Brundridge v. Fluor Federal Services Inc.

• Decision Date: 04 December 2001
• Docket Number: No. 20157-1-III.,20157-1-III.
• Citation: 109 Wash.App. 347,35 P.3d 389
• Parties: Scott BRUNDRIDGE, Donald Hodgin, Jessie James, Clyde Killen, Pedro Nicacio, Shane O'Leary, Raymond Richardson, James Stull, Randall Walli, David Faubion, and Charles Cable, Appellants, v. FLUOR FEDERAL SERVICES INC. (formerly, Fluor Daniel Northwest, Inc.), a Washington Corporation, Fluor Hanford, Inc., (formerly, Fluor Daniel Hanford, Inc.), a Washington Corporation, Respondents, Jerry Nichols, an individual and his marital community, David Foucault, an individual and his marital community, and Jim Holladay, an individual and his marital community, Defendants.
• Court: Washington Court of Appeals

35 P.3d 389

109 Wash.App. 347

Scott BRUNDRIDGE, Donald Hodgin, Jessie James, Clyde Killen, Pedro Nicacio, Shane O'Leary, Raymond Richardson, James Stull, Randall Walli, David Faubion, and Charles Cable, Appellants, v. FLUOR FEDERAL SERVICES INC. (formerly, Fluor Daniel Northwest, Inc.), a Washington Corporation, Fluor Hanford, Inc., (formerly, Fluor Daniel Hanford, Inc.), a Washington Corporation, Respondents, Jerry Nichols, an individual and his marital community, David Foucault, an individual and his marital community, and Jim Holladay, an individual and his marital community, Defendants.

No. 20157-1-III.

Court of Appeals of Washington, Division 3, Panel Six.

December 4, 2001.

John P. Sheridan, Dana L. Gold, Seattle, for Appellants.

William R. Squires, Lawrence C. Locker, Seattle, for Respondents.

SCHULTHEIS, J.

We are concerned today with federal preemption of a state-law claim filed by workers who were parties to a collective bargaining agreement. In a recent decision, the United States Supreme Court held that the Federal Arbitration Act, 9 U.S.C. §§ 1 to 16, requires enforcement of arbitration clauses in employment contracts, subject to certain exceptions. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). The 11 appellants here¹ were union pipe fitters working at the Hanford nuclear weapons facility as employees of Fluor Daniel Northwest, Inc. In 1999, they filed a complaint against Fluor Federal Services, Inc. and Fluor Hanford, Inc. (collectively referred to herein as "Fluor"),² and three administrative employees of Fluor. They alleged they were wrongfully terminated in retaliation for their whistleblowing activities. Before trial, Fluor moved for dismissal and a remand for arbitration. Based on Circuit City, the trial court granted Fluor's motion, but stayed the order pending review by this court.

On appeal, the pipe fitters contend the decision in Circuit City does not apply to collective bargaining agreements and at any rate does not apply to the arbitration provision at issue here. Additionally, the pipe fitters argue that Fluor is collaterally estopped from raising the issue of federal preemption based on § 301 of the Labor Management Relations Act, 1947 (29 U.S.C. § 185(a)), and contend state court jurisdiction over this case is not preempted by the National Labor Relations Act (29 U.S.C. §§ 157, 158). We find that the arbitration provision in the pipe fitters' collective bargaining agreement does not mandate arbitration for a claim of wrongful discharge in violation of public policy. We further find no federal preemption. Accordingly, we reverse and remand for trial.

FACTS

Because this is an appeal of a trial court's grant of a motion to dismiss, we review de novo, drawing all inferences from the facts in favor of the plaintiffs. In re Estate of Peterson, 102 Wash.App. 456, 462, 9 P.3d 845 (2000), review denied, 142 Wash.2d 1021, 16 P.3d 1266 (2001). According to the evidence presented by the pipe fitters, all were members of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local No. 598. As union members, they were parties to a collective bargaining agreement (CBA) that included a grievance procedure requiring binding arbitration for any disputes arising "out of the interpretation or application of this AGREEMENT." Clerk's Papers (CP) at 171.

In late May 1997, five of the pipe fitters refused to install valves on a pipeline running through a nuclear waste facility because they believed the valves were underrated for the degree of pressure that would be placed on them. Higher rated valves were soon provided, and the five pipe fitters installed them. A few days later, the five, along with two other crewmembers, were laid off. After the pipe fitters were laid off, several other pipe fitters vocally supported the terminated workers. These pipe fitters lost their jobs in March and April 1998 and May 2000.

In June 1997, the union filed a grievance pursuant to the CBA protesting the layoffs of the first pipe fitters, but then withdrew the grievance in early February 1998 for lack of evidence that the CBA had been violated. The first laid-off pipe fitters were reinstated in March 1998, but they were again laid off in October and November 1998. All of the pipe fitters filed complaints with the Department of Labor, alleging that Fluor had retaliated against them in violation of the whistleblower protection provisions of the Energy Reorganization Act, 42 U.S.C. § 5851. In March 2000, however, they dismissed their administrative claims. They had filed suit in state court in 1999 for wrongful discharge in violation of public policy and for civil conspiracy. Eventually all of the appellants joined this lawsuit.

Fluor filed a notice of removal of civil action to United States District Court in August 1999, asserting federal jurisdiction under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185. After reviewing the pipe fitters' complaint, the district court judge found that the claims did not require interpretation of the terms of the CBA and therefore were not preempted by § 301. Additionally finding that the plaintiffs' complaint did not assert a federal law claim and did not rest solely on federal public policies, the district court granted the plaintiffs' motion to remand to state court.³ The civil conspiracy claim was dismissed on summary judgment in September 2000.⁴ After extensive discovery and delay, trial was set to begin in May 2001.

In March 2001, the United States Supreme Court decided Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001), which concluded that the Federal Arbitration Act, 9 U.S.C. §§ 1 to 16, requires the enforcement of arbitration clauses in employment contracts other than the contracts of transportation workers. This decision overruled previous Ninth Circuit authority. Circuit City, 121 S.Ct. at 1306, 1311. On the basis of Circuit City, Fluor moved in April to dismiss or to stay the action in favor of arbitration. After a hearing on May 3, 2001, the trial court granted the motion from the bench, staying the case pending appeal to this court.

APPLICATION OF THE FEDERAL ARBITRATION ACT AFTER CIRCUIT CITY

The purpose of the Federal Arbitration Act (FAA) is to overcome the courts' historical reluctance to enforce agreements to arbitrate. Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 270, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). To achieve this purpose, the FAA compels judicial enforcement of a wide range of arbitration agreements. 9 U.S.C. § 2; Circuit City, 121 S.Ct. at 1307. However, § 1 of the FAA excludes from the act's coverage "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C.A. § 1 (West 1999).

Prior to the decision in Circuit City, most federal courts of appeal held that this exception was limited to written arbitration agreements involving transportation workers. Only the Ninth Circuit interpreted the § 1 exception to exclude all contracts of employment from the reach of the FAA. Circuit City, 121 S.Ct. at 1307. Circuit City laid the issue to rest by holding that § 1 exempts from the FAA only contracts of employment of transportation workers. Id. at 1311. The employment agreement in Circuit City was an individual contract and the application of the FAA was in federal court. In dicta, the court referred to its earlier decisions in Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984) and Allied-Bruce as enduring authority for the rule that the FAA applies as well in state courts and preempts state antiarbitration laws to the contrary. Circuit City, 121 S.Ct. at 1312-13.

The pipe fitters argue here that although Circuit City and the FAA apply to employment contracts entered into by individuals, they do not apply to union-negotiated CBAs. But the very case cited for this assertion, Pryner v. Tractor Supply Co., 109 F.3d 354, 357 (7th Cir.1997), concludes after reviewing numerous court decisions that the FAA is generally applicable to CBAs. See also Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 34, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991)

(discussing the application of the FAA to a collective bargaining agreement arbitration clause in Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974)). We conclude as a matter of law that the FAA is applicable to the CBA in the present case. What remains is to determine whether the arbitration clause in the pipe fitters' CBA waives their rights to a judicial forum for the state-law claim.

Collective bargaining agreements, while beneficial in many respects to both the worker and the employer, may be less than optimum in meeting the individual needs of particular workers. With collective bargaining arbitration, the interests of the individual may be subordinated to the collective interests of all employees. Gilmer, 500 U.S. at 34, 111 S.Ct. 1647. In recognition of that inherent tension, federal courts have established that an arbitration clause in a CBA will not waive an employee's right to a judicial forum unless such a waiver is clear and unmistakable. Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 79-80, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998) (right to a federal forum); Safrit v. Cone Mills Corp., 248 F.3d 306, 308 (4th Cir.) (right to federal forum), cert. denied, ___ U.S. ___, 122 S.Ct. 464, 151 L.Ed.2d 381 (2001).

A clear and unmistakable waiver of the right to a judicial forum can occur in two ways. Safrit, 248 F.3d at 308. First, the CBA may contain an explicit arbitration clause wherein the parties agree to submit all causes of action arising out of employment to arbitration. Id. Second, the agreement may have a general clause requiring arbitration under the employment agreement, coupled with a...