Clarke v. Serv. Emps. Int'l Union
| Decision Date | 16 September 2021 |
| Docket Number | No. 81166,No. 80520,80520 |
| Citation | 495 P.3d 462 |
| Parties | Robert CLARKE, an Individual, Appellant, v. SERVICE EMPLOYEES INTERNATIONAL UNION, an Unincorporated Association; and Nevada Service Employees Union, a/k/a Clark County Public Employees Association, SEIU 1107, a Nonprofit Cooperative Corporation, Respondents. Service Employees International Union, an Unincorporated Association; and Nevada Service Employees Union, a/k/a Clark County Public Employees Association, SEIU 1107, a Nonprofit Cooperative Corporation, Appellants, v. Dana Gentry, an Individual; and Robert Clarke, an Individual, Respondents. |
| Court | Nevada Supreme Court |
McAvoyAmaya & Revero and Michael J. McAvoyAmaya, Las Vegas, for Appellant/Respondent Robert Clarke and Respondent Dana Gentry.
Christensen James & Martin and Evan L. James, Las Vegas, for Respondent/Appellant Nevada Service Employees Union.
Rothner, Segall & Greenstone and Jonathan M. Cohen, Maria Keegan Myers, and Glenn Rothner, Pasadena, California, for Respondent/Appellant Service Employees International Union.
BEFORE THE SUPREME COURT, EN BANC.
These consolidated appeals arise from the termination of appellant's employment with the Nevada Service Employees Union. The main issue in the appeal in Docket No. 80520 concerns whether appellant's wrongful termination claims against the union respondents were conflict-preempted by the Labor Management Reporting and Disclosure Act (LMRDA), which promotes union democracy. Applying principles of conflict preemption, we hold that because Nevada's wrongful termination claims do not significantly conflict with any concrete federal interest expressed by the LMRDA, the LMRDA does not preempt these claims. Additionally, because appellant failed to show that a genuine dispute of material fact existed regarding his alter ego theory of liability, the district court did not err when it granted summary judgment in favor of one of the union respondents on that ground. As to the attorney fees issue in Docket No. 81166. we conclude that the district court acted within its discretion when it denied a union respondent's motion for attorney fees because rejection of the unions’ unclear offers of judgment was not grossly unreasonable.
Nevada Service Employees Union, Local 1107 is the Nevada chapter of Service Employees International Union (SEIU) (collectively the Unions). In August 2016, Local 1107 hired Robert Clarke as Director of Finance and Human Resources for the union, pursuant to an employment contract. In this senior level position, Clarke was responsible directly to the Local 1107 president, Cherie Mancini. The employment contract contained a for-cause termination provision stating that "[t]ermination of this employment agreement may be initiated by the [Local 1107] President for cause." A similar for-cause termination provision was contained in Local 1107's employment contract with Dana Gentry for her position as Communications Director. In performing their managerial duties with Local 1107, both Clarke and Gentry attended weekly meetings with Mancini and another employee, Peter Nguyen. Clarke. Gentry, and Nguyen collectively constituted Local 1107's "managers" or ‘‘directors."
In fall 2016, SEIU appointed a hearing master to hear grievances against Mancini and to make recommendations regarding the internal needs of Local 1107 In her April 2017 reports, the hearing master concluded that "[t]he overall pattern that emerges from the evidence is one of a President willing, and even inclined, to sideline her fellow officers so that she can function autocratically or, at best, with a small cadre of staff whose hiring was never even approved by the [Local 1107 Executive] Board." Because of the hearing master's reports, Local 1107's Executive Board voted to have SEIU impose a trusteeship over the chapter. The trustees, who acted on behalf of Local 1107 once appointed by SEIU, subsequently removed all board members from office, including Mancini, and terminated Clarke's and Gentry's employment.1
Clarke and Gentry filed the underlying complaint against the Unions, as well as against other defendants who are not named parties on appeal, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, wrongful termination, tortious discharge, and negligence (collectively the wrongful termination claims). The Unions served an NRCP 68 offer of judgment on Clarke and Gentry of $30,000 each, on behalf of all defendants, to dismiss all claims. Clarke and Gentry did not accept the offer of judgment. The Unions later moved for summary judgment, arguing that the LMRDA preempted Clarke's and Gentry's claims. SEIU also sought summary judgment on the basis that it owed Clarke and Gentry no duty because it had not employed them or entered into any employment contract with either of them. In Clarke and Gentry's opposition to those motions, they asserted for the first time that SEIU was the alter ego of Local 1107. The district court ultimately granted the Unions’ motions, concluding that the LMRDA preempted all of Clarke's and Gentry's claims. The court further concluded that SEIU was entitled to summary judgment because it had not employed or entered into a contract with Clarke or Gentry.
The Unions then moved for attorney fees based on their rejected offer of judgment, which the district court denied. While the court found that the offer of judgment complied with NRCP 68 and was reasonable in amount and timing, it also found that "it was not grossly unreasonable for [Clarke and Gentry] to reject the Offer of Judgment because the Offer of Judgment required a global resolution of all claims against all Defendants." Clarke, but not Gentry, appeals from the order granting summary judgment, and the Unions appeal from the order denying their motion for attorney fees.
The LMRDA does not preempt state law wrongful termination claims
We review questions of federal preemption and decisions granting summary judgment de novo. Nanopierce Techs., Inc. v. Depository Tr. & Clearing Corp., 123 Nev. 362, 370, 168 P.3d 73, 79 (2007) (); Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005) (). The Unions, relying on Finnegan v. Leu , 456 U.S. 431, 102 S.Ct. 1867, 72 L.Ed.2d 239 (1982), and Screen Extras Guild, Inc. v. Superior Court, 51 Cal.3d 1017, 275 Cal.Rptr. 395, 800 P.2d 873 (1990), argue that Nevada law wrongful termination claims conflict with the LMRDA's policy of ensuring democratic governance of labor unions, and thus the LMRDA preempts those wrongful termination claims, such that the district court properly granted summary judgment in their favor. We disagree.
"[W]hen a conflict exists between federal and state law, valid federal law overrides, i.e., preempts, an otherwise valid state law." Nanopierce Techs., 123 Nev. at 370, 168 P.3d at 79. In preemption analysis, courts must determine whether Congress expressly or impliedly intended to preempt state law. Id. Although there are different types of preemption, the only potentially applicable type of preemption in this matter—and the only type argued by the Unions—is conflict preemption. In analyzing whether conflict preemption applies, a court "examines the federal statute as a whole to determine whether a party's compliance with both federal and state requirements is impossible or whether, in light of the federal statute's purpose and intended effects, state law poses an obstacle to the accomplishment of Congress's objectives." Id. at 371-72, 168 P.3d at 80. In other words, we ask "whether the act's purpose would be frustrated if state law were to apply." Id. at 375, 168 P.3d at 82. A general tension with the broad or abstract goals of federal laws or programs is insufficient to warrant conflict preemption. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 633-34, 101 S.Ct. 2946, 69 L.Ed.2d 884 (1981). Instead, courts should not displace state law unless there is a "significant conflict" between the operation of the state law and concretely identifiable federal interests. Boyle v. United Techs. Corp., 487 U.S. 500, 507, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988). As "[s]tates possess broad authority under their police powers to regulate the employment relationship to protect workers within the [s]tate," MGM Grand Hotel-Reno, Inc. v. Insley, 102 Nev. 513, 518, 728 P.2d 821, 824 (1986) (quoting Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 756, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985) ), there must be a "clear and manifest" indication of Congress's intent to preempt state law, Nanopierce Techs., 123 Nev. at 370-71, 168 P.3d at 79 (quoting Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005) ) ( that "Congress's intent to preempt state law, in light of a strong presumption that areas historically regulated by the states generally are not superseded by a subsequent federal law, must be ‘clear and manifest’ ").
Clarke's wrongful termination claims—both in contract and in tort—are all based on his allegedly wrongful discharge from employment. Thus, for his claims to be viable, we must first determine whether the LMRDA, which has the goal of promoting union democracy, preempts Nevada law wrongful termination claims. We conclude it does not.
In Finnegan, on which the Unions rely, a newly elected union president fired several union business agents who, in their capacity as union members, supported a different candidate for union president. 456 U.S. at 433-34, 102 S.Ct. 1867. Relying on the LMRDA, which protects union members’ political rights, the business agents filed suit in federal district court, arguing that their firings were a form of "discipline" based on their exercise of guaranteed political rights and thus prohibited...
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