Carlson v. Hutzel Corp. of Michigan

• Decision Date: 01 June 1990
• Docket Number: Docket No. 102776
• Citation: 183 Mich.App. 508,455 N.W.2d 335
• Parties: , 121 Lab.Cas. P 56,835 Patricia CARLSON, Rosann Clementino, Antoinette Fink, and Deloris Moore, Plaintiffs-Appellees and Cross-Appellants, v. HUTZEL CORPORATION OF MICHIGAN, a Michigan nonprofit corporation, d/b/a Hutzel Hospital, Defendant-Appellant and Cross-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 335

455 N.W.2d 335

183 Mich.App. 508, 121 Lab.Cas. P 56,835

Patricia CARLSON, Rosann Clementino, Antoinette Fink, and Deloris Moore, Plaintiffs-Appellees and Cross-Appellants, v. HUTZEL CORPORATION OF MICHIGAN, a Michigan nonprofit corporation, d/b/a Hutzel Hospital Defendant-Appellant and Cross-Appellee.

Docket No. 102776.

Court of Appeals of Michigan.

Submitted Feb. 5, 1990.

Decided May 7, 1990.

Released for Publication June 1, 1990.

Mueckenheim & Mueckenheim, P.C. by Robert C. Mueckenheim, Detroit, for plaintiffs-appellees and cross-appellants.

Dykema Gossett by Charles C. DeWitt, Terrence E. Haggerty and Susan E. Mason, Detroit, for defendant-appellant and cross-appellee.

Before SULLIVAN, P.J., and DOCTOROFF and FITZGERALD, ^* JJ.

SULLIVAN, Presiding Judge.

This is a wrongful discharge case. Plaintiffs were nonunion nursing administrators at defendant Hutzel Hospital. The only claims pertinent to this appeal are plaintiffs' claims that defendant constructively discharged them in breach of their alleged just-cause employment contracts and in violation of public policy. Only the former claim was submitted to the jury, which returned verdicts in favor of plaintiffs. The latter claim was dismissed by the trial court on defendant's motion for a directed verdict following plaintiffs' case in chief. Defendant now appeals, raising several issues. We reverse the jury verdicts because we conclude that the grievance and arbitration procedure was a part of plaintiffs' employment contract and, as such, was plaintiffs' sole remedy. Because of our resolution of that issue, we need not reach plaintiffs' issues on cross appeal.

Defendant hospital was experiencing severe financial problems in 1983. To help alleviate these problems to some extent, Frank Iacobell, president and chief executive officer at defendant hospital, devised a plan whereby several unionized licensed practical nurses would be laid off. In turn, the nursing administrators and educators who were registered nurses, including plaintiffs, would be assigned to work on hospital floors either caring for patients or overseeing patient care. Plaintiffs resigned rather than implement what they believed to be Iacobell's plan because they did not feel competent to care for patients. ¹

I

The first issue raised by defendant is whether plaintiffs' claims are preempted by the National Labor Relations Act, 29 U.S.C. Sec. 151 et seq. We conclude that they are not.

Defendant argues that plaintiffs' claims are preempted because they concern an activity that is actually or arguably protected or prohibited by the NLRA. San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959). However, if the conduct at issue "is of only peripheral concern to the federal law or touches interests deeply rooted in local feeling and responsibility," Belknap, Inc v. Hale, 463 U.S. 491, 498, 103 S.Ct. 3172, 3177, 77 L.Ed.2d 798 (1983), then the state law claims survive. See also 359 U.S. at 243-244, 79 S.Ct. at 778-779. "The court balances the state's interest in regulating or promoting a remedy for the conduct against the intrusion in the NLRB's jurisdiction and the risk that the state's determination will be inconsistent with provisions of the NLRA." Bullock v. Automobile Club of Michigan, 432 Mich. 472, 493, 444 N.W.2d 114 (1989), reh. den. 433 Mich. 1201 (1989). Moreover, in Sears, Roebuck & Co v. Carpenters, 436 U.S. 180, 197, 98 S.Ct. 1745, 56 L.Ed.2d 209 (1978), the United States Supreme Court announced the following focus for a preemption analysis:

The critical inquiry, therefore, is not whether the State is enforcing a law relating specifically to labor relations or one of general application but whether the controversy presented to the state court is identical to ... or different from ... that which could have been, but was not, presented to the Labor Board. For it is only in the former situation that a state court's exercise of jurisdiction necessarily involves a risk of interference with the unfair labor practice jurisdiction of the Board which the arguably prohibited branch of the Garmon doctrine was designed to avoid.

Here, even though defendant's conduct is arguably prohibited by the NLRA, it nevertheless can be challenged in state court to the extent that it forms the basis of plaintiffs' claims. Plaintiffs' breach of contract claim involves a significant state interest because this state has a substantial interest in adjudicating contractual disputes arising within its jurisdiction. See Belknap, 463 U.S. at 511-512, 103 S.Ct. at 3183-3184, and Roberts v. Automobile Club of Michigan, 138 Mich.App. 488, 497, 360 N.W.2d 224 (1984), lv. den. 424 Mich. 867 (1986), cert. den. sub. nom. Automobile Club of Michigan v. Roberts, 479 U.S. 889, 107 S.Ct. 289, 93 L.Ed.2d 263 (1986). Furthermore, because plaintiffs' public policy claim alleges that defendant's conduct violated Michigan public policy and threatened the health, safety and welfare of patients at defendant hospital, that claim also concerns a significant state interest.

On the other side of the scale, we note that exercise of this state's jurisdiction would not interfere with the jurisdiction of the NLRB. We so conclude because the controversy presented to the state court was different from that which might have been, but was not, presented to the NLRB. Plaintiffs' breach of contract claim required the jury to determine whether plaintiffs' employment contract with defendant provided that they could be discharged only for just cause, whether defendant had just cause to discharge plaintiffs and whether defendant made plaintiffs' working conditions so intolerable that they justifiably resigned. See, e.g., Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980), reh. den. 409 Mich. 1101 (1980), and Jenkins v. Southeastern Michigan Chapter, American Red Cross, 141 Mich.App. 785, 796, 369 N.W.2d 223 (1985). Plaintiffs' public policy claim, had it gone to the jury, would have required the jury to determine whether defendant's conduct violated the public policy of this state. On the other hand, the controversy which could have been presented to the NLRB under the NLRA would have required the NLRB to determine whether the act of replacing laid-off union employees with their nonunion supervisors was an unfair labor practice. In other words, the issue in the state law controversy was not whether defendant's conduct was an unfair labor practice, the unfair labor practice having to do with the fact that the laid-off LPNs were unionized but, rather, was whether defendant's conduct violated an alleged employment contract or public policy, which issue is unrelated to the fact that the LPNs were unionized. Therefore, we conclude, plaintiffs' claims were not preempted by federal law.

II

The second issue defendant raises on appeal is whether an employer can unilaterally change a written policy statement to provide for a binding arbitration procedure without having first obtained the consent of the existing employees to whom the procedure applies. We answer in the affirmative. Therefore, plaintiffs' wrongful discharge claims were barred because plaintiffs failed to use the arbitration procedure. The trial court thus erred by failing to grant defendant's motion for accelerated judgment on this basis. (Prior to trial, defendant had moved for accelerated judgment under GCR 1963, 116.1.)

In Toussaint, supra, our Supreme Court held that "an employer's express agreement to terminate only for cause, or statements of company policy and procedure to that effect, can give rise to rights enforceable in contract." Id., 408 Mich. p. 610, 292 N.W.2d 880. See also id., pp. 598-599, 613, 614-615, 618-619, 620-621, 292 N.W.2d 880. Although those rights are enforceable in contract, they do not necessarily arise under general contract principles. As the Toussaint Court explained, once an employer establishes personnel policies or procedures and...