1998 -NMSC- 46, Self v. United Parcel Service, Inc.

• Citation: 970 P.2d 582,1998 NMSC 46,126 N.M. 396
• Parties: , 160 L.R.R.M. (BNA) 2888, 137 Lab.Cas. P 58,521, 5 Wage & Hour Cas.2d (BNA) 81, 1998 -NMSC- 46 Clayton SELF and Mark Reid, individually and on behalf of all other New Mexico package car drivers employed during any time on or after
• Decision Date: 22 November 1994
• Court: Supreme Court of New Mexico

Page 582

970 P.2d 582

126 N.M. 396, 160 L.R.R.M. (BNA) 2888,

137 Lab.Cas. P 58,521,

5 Wage & Hour Cas.2d (BNA) 81, 1998 -NMSC- 46

Clayton SELF and Mark Reid, individually and on behalf of

all other New Mexico package car drivers employed

during any time on or after November 22, 1994, Plaintiffs-Appellants, v. UNITED PARCEL SERVICE, INC., an Ohio corporation, Defendant-Appellee.

No. 24859.

Supreme Court of New Mexico.

Nov. 23, 1998.

K. Lee Peifer, Albuquerque, David N. Mark, Seattle, for plaintiffs.

Gilkey & Stephenson, P.A., Duane C. Gilkey, Albuquerque, for defendant.

OPINION

McKINNON, Justice.

¶1 We reverse the trial court's decision that state Minimum Wage Act claims brought by union workers covered by a collective-bargaining agreement are preempted by Section 301 of the Labor Management Relations Act, ch. 120, tit. III, § 301(a), 61 Stat. 156 (codified at 29 U.S.C. § 185(a) (1994)). We hold that these claims were not preempted because they are based on non-negotiable state law rights, and can be resolved independent of any collective-bargaining agreement. For the same reasons, we hold that these workers are not required to exhaust the remedies provided in the collective-bargaining agreement before proceeding in state court. We remand.

I. Factual and procedural background.

¶2 Plaintiffs are package delivery drivers formerly employed by Defendant United Parcel Service (UPS, or the Company), whose terms and conditions of employment were governed by a collective-bargaining agreement between their union and the Company. Plaintiffs filed suit in state district court alleging that UPS violated the New Mexico Minimum Wage Act, NMSA 1978, §§ 50-4-19 to -30 (1993). Specifically, they complained that UPS automatically deducted a one-hour meal period from their hours worked despite the Company's actual and constructive knowledge that drivers regularly work through that period. They allege that UPS violated the Act by not crediting them for this and other "off-the-clock" work, and by not paying them time and a half for such work in excess of forty hours a week.

¶3 The Company removed the action to federal district court, arguing that Plaintiffs' claims were preempted by Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1994). See 28 U .S.C. § 1441(a) (1994) (a defendant may remove a civil state court action to federal court when the federal court has original jurisdiction over the claims). The federal district court remanded the case to state court, holding that it lacked federal question jurisdiction ¹ "because plaintiffs' claims were not 'founded directly on rights created by collective-bargaining agreements [or] "substantially dependent on analysis of a collective-bargaining agreement," ' Caterpillar, Inc. v. Williams, 482 U.S. 386, 394, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citations omitted), and could be decided under New Mexico law."

¶4 After remand to the state district court, UPS moved to dismiss, arguing that the Minimum Wage Act did not apply to Plaintiffs because they were parties to a collective-bargaining agreement from which they received more than minimum wage and for overtime pay, ² also arguing that Plaintiffs' claims were preempted by Section 301. Meanwhile, Plaintiffs moved to certify their case as a class action pursuant to the Minimum Wage Act, NMSA 1978, § 50-4-26(B)(2) and Rule 1-023 NMRA 1998. While that motion was pending, the trial court dismissed the case, apparently on the basis that Plaintiffs' claims were preempted under Section 301. Plaintiffs appealed to the Court of Appeals, which certified the matter to this court.

II. ANALYSIS

¶5 Introduction. The Company argues that because the terms and conditions of Plaintiffs' employment were controlled by the collective-bargaining agreement, Section 301 implicitly preempts Plaintiffs' claims. Alternatively, it claims the Plaintiffs failed to exhaust their remedies under the collective-bargaining agreement which is required by federal law. Thus, the success of both arguments depends on whether federal law controls disposition of this case. See Livadas v. Bradshaw, 512 U.S. 107, 124 n. 18, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994); Albertson's, Inc. v. United Food & Commercial Workers Union, 157 F.3d 758, 761 (9th Cir.1998). We hold that it does not control. Therefore, we reject the Company's arguments, and reverse dismissal of the Plaintiffs' claims by the trial court.

¶6 Standard of Review. After remand to the state district court, the Company moved to dismiss under Rule 1-012(B)(6) NMRA 1998. Both parties, by submitting affidavits and exhibits, converted the motion into one for summary judgment. See Rule 1-056 NMRA 1998; Knippel v. Northern Communications, Inc., 97 N.M. 401, 402, 640 P.2d 507, 508 (Ct.App.1982). Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Roth v. Thompson, 113 N.M. 331, 334, 825 P.2d 1241, 1244 (1992). The issue on appeal is whether the Company was entitled to a dismissal of Plaintiffs' claims as a matter of law. We review these legal questions de novo. Ronald R. Hofer, Standards of Review--Looking Beyond the Labels, 74 Marq.L.Rev. 231, 233-40 (1991).

¶7 Preemption and Section 301. The doctrine of preemption is an outgrowth of the Supremacy Clause of Article VI of the United States Constitution. ³ Under it Congress may, in certain areas of the law, promulgate a uniform federal policy that States may not frustrate either through legislation or judicial interpretation. See generally Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 208, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985); Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 412, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988). When Congress has not expressly stated its desire to displace state law, the defendant bears the burden of showing Congress' intent to preempt. See Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985) (preemption a question of congressional purpose); accord Brown v. Hotel & Restaurant Employees & Bartenders Inter'l Union Local 54, 468 U.S. 491, 500-01, 104 S.Ct. 3179, 82 L.Ed.2d 373 (1984); Buzzard v. Roadrunner Trucking Inc., 966 F.2d 777, 779-80 (3d Cir.1992) (burden on defendant). In areas of the law traditionally rooted in the States' police power, such as the regulation of the health and safety of workers, federalism concerns dictate that preemption should not be lightly inferred. Lingle, 486 U.S. at 412, 108 S.Ct. 1877; Metropolitan Life, 471 U.S. at 749-50 n. 27, 755-56, 105 S.Ct. 2380.

¶8 Section 301(a) of the Labor Management Relations Act provides in relevant part:

Suit for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined by this chapter ... may be brought in any district court of the United States having jurisdiction of the parties....

29 U.S.C. § 185(a). The United States Supreme Court has held that Section 301 embodies Congress' desire to foster the collective bargaining process and its policy in favor of a uniform federal interpretation of the resulting collective-bargaining agreements. Lueck 471 U.S. at 209-10, 105 S.Ct. 1904 (discussing Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957) and Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 103, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962)). Section 301 has been understood as Congress' mandate that, not only should federal courts resolve collective-bargaining agreement disputes, but more importantly, they should develop a uniform body of federal common law for interpreting these agreements. Id. at 210-11, 105 S.Ct. 1904 ("The interests in interpretive uniformity and predictability that require that labor-contract disputes be resolved by reference to federal law also require that the meaning given a contract phrase or term be subject to uniform federal interpretation."). In order to effect Congress' purpose, Section 301 has been read to implicitly preempt the use of state law to interpret or enforce collective-bargaining agreements. Lingle, 486 U.S. at 403-04, 108 S.Ct. 1877; Lueck, 471 U.S. at 209-10, 105 S.Ct. 1904. As the United States Supreme Court explained:

[I]f the resolution of a state-law claim depends upon the meaning of a collective-bargaining agreement, the application of state law (which might lead to inconsistent results since there could be as many state-law principles as there are States) is pre-empted and federal labor-law principles--necessarily uniform throughout the nation--must be employed to resolve the dispute.

Lingle, 486 U.S. at 405-06, 108 S.Ct. 1877, quoted in Hollars v. Southern Pacific Transp. Co., 110 N.M. 103, 106, 792 P.2d 1146, 1149 (Ct.App.1989).

{9} Section 301 does not preempt claims merely because Plaintiffs' union was party to a collective-bargaining agreement. The Company argues that Section 301 of the Labor Management Relations Act preempts Plaintiffs' lawsuit because the terms and conditions of their employment were governed by a collective-bargaining agreement. The Company's argument, however, is too simplistic. Section 301 does not preempt all employment disputes involving unionized workers. Caterpillar, 482 U.S. at 396 n. 10, 107 S.Ct. 2425. The United States Supreme Court has made this clear: "Claims bearing no relationship to a collective-bargaining agreement beyond the fact that they are asserted by an individual covered by such an agreement are simply not pre-empted by § 301." Caterpillar, 482 U.S. at 396 n. 10, 107 S.Ct. 2425. "[N]ot every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is pre-empted by § 301." Lueck, 471 U.S. at 211, 105 S.Ct. 1904. The preemption question does not depend on the nature of the employment relationship; it instead focuses on the nature of a plaintiff's...