Barbieri v. United Technologies Corp.

• Decision Date: 24 April 2001
• Court: Connecticut Supreme Court
• Parties: (Conn. 2001) LORNA A. BARBIERI ET AL. v. UNITED TECHNOLOGIES CORPORATION SC 16428

771 A.2d 915 (Conn. 2001)

LORNA A. BARBIERI ET AL. v. UNITED TECHNOLOGIES CORPORATION

SC 16428

THE SUPREME COURT OF THE STATE OF CONNECTICUT

Argued January 12, 2001

April 24, 2001

David S. Rintoul, for the appellants (plaintiffs).

Kenneth W. Gage, with whom were Jamal M. Dawkins and, on the brief, Albert Zakarian, for the appellee (defendant).

Norcott, Katz, Palmer, Sullivan and Vertefeuille, Js.¹

Katz, J.

OPINION

This appeal concerns the preemptive effect of the Labor Management Relations Act, 29 U.S.C. §§§§ 141 through 197, and the National Labor Relations Act, 29 U.S.C. §§§§ 151 through 169,² specifically, whether the named plaintiffs, Lorna A. Barbieri, Herbert Porter and Raymond Raptis, representing a class of employees of the defendant, United Technologies Corporation, are precluded from asserting their breach of contract claims in state court. Following a jury verdict for the defendant, the trial court denied the plaintiffs' motion to set aside the verdict and concluded that the plaintiffs' claims were preempted by §§ 301 of the Labor Management Relations Act, 29 U.S.C. §§ 185 (a). On appeal, the plaintiffs contend that the trial court improperly determined that their breach of contract claims were preempted by federal law and, further, that the trial court improperly instructed the jury in several respects. We conclude that the plaintiffs' claims, although not preempted under 29 U.S.C. §§ 185 (a), are subject to the exclusive jurisdiction of the National Labor Relations Board and are therefore preempted pursuant to San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245, 79 S. Ct. 773, 3 L. Ed. 2d 775 (1959) (holding that when activity is arguably subject to §§§§ 7 and 8 of the National Labor Relations Act, 29 U.S.C. §§§§ 157, 158, "[s]tates as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board"). Accordingly, we vacate the judgment for the defendant and remand the case to the trial court with direction to dismiss the action.

The jury reasonably could have found the following facts. At various times before the events giving rise to this dispute occurred, the plaintiffs had accepted jobs as hourly employees with Pratt and Whitney Aircraft (Pratt & Whitney), a division of the defendant. During their tenure as employees of the defendant, the plaintiffs had received promotions to salaried, nonunion positions.³ Between 1991 and 1993, the defendant eliminated many of the salaried positions in conjunction with a company-wide reorganization and reduction in its workforce. As a result, while the plaintiffs maintained their salaried positions, the defendant offered them two options: either (1) accept a demotion to an hourly position within the company and receive, for a fixed period of time, a supplemental wage payment over the maximum wage set forth in the collective bargaining agreement covering those hourly positions; or (2) terminate their employment and, if they were eligible, receive a salaried severance package. Each of the plaintiffs accepted the hourly positions, joined the bargaining unit, and thereafter were subject to the terms of the collective bargaining agreement between the defendant and the union.⁴

In an effort to soften the transition from salaried to hourly positions for the demoted employees, the defendant had maintained a policy of paying such employees a temporary wage supplement in addition to the maximum rate of pay, as defined by the collective bargaining agreement, for the labor grade to which they had been demoted. The plaintiffs received wage supplements consistent with the defendant's policy. The defendant's policy, which the plaintiffs referred to as the "Step-Down Program," gradually phased out the wage supplement. The payments decreased over time until each plaintiff received the maximum rate for his or her assigned labor grade. The labor grade pay rates and the manner in which the defendant phased out the wage supplement had been drawn directly from the terms of the collective bargaining agreement.⁵

During the course of negotiations in June of 1993,⁶ the union challenged the wage supplement practice, contending that the policy favored those union members who had been demoted from salaried positions and paid them more, for the same work, than the rest of the union membership. The union also objected to the practice because, in its view, the wage supplement payments were inconsistent with the maximum wage rates dictated by the terms of the collective bargaining agreement.⁷ Thereafter, the defendant agreed to discontinue the wage supplement policy. The defendant memorialized its agreement with the union in an October 19, 1993 letter, which indicated that all employees demoted from salaried positions to hourly status would "be paid no more than the maximum of the grade to which they are assigned" and that those employees who had been demoted prior to October 22, 1993, would again have the option of receiving a severance package, in the event that they did not choose to continue working as hourly employees. On November 21, 1993, the defendant stopped paying the plaintiffs the wage supplement and reduced the plaintiffs' wages to the maximum rate for the labor grades to which they had been assigned. Additional facts will be provided as necessary.

On May 16, 1994, the plaintiffs initiated the present action alleging breach of contract, promissory estoppel, negligent misrepresentation and violation of General Statutes §§ 31-71a.⁸ The plaintiffs alleged primarily that the wage supplement practice had created individual contracts for payments supplementing the maximum wages under the collective bargaining agreement and that the defendant had breached those individual contracts by discontinuing the phaseout policy. The defendant filed a petition for removal in the United States District Court for the District of Connecticut on June 14, 1994, arguing that the plaintiffs' claims were preempted by §§ 301 of the Labor Management Relations Act because they fell within the collective bargaining agreement in force between the union and the defendant. The District Court, Nevas, J., adopted the recommendation of the United States Magistrate Judge, Smith, J., concluding that the plaintiffs' claims were not preempted by federal law because they were based on individual contracts entered into before the plaintiffs had accepted the demotions and joined the bargaining unit. Accordingly, the District Court remanded the case to state court. Barbieri v. United Technologies Corp., United States District Court, Docket No. 3:94-0970 (D. Conn. July 24, 1995).

Following the remand, the defendant filed a motion for summary judgment in September, 1995. The defendant pressed its argument that the plaintiffs' state law claims were preempted by §§ 301 of the Labor Management Relations Act, and argued further that the claims were subject to preemption under the National Labor Relations Act. The trial court, Holzberg, J., denied the defendant's motion on August 14, 1996.

After the parties had conducted discovery, the defendant again moved for summary judgment in 1997. The defendant argued that the alleged contracts to pay the wage supplement had been modified by the union, which became the plaintiffs' authorized representative following their return to the bargaining unit. In essence, the defendant argued that the alleged contracts had been subsumed by the collective bargaining agreement, thus modifying its terms and again raising the specter of preemption under §§ 301 of the Labor Management Relations Act. The trial court, Aurigemma, J., denied the defendant's motion on October 28, 1998, agreeing with the prior rulings of both Judge Nevas and Judge Holzberg regarding preemption.

Thereafter, on May 6, 1999, the trial court⁹ granted the plaintiffs' motion for class certification with respect to their breach of contract and state statutory claims.¹⁰ A jury trial commenced and at the conclusion of the plaintiffs' case, the defendant moved for a directed verdict based on preemption under both the Labor Management Relations Act and the National Labor Relations Act. The trial court reserved its decision on that motion, allowing the case to proceed. At the conclusion of the trial, the jury returned a verdict for the defendant. Although the jury concluded that (1) a contract to pay the wage supplement had existed between the plaintiffs and the defendant, and (2) the defendant had breached that contract by ceasing the wage supplement phaseout policy in November of 1993, it determined that the defendant had proved its affirmative defense of accord and satisfaction. That defense had been premised on the fact that the plaintiffs, before the defendant eliminated the wage supplement policy, had been offered the same choice that they had been offered when they were first demoted to the hourly positions. That is, the defendant again had given the plaintiffs the option of leaving the company and receiving a severance package before the defendant terminated the wage supplement policy. The jury concluded that, by continuing to work after that option had been presented, the plaintiffs had manifested their consent to be paid in accordance with the wage rates dictated by the collective bargaining agreement, thereby agreeing to forgo the wage supplement phaseout.

Thereafter, the trial court orally denied the plaintiffs' motion to set aside the verdict. The next day, the plaintiffs moved for articulation and, on May 11, 2000, the trial court, contrary to its previous decision and relying on a case cited by the defendant in its motion for a directed verdict, concluded that the plaintiffs' state law claims were preempted by §§ 301 of the Labor Management Relations Act. Accordingly, the trial court rendered judgment for the defendant. The plaintiffs appealed to the Appellate Court, and we transferred the case to this court pursuant to General Statutes §§ 51-199 (c) a...