charge and we feel confident we can prove in the court's satisfaction that our intent and actions are completely within the law.
A hearing on the unfair labor practice charges was scheduled for July 19. The Regional Director convened a settlement conference shortly before the hearing was to take place. He explained that if a strike settlement could be reached, he would agree to the withdrawal and dismissal of the unfair labor practice charges and complaints against both the Company and the Union. During these discussions the parties made various concessions, leaving one major issue unresolved, the recall of the striking workers. The parties finally agreed that the Company would, at a minimum, reinstate 35 strikers per week. The settlement agreement was then reduced to writing. Petitioner laid off the replacements, including the twelve respondents, in order to make room for the returning strikers.
Respondents sued Belknap in the Jefferson County, Kentucky, Circuit Court for misrepresentation and breach of contract. Belknap, they alleged, had proclaimed that it was hiring permanent employees, knowing both that the assertion was...
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