Bale v. General Telephone Co. of California, 85-5734

• Citation: 795 F.2d 775
• Decision Date: 25 July 1986
• Docket Number: No. 85-5734,85-5734
• Parties: 123 L.R.R.M. (BNA) 2835, 105 Lab.Cas. P 11,998, 1 Indiv.Empl.Rts.Cas. 1018 Elizabeth BALE and Jennifer Fife, Plaintiffs-Appellants, v. GENERAL TELEPHONE COMPANY OF CALIFORNIA, and Does 1-50, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 775

795 F.2d 775

123 L.R.R.M. (BNA) 2835, 105 Lab.Cas. P 11,998,

1 Indiv.Empl.Rts.Cas. 1018

Elizabeth BALE and Jennifer Fife, Plaintiffs-Appellants, v. GENERAL TELEPHONE COMPANY OF CALIFORNIA, and Does 1-50 Defendants-Appellees.

No. 85-5734.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 2, 1985.

Decided July 25, 1986.

David Llewellyn, Jr., Santa Ana, Cal., for plaintiffs-appellants.

Mark Sullivan, Santa Monica, Cal., for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before WALLACE, ANDERSON, and NORRIS, Circuit Judges.

WALLACE, Circuit Judge:

Bale and Fife seek damages from their former employer, General Telephone Company of California (General Telephone), for allegedly tortious conduct arising from General Telephone's representations at the time of hiring. The district court, exercising removal jurisdiction, dismissed their state tort claims as preempted by federal labor law. Bale and Fife appeal the denial of their motions to amend the judgment and to remand their state claims to state court. We have jurisdiction under 28 U.S.C. Sec. 1291, and we affirm.

I

Bale and Fife were hired by General Telephone on May 17 and June 3, 1982, respectively. Each alleges that at the time of hiring she was told that she would serve as a "temporary" employee for six months, and that at the end of six months her position would become "regular." Under the governing collective bargaining agreement, a "temporary employee"

is a person who is employed for a continuous work period, not to exceed six months, when additional work of any nature requires a temporarily augmented force or where replacements are required for regular employees who are absent.

Agreement Art. VI Sec. 14. "Regular" employees participate in benefit programs not open to temporary employees. Regular employees may be discharged only for cause and only pursuant to collective bargaining agreement procedures.

Bale and Fife allege that they were led to believe that the period of "temporary" employment was really a probationary period, at the end of which the rights and privileges of regular status would vest. Both Bale and Fife became members of Local 11510 of the Communications Workers of America, which represents General Telephone employees. Both worked for General Telephone for over six months. They say they believed that they had become regular employees on November 17 and December 3, 1982, respectively.

In November 1982, Local 11510 became aware that General Telephone had retained several temporary employees for over six months. On November 17, Local 11510 filed a grievance, complaining that General Telephone had violated the collective bargaining agreement by doing so. On November 29, Local 11510 filed another grievance on behalf of three regular employees who desired to return from a leave of absence. Local 11510 alleged that by retaining temporary employees General Telephone had violated collective bargaining agreement provisions giving a hiring preference to those on leaves of absence. This dispute was not finally settled until June 1983, when General Telephone and Local 11510 agreed that temporary employees at the facility where Bale and Fife worked should be discharged by August 1, 1983.

Meanwhile, Bale had become concerned that no official action had been taken to recognize that she had become a regular employee on November 17. In early December 1982, Bale asked Local 11510 to file a grievance on her behalf to gain recognition of her regular status. She was advised that the union would not represent temporary employees seeking regular status. In the spring of 1983, Fife contacted the local president and was told that General Telephone would discharge its temporary employees and replace them. The local president also told her that the union would not represent temporary employees who sought regular status. Local 11510 subsequently refunded to Bale and Fife the 60 percent of their union dues that had been retained by Local 11510 after their first six months of employment; the 40 percent that had been forwarded to the parent union was not refunded.

Bale and Fife were discharged on July 15, 1983. They filed suit in California state court against both General Telephone and Local 11510. Against General Telephone they alleged state law causes of action for breach of oral contract, fraud, and negligent misrepresentation. They also alleged a cause of action against General Telephone under section 301 of the Labor-Management Relations Act, 29 U.S.C. Sec. 185, for breach of a collective bargaining agreement. On the basis of this cause of action, General Telephone successfully removed the action to the federal district court.

The district judge granted summary judgment for General Telephone and Local 11510. Bale and Fife moved to amend the judgment for General Telephone, see Fed.R.Civ.P. 59(e), asking the district court to hold that its state tort claims were not preempted by federal law and to remand these claims to state court. Bale and Fife appeal the district court's denial of this motion. They do not appeal the district court's entry of summary judgment on their section 301 and state contract claims.

II

We address the district court's denial of Bale's and Fife's motion to remand their state claims to state court in two steps: (1) Were the state claims properly removed to federal court? (2) If so, once the district judge had dismissed the section 301 claim, should she have remanded the state claims?

A.

The initial question on appeal is one of federal jurisdiction, which we review de novo. See Lumber Production Industrial Workers Local 1054 v. West Coast Industrial Relations Association, 775 F.2d 1042, 1045 (9th Cir.1985). Under 28 U.S.C. Sec. 1441(a), a civil action brought in state court may be removed to a federal district court only if it could have been brought there originally. Bale's and Fife's own complaint, on its face, plainly stated a federal cause of action under section 301. Their state claims share with this federal claim "a common nucleus of operative fact," United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966) (Gibbs), since all the claims arise from alleged representations made at the time of hiring. The state claims therefore fall within the scope of pendent jurisdiction. Id. Since the action--both the section 301 claim and the pendent state claims--could have been brought originally in the district court, the district court had jurisdiction on removal to address the pendent state claims.

Because the district court had pendent jurisdiction on removal over Bale's and Fife's state law claims, we need not now consider whether the district court could also exercise removal jurisdiction over these claims on the alternative ground that they could be recharacterized as federal section 301 claims. See Williams v. Caterpillar Tractor Co., 786 F.2d 928, 930-33, 935-37 & n. 6 (9th Cir.1986).

B.

While the section 301 claim served as the basis for removal jurisdiction, the district court's subsequent dismissal of this claim did not deprive it of jurisdiction over the remaining pendent state claims. Schultz v. Sundberg, 759 F.2d 714, 718 (9th Cir.1985) (Schultz ); Anderson v. Allstate Insurance Co., 630 F.2d 677, 681 (9th Cir.1980) (Anderson ). Our inquiry is limited to whether the district judge abused her discretion in not remanding the state claims to state court. Schultz, 759 F.2d at 718; Anderson, 630 F.2d at 681 n. 3.

We have no difficulty concluding that the district judge did not abuse her discretion in declining to remand the state claims. "[G]iven advantages of economy and convenience and no unfairness to litigants," a district court may freely address pendent state claims. Hagans v. Lavine, 415 U.S. 528, 546, 94 S.Ct. 1372, 1383, 39 L.Ed.2d 577 (1974). In light of the close relation between the federal and state claims, the district judge's decision to address the state claims was economical and convenient. In addition, we perceive no unfairness to the litigants. Furthermore, the fact that the state claims implicate the doctrine of federal preemption is a particularly strong factor in favor of the exercise of pendent jurisdiction. Id. 415 U.S. at 550, 94 S.Ct. at 1385; Gibbs, 383 U.S. at 727, 729, 86 S.Ct. at 1139, 1140.

III

We now consider whether the district court correctly determined that Bale's and Fife's state tort claims were preempted by federal labor law. We review this question of law de novo.

Bale and Fife were members of the bargaining unit covered by the collective agreement between General Telephone and Local 11510. The individual employment contracts entered into by Bale and Fife could therefore be effective only insofar as they were consistent with the collective agreement. Olguin v. Inspiration Consolidated Copper Co., 740 F.2d 1468, 1474 (9th Cir.1984) (Olguin ). Any suit for breach of the individual employment contracts would therefore fall within the preemptive scope of section 301. Id. Bale and Fife now acknowledge that any state contract claims they would otherwise have are preempted by federal law. They contend, however, that they retain state tort claims for fraud and negligent misrepresentation.

The Supreme Court's opinion in Allis-Chalmers v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985) (Allis-Chalmers ), informs our consideration of whether Bale's and Fife's state tort claims are preempted by section 301. In Allis-Chalmers, an employee was entitled to benefits for personal injury under an employer-funded...