Chavez v. Copper State Rubber of Arizona, Inc.

• Decision Date: 14 February 1995
• Docket Number: No. 1,CA-CV,1
• Parties: , 148 L.R.R.M. (BNA) 2602 Andy CHAVEZ and Isabel Chavez, husband and wife, Plaintiffs-Appellants/Cross-Appellees, v. COPPER STATE RUBBER OF ARIZONA, INC., an Arizona corporation; Joyce Grimes and John Doe Grimes, wife and husband, Defendants-Appellees/Cross-Appellants. 92-0437.
• Court: Arizona Court of Appeals

Page 725

897 P.2d 725

182 Ariz. 423, 148 L.R.R.M. (BNA) 2602

Andy CHAVEZ and Isabel Chavez, husband and wife, Plaintiffs-Appellants/Cross-Appellees, v. COPPER STATE RUBBER OF ARIZONA, INC., an Arizona corporation; Joyce Grimes and John Doe Grimes, wife and husband, Defendants-Appellees/Cross-Appellants.

No. 1 CA-CV 92-0437.

Court of Appeals of Arizona,

Division 1, Department B.

Feb. 14, 1995.

Review Denied June 29, 1995.

[182 Ariz. 425] Francis G. Fanning, Phoenix, for plaintiffs-appellants/cross-appellees.

Snell & Wilmer by Robert J. Deeny, Thomas J. Kennedy, Daniel J. McAuliffe, Phoenix, for defendants-appellees/cross-appellants.

OPINION

McGREGOR, Presiding Judge.

Appellant Andy Chavez (Chavez) brought claims against his employer for breach of employment contract and for wrongful discharge and a claim against the employer's general manager for intentional interference with contract. The issue is whether federal labor law preempts these state court claims. We conclude the doctrine of preemption applies and deprives the state courts of jurisdiction.

I.

From 1978 until April 1990, Chavez worked for Copper State Rubber of Arizona, Inc. (Copper State), serving in a supervisory position for the last nine years. At the end of 1989, employees at Copper State voted to establish a union. According to Chavez, Joyce Grimes, manager of Copper State when Chavez's employment at Copper State ended, instructed Chavez to treat non-union employees more favorably than union employees. When Chavez refused, Grimes allegedly accused Chavez of being disloyal to the company and supporting the union. Copper State and Grimes (collectively, appellees) gave Chavez three options: resign, be laid off with good references, or be terminated. Chavez requested a fourth option of consulting an attorney, to which appellees agreed. After his attorney's subsequent discussions with Copper State and Grimes, Chavez returned to work. When he returned, Grimes presented Chavez with a warning report reprimanding him for betraying the company, stealing letterhead stationery to assist an illegal act of another employee, repeating confidential management information to employees, and supporting the union. Chavez refused to sign the reprimand; the parties dispute whether he then quit or was terminated.

About the time that Chavez's employment with Copper State ended, the union filed a complaint with the National Labor Relations Board (NLRB) against Copper State for unfair labor practices in connection with other events. The union did not challenge Chavez's discharge in its complaint. Chavez's wife stated in an affidavit that she had contacted two agents at the NLRB, who told her that Chavez could not obtain relief from the NLRB because he was a supervisor.

Chavez then filed this action in superior court, alleging breach of contract, wrongful discharge, and intentional interference with contract. In the allegations common to all counts, Chavez alleged that "Grimes told [Chavez] that he should discriminate and make life hard for those supporting the union, but he should not criticize or discipline non-union employees for improper performance of their jobs"; that "[Chavez] protested this directive"; and that "Grimes falsely accused [Chavez] of supporting the union and being disloyal to management." He asserted that appellees breached his contract of employment by terminating him without cause and wrongfully terminated him in retaliation for refusing to coerce employees not to join the union. He further alleged that Grimes wrongfully interfered with his employment contract with Copper State.

Appellees moved for summary judgment, arguing that the National Labor Relations Act, 29 U.S.C. § 158(a)(1), (a)(3) (the Act) preempts Chavez's claims; that Chavez was an at-will employee; that Copper State had cause to terminate Chavez; and that Chavez quit his job, so Copper State did not terminate him at all. The trial court denied the motion.

Copper State and Grimes moved for reconsideration, conceding for the purposes of the motion that Chavez was a supervisor and that Copper State discharged him for refusing to commit unfair labor practices. Upon reconsideration, the trial court concluded that the Act preempts Chavez's claims for wrongful discharge and intentional interference with contract and entered judgment pursuant to Rule 54(b), Ariz.R.Civ.P., for appellees on those claims. Chavez brought this appeal. ¹ The court limited Chavez's breach of contract claim to grounds other than refusing to engage in unfair labor practices. Copper State and Grimes cross-appealed, arguing that the Act also preempts the breach of contract claim.

We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101.B. See M & M Auto Storage Pool, Inc. v. Chemical Waste Management, Inc., 164 Ariz. 139, 141, 791 P.2d 665, 667 (App.1990).

II.

For the purposes of the motion, Copper State and Grimes stipulated to the material facts as alleged by Chavez. We therefore review the grant of summary judgment to determine whether appellees are entitled to judgment as a matter of law. Schroeder v Hudgins, 142 Ariz. 395, 397, 690 P.2d 114, 116 (App.1984).

III.

Congress passed the Act in an effort to achieve uniform and effective enforcement of a national labor policy. Local 926, Int'l Union of Operating Eng'rs v. Jones, 460 U.S. 669, 681, 103 S.Ct. 1453, 1461, 75 L.Ed.2d 368 (1983). The Supreme Court "has often been asked to determine whether particular state causes of action or regulations may coexist with the comprehensive amalgam of substantive law and regulatory arrangements that Congress set up in [the Act]...." Id. at 675, 103 S.Ct. at 1458. If the causes of action cannot coexist, the doctrine of preemption applies.

The Court has "stated and restated" its approach to the preemption issue. The first question is "whether the conduct that the State seeks to regulate or to make the basis of liability is actually or arguably protected or prohibited by [the Act]," id. at 676, 103 S.Ct. at 1458:

When it is clear or may be fairly assumed that the activities which a State purports to regulate are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8, due regard for the federal enactment requires that state jurisdiction must yield. To leave the States free to regulate conduct so plainly within the central aim of federal regulation involves too great a danger of conflict between power asserted by Congress and requirements imposed by state law.

San Diego Building Trades Council, Millmen's Union, Local 2020 v. Garmon, 359 U.S. 236, 244, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959) (emphasis added).

If the conduct at issue is arguably protected or prohibited, the NLRB, not the state court, determines whether the conduct falls within the NLRB's jurisdiction:

At times it has not been clear whether the particular activity regulated by the States was governed by § 7 or § 8 or was, perhaps, outside both these sections. But courts are not primary tribunals to adjudicate such issues. It is essential to the administration of the Act that these determinations be left in the first instance to the National Labor Relations Board. What is outside the scope of this Court's authority cannot remain within a State's power and state jurisdiction too must yield to the exclusive primary competence of the Board.

. . . . .

When an activity is arguably subject to § 7 or § 8 of the Act, the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board if the danger of state interference with national policy is to be averted.

Id. at 244-45, 79 S.Ct. at 779 (citations omitted) (emphasis added).

Finally, we consider whether the activity regulated is "only a peripheral concern of the Act" or touches interests "deeply rooted in local feeling and responsibility...." Jones, 460 U.S. at 676, 103 S.Ct. at 1459. If the balance of those interests weighs in favor of the state interest, preemption does not apply.

IV.

A.

We turn, then, to the initial inquiry whether Copper State's conduct in discharging Chavez is conduct arguably prohibited by the Act. In determining whether preemption applies, we look to the nature of the conduct involved, rather than to the legal theories advanced by Chavez. See Motor Coach Employees v. Lockridge, 403 U.S. 274, 292, 91 S.Ct. 1909, 1920-21, 29 L.Ed.2d 473 (1971). If the challenged conduct is arguably prohibited by the Act, due regard for the federal enactment requires us to yield jurisdiction.

Chavez's status as a supervisor affects our inquiry concerning whether the conduct involved is arguably regulated by the Act. Because the Act excludes supervisors from its definition of "employee," 29 U.S.C.A. § 152(3); Automobile Salesmen's Union Local 1095 v. NLRB, 711 F.2d 383, 386 (D.C.1983), a supervisor's discharge usually is not of concern to the NLRB. Nevertheless, courts have carved out three basic exceptions to this rule. An employer's conduct toward a supervisor may violate Section 8(a)(1) of the Act ² (1) if the employer disciplines a supervisor for testifying before the NLRB or during the processing of an employee's grievance; (2) if the employer disciplines a supervisor for refusing to commit an unfair labor practice; or (3) if the employer discharges a supervisor who hires his own crew as a pretext for terminating his pro-union crew. Automobile Salesmen's, 711 F.2d at 386. (citations omitted).

Chavez's claim that Copper State discharged him because he refused to discriminate against union members falls squarely within the second exception, which prohibits employers from funnelling unfair labor practices through a supervisor. Gerry's Cash Markets, Inc. v. NLRB, 602 F.2d 1021 (1st Cir.1979) illustrates this exception. ³ In that case, Gerry's implemented a "no solicitation" rule that banned any solicitation or non-business activity on company property. An...