Berda v. CBS Inc.

• Decision Date: 20 July 1989
• Docket Number: No. 88-3405,88-3405
• Parties: 131 L.R.R.M. (BNA) 3073, 112 Lab.Cas. P 11,341, 4 Indiv.Empl.Rts.Cas. 904 Martin W. BERDA, and Linda Berda, his wife, Appellants, v. CBS INC., a corporation, Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 20

881 F.2d 20

131 L.R.R.M. (BNA) 3073, 112 Lab.Cas. P 11,341,

4 Indiv.Empl.Rts.Cas. 904

Martin W. BERDA, and Linda Berda, his wife, Appellants, v. CBS INC., a corporation, Appellees.

No. 88-3405.

United States Court of Appeals, Third Circuit.

Argued Nov. 1, 1988.

Decided July 20, 1989.

Joseph J. Hinchliffe (argued), Tarasi and Johnson, P.C., Pittsburgh, Pa., for appellants.

Arthur J. Schwab (argued), Reed, Smith, Shaw & McClay, Pittsburgh, Pa., Helen M. Gold, CBS Inc., New York City, for appellees.

Before GIBBONS, Chief Judge, BECKER and WEIS, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

This case involves the circuit-splitting question whether state contract and tort claims for monetary relief brought by a bargaining unit employee against his employer based upon alleged misrepresentations of job security, made before the employee became a member of the bargaining unit, which conferred additional rights to those afforded by the collective bargaining agreement, are preempted by section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. Sec. 185(a) (1982).

Appellant Martin Berda ("Berda") brought this suit against his former employer, appellee CBS Inc. ("CBS"), asserting two contract claims (breach of an individual employment contract and promissory estoppel) and two tort claims (fraud and negligent misrepresentation). Appellant Linda Berda, Berda's wife, asserts a derivative claim for loss of consortium. All of the claims are founded upon Pennsylvania law, and the Berdas seek only monetary relief. CBS contends that since Berda's employment with CBS was governed by the terms and conditions of a collective bargaining agreement between CBS and the International Brotherhood of Electrical Workers ("IBEW")--a contention not disputed by Berda--the state law claims are preempted by the LMRA.

The district court concluded that resolution of Berda's claims was dependent upon the collective bargaining agreement, that the alleged oral contract was inconsistent with the collective agreement, and that the claims were therefore preempted by section 301. Consequently, the court granted CBS's motion for judgment on the pleadings or, in the alternative, for summary judgment inasmuch as the complaint was not filed within the six-month statute of limitations applicable to actions arising under section 301. Because we believe that Berda can establish the allegations in his well-pleaded complaint without asking the court to analyze the collective bargaining agreement, we will reverse and remand to the district court for further proceedings.

I.

The facts relevant to this appeal are essentially uncontested. On February 27, 1986, while employed as a technician by station WPXI in Pittsburgh, Berda met with Emil Franks and M. Lynwood Heighes, Jr., employees of CBS, to discuss his possible future employment with CBS in Washington, D.C. According to the complaint, Berda was told at this meeting, among other things, that he would be guaranteed employment with CBS for the reasonably foreseeable future, and that any job offered to him would not be seasonal or temporary but would be a permanent position. CBS subsequently offered Berda employment in Washington, D.C., and, in April 1986, allegedly relying upon CBS's promises, Berda and his wife moved to Washington so that he could assume his duties as a CBS technician there.

Shortly after commencing work at CBS, Berda joined the IBEW. The parties agree that Berda's employment at CBS was covered by the terms and conditions of a collective bargaining agreement between CBS and the IBEW. Section 5.03 of that agreement pertains to layoffs, and provides in pertinent part that:

[l]ayoffs caused by a reduction of staff shall be made in the inverse order of seniority within each of the separate units as defined in Section 5.02 within the jurisdiction of each local union.

Section 5.02 of the collective bargaining agreement contains the provisions relating to seniority of all employees covered by the agreement.

On August 29, 1986, less than five months after he began working for CBS, and in accordance with the terms of the collective bargaining agreement, Berda was laid off as part of a company-wide reduction in force. Berda alleges that CBS had decided prior to the February 27 meeting with him to conduct extensive layoffs in the department and division of CBS in which he was eventually offered employment, and hence that Frank and Heighes knew or should have known that their promises and representations to him were false.

On January 19, 1988, Berda filed a complaint in the Court of Common Pleas of Allegheny County, alleging breach of contract (or, alternatively, promissory estoppel) and tortious misrepresentation. The complaint did not refer to the collective bargaining agreement. CBS removed the case to the district court for the Western District of Pennsylvania alleging both federal question jurisdiction-on the ground that the suit was preempted by section 301 of the LMRA, and thus, stated a cause of action, if any, under section 301, see Avco Corp. v. Machinists, 390 U.S. 557, 558, 88 S.Ct. 1235, 1236, 20 L.Ed.2d 126 (1968) ¹-and diversity jurisdiction. ² CBS then moved for judgment on the pleadings or summary judgment.

The district court held that any resolution of the state law claims was substantially dependent upon an analysis of section 5.03 of the collective bargaining agreement between CBS and the IBEW and that Berda's alleged individual contract was "inconsistent with section 5.03 ... and would limit or condition its terms." Dist.Ct.Op. at 5 (June 21, 1988). It therefore held that the claims were preempted by section 301 of the LMRA. Finding that the Berdas could not maintain the suit as an LMRA action because it was not filed within the LMRA's six-month statute of limitations, see DelCostello v. Teamsters, 462 U.S. 151, 169-72, 103 S.Ct. 2281, 2293-95, 76 L.Ed.2d 476 (1983) (applying six-month statute of limitation in a section 301 cause of action), the district court dismissed the action. The Berdas appeal. The issue before us is whether the district court was correct in concluding that Berda could bring suit, if at all, only pursuant to section 301. ³

II.

A.

Section 301(a) of the Labor Management Relations Act provides as follows:

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ... may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

29 U.S.C. Sec. 185(a). On its face, this statute provides for federal jurisdiction over controversies involving collective bargaining agreements. However, the Supreme Court has concluded that section 301 also expresses a congressional intent that the federal courts develop a federal common law to be applied in suits for enforcement of collective bargaining agreements. See Textile Workers v. Lincoln Mills, 353 U.S. 448, 451, 77 S.Ct. 912, 915, 1 L.Ed.2d 972 (1957).

When a suit stating a claim under section 301 is brought, state contract law is displaced, and the collective agreement is interpreted under this federal common law. See Teamsters v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d593 (1962). The purpose of preempting state contract law with a uniform federal law is to allow parties to collective bargaining agreements to have some certainty as to the way that agreements will be construed by courts. As the Supreme Court explained:

[T]he subject matter of Sec. 301(a) "is peculiarly one that calls for uniform law." ... The possibility that individual contract terms might have different meanings under state and federal law would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements. Because neither party could be certain of the rights which it had obtained or conceded, the process of negotiating an agreement would be made immeasurably more difficult by the necessity of trying to formulate contract provisions in such a way as to contain the same meaning under two or more systems of law which might some day be invoked in enforcing the contract.

Id. at 103, 82 S.Ct. at 577 (citation omitted). Lack of certainty as to the meaning of contract terms could lead to lack of agreement; thus, if state laws were not preempted, industrial peace would be threatened. Id. at 104, 82 S.Ct. at 577.

The Supreme Court has also held that section 301 preemption extends beyond contract claims and reaches certain claims sounding in tort. See Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211, 105 S.Ct. 1904, 1911, 85 L.Ed.2d 206 (1985). In Lueck, the Court noted that if section 301 were held not to preempt state tort law, it "would elevate form over substance and allow parties to evade the requirements of Sec. 301 by relabeling their contract claims as claims for tortious breach of contract." Id. at 211, 105 S.Ct. at 1911. Thus, the Court adopted the following rule: "when resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, the claim must either be treated as a Sec. 301 claim ... or dismissed as pre-empted by federal labor-contract law." Id. at 220, 105 S.Ct. at 1915 (citation omitted) (emphasis added). See also International Brotherhood of Electrical Workers v. Hechler, 481 U.S. 851, 107 S.Ct. 2161, 95 L.Ed.2d 791 (1987) (claim that union breached duty of care to ensure safety of workplace preempted by Sec. 301 because substantially dependent on whether under the collective bargaining agreement the union had assumed this duty).

However, the Supreme Court has made it clear that "not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is pre-empted by Sec. 301." Lueck, 471 U.S. at 211, 105...