Anco Const. Co., Ltd. v. Freeman

Citation236 Kan. 626,693 P.2d 1183
Decision Date26 January 1985
Docket NumberNo. 56680,56680
Parties, 119 L.R.R.M. (BNA) 3531, 102 Lab.Cas. P 55,494, 103 Lab.Cas. P 55,523 ANCO CONSTRUCTION COMPANY, LTD., A Corporation, Appellee, v. Jerry FREEMAN, Appellant.
CourtUnited States State Supreme Court of Kansas

Syllabus by the Court

1. With few exceptions, we have recognized that state law is preempted by the National Labor Relations Act (NLRA) from regulation of labor-management disputes. The exceptions have developed through the use of various tests which help courts determine whether state regulation conflicts with federal jurisdiction.

2. The test to determine if NLRB jurisdiction preempts an activity in labor relations is whether it is subject to sections seven or eight of the NLRA, which cover both "concerted activities" and "unfair labor practices."

3. Under the NLRA, an unfair labor practice results when an employer interferes with, restrains, or coerces an employee in the exercise of rights guaranteed under the NLRA. It is well established that an employee is guaranteed the right to protest wages. Therefore, the NLRA clearly protects and covers a retaliatory discharge which involves a wage dispute, under its prohibition against unfair labor practices.

4. The employment-at-will doctrine in Kansas stems from the judicial determination that, in the absence of a contract covering the duration of employment, the employment is terminable at the will of either party, and the employee has no cause of action by alleging he was discharged.

5. There is a limited public policy exception to the employment-at-will doctrine where an employee alleges he is terminated in retaliation for filing a workers' compensation claim. Since the workers' compensation remedy was designated to advance an important state interest, and the purpose of the act would be thwarted if an employer were permitted to discourage an employee's exercise of that statutory right, a cause of action in tort for retaliatory discharge is stated in such a situation. When an employee is terminated in violation of federal public policy, however, no state cause of action is pled.

6. The definition of the word "employee" within the NLRA is not to be narrowed to make abortive the remedial purposes of the Act. Thus, individuals who obtain "other and substantially equivalent employment" within the meaning of the NLRA have standing to complain of a violation of the NLRA, but may not demand reinstatement to their previous position.

Steven M. Dickson of McCullough, Wareheim & LaBunker, Topeka, argued the cause and was on brief for appellant.

Richard D. Anderson of Colmery, McClure, Letourneau, Entz & Merriam, P.A., Topeka, argued the cause and was on brief for appellee.

HERD, Justice:

This action commenced as one for defamation by Anco Construction Company (Anco) against Jerry Freeman. Freeman counterclaimed for retaliatory discharge. The defamation action was dismissed by agreement. The trial court then dismissed the counterclaim for lack of jurisdiction. Freeman appealed.

Jerry L. Freeman was hired by Anco Construction Company on September 23, 1982, to work as a general laborer on the Allied Health Center project at Washburn University in Topeka. On November 12 1982, Freeman was discharged from his employment with Anco. On December 21, 1982, appellant told the architect responsible for the construction of the Allied Health Center that he had information concerning substandard work at the Allied Health Center. He stated that, in order to prevent a tragedy similar to the Kemper Arena roof collapse and the Hyatt Regency Hotel disaster, he would reveal the information concerning the substandard work for $75,000.

On January 11, 1983, Anco filed this action claiming damage to reputation and punitive damages and demanding the immediate disclosure of all information pertaining to any substandard work at the Allied Health Center project.

Appellant filed a counterclaim alleging he was discharged, in violation of public policy, in retaliation for his objecting to the pay scale. The basis for appellant's counterclaim is that he complained to Anco concerning its employees not being paid Davis-Bacon wages and he was discharged in retaliation. Appellant admits, however, he did not speak with Anco concerning the wage issue until after his termination.

The parties stipulated to a dismissal of all claims except the retaliatory discharge. On January 11, 1984, the district court dismissed the retaliatory discharge counterclaim, holding it lacked subject matter jurisdiction to hear the action since the claim was preempted by the exclusive jurisdiction of the National Labor Relations Board (NLRB).

Appellant argues on appeal the district court erred in ruling its jurisdiction was preempted.

With few exceptions, we have recognized that state law is preempted by the National Labor Relations Act (NLRA) from regulation of labor-management disputes. See Whelan's Inc. v. Kansas Dept. of Human Resources, 235 Kan. 425, 681 P.2d 621 (1984); Inland Industries, Inc. v. Teamsters & Chauffeurs Local Union, 209 Kan. 349, 496 P.2d 1327 (1972); and Hyde Park Dairies v. Local Union No. 795, 182 Kan. 440, 321 P.2d 564 (1958). The exceptions have developed through the use of various tests which help courts determine whether state regulation conflicts with federal jurisdiction. See Farmer v. Carpenters, 430 U.S. 290, 97 S.Ct. 1056, 51 L.Ed.2d 338 (1977); San Diego Unions v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959); Whelan's Inc. v. Kansas Dept. of Human Resources, 235 Kan. 425, 681 P.2d 621; and Reece Shirley & Ron's, Inc. v. Retail Store Employees Union & Local 782, 225 Kan. 470, 592 P.2d 433 (1979). Thus, we must determine here whether state jurisdiction has been preempted.

The test to determine if NLRB jurisdiction preempts an activity in labor relations is whether it is subject to sections seven or eight of the NLRA. See Whelan's Inc. v. Kansas Dept. of Human Resources, 235 Kan. at 429, 681 P.2d 621. Sections seven and eight of the NLRA cover both "concerted activities" and "unfair labor practices." Appellant initially argues an employee who continually petitions management for higher wages and better working conditions is not protected by the NLRA because he is not engaged in concerted activity. See N.L.R.B. v. Meinholdt Manufacturing, Inc., 451 F.2d 737 (10th Cir.1971). His argument ignores the possibility that retaliatory discharge might be an unfair labor practice although not a concerted activity. If so, it falls under the auspices of the NLRB.

Under the NLRA, an unfair labor practice results when an employer interferes with, restrains, or coerces an employee in the exercise of rights guaranteed under the NLRA. See 29 U.S.C. § 158(a)(1) (1982). It is well established that an employee is guaranteed the right to protest wages, as was allegedly done in this case, under the NLRA. Cf. Labor Bd. v. Washington Aluminum Co., 370 U.S. 9, 8 L.Ed.2d 298, 82 S.Ct. 1099 (1962). Therefore, the NLRA clearly protects and covers the alleged retaliatory discharge as an unfair labor practice in this case since it involved a wage dispute covered by the NLRA.

Appellant further argues, under the theory propounded in Murphy v. City of Topeka, 6 Kan.App.2d 488, 630 P.2d 186 (1981), that his assertion of his wage rights requires state jurisdiction since it is an assertion of an important public policy, which under State law is an exception to the employment-at-will doctrine.

The employment-at-will doctrine in Kansas stems from the judicial determination that, in the absence of a contract covering the duration of employment, the employment is terminable at the will of either party, and the employee has no cause of action by alleging he was discharged. See Mildfelt v. Lair, 221 Kan. 557, 563, 561 P.2d 805 (1977).

In Murphy, the Court of Appeals recognized a limited public policy exception to this employment-at-will doctrine. The court held where an employee alleged he was terminated in retaliation for filing a workers' compensation claim, a cause of action in tort for retaliatory discharge was stated. The court reasoned the workers' compensation remedy was designed to advance an important state interest, and the purpose of the act would be thwarted if an employer were permitted to discourage an employee's exercise of that statutory right.

The holding in Murphy is narrowly drawn. It applies only to interests protected by state law. Federal law, however, provides several exceptions to the employment-at-will...

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