Fair Employment & Housing v. Verizon Cal.

• Decision Date: 28 April 2003
• Docket Number: No. G029912.,G029912.
• Parties: DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING, Plaintiff and Respondent, v. VERIZON CALIFORNIA, INC., Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

133 Cal.Rptr.2d 258

108 Cal.App.4th 160

DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING, Plaintiff and Respondent, v. VERIZON CALIFORNIA, INC., Defendant and Appellant.

No. G029912.

Court of Appeal, Fourth District, Division 3.

April 28, 2003.

Rehearing Denied May 28, 2003.

Swerdlow Florence Sanchez & Rathbun, Janet I. Swerdlow; and Michael C. Levine for Defendant and Appellant.

Paul R. Ramsey, Chief Counsel, Joseph H. Duff and Bert Bresticker, Senior Staff Counsel, and James A. Otto, Staff Counsel, for Plaintiff and Respondent.

OPINION

SILLS, P.J.

I

Our state's family leave act¹ allows employees in firms over a certain size to have up to 12 weeks off a year to care for an immediate family member with a "serious health condition," or simply because of the employee's own serious health condition.² The right is for time off without fear of losing one's job,³ but not necessarily paid time off. The family leave act is quite explicit that, with one exception, an employer is not required to pay for time off for leave taken under the act.

The one exception is if the employee would have the right to be paid for the time anyway. If the employee has "accrued vacation leave or other accrued time off or "other paid ... time off negotiated with the employer," the employee may use that time for family leave, and get paid for it.⁴

The present appeal involves a dispute as to whether an employee, being treated by a chiropractor for a bad back and having 300 hours sick leave, had the right to take the full 12 weeks of family leave with pay but without providing verification of injury from a medical specialist. Specifically, Denise Harris, an employee of what is now Verizon, requested family leave for low back problems on an intermittent basis in the summer and fall of 1998. There is no doubt that she was allowed the full time off and no hint that she was penalized by way of demotion or otherwise for taking the time off.

For the first four weeks Harris was paid for the time off, but in July Verizon sent her a letter saying that she needed a medical report from an orthopedist or neurologist showing total incapacitation. She never provided one. Nor did she provide X-rays from her chiropractor; indeed, it is undisputed that her chiropractor never took an X-ray of her.

Harris is an hourly worker covered by a collective bargaining agreement negotiated by the Communications Workers of America with Verizon. In August 1998 Harris filed a union grievance, alleging that Verizon had violated the part of the collective bargaining agreement governing paid time off for sickness and disability, i.e., article 32 of the agreement. The grievance was settled with Verizon paying Harris for any absence related to her back injury and which occurred prior to its letter telling her a specialist report was required (July 8, 1998). However, about a year and one-half later, in January 2000, the California Department of Fair Employment and Housing filed a complaint alleging that Verizon's failure to pay Harris for all absences after July 8, 1998 was a violation of the state's family leave act.

Verizon defended on, among other grounds, the proposition that Harris' state law claim was preempted by section 301 of the federal Labor Management Relations Act of 1947 (aka Taft-Hartley, see 29 U.S.C. § 185). After a bench trial the court awarded Harris $1,092 for lost pay and another $1,000 for emotional distress. The court rejected the federal labor law preemption argument, reasoning (to quote from the statement of decision): "On the affirmative defense of preemption due to a possible involvement of federal labor law, the court finds that the references, if any required, to the collective bargaining agreement are so slight that they do not involve the court in interpreting matters more properly left to the federal court system. The court likens it more to consulting a calendar to ascertain dates than to performing some more detailed exercise in contract interpretation, which can at times be exceedingly complex and is a matter best left to the federal court." Further, the trial court entered an injunction requiring Verizon "to allow [employees] to use accrued paid time in place of time off without pay" during any approved leave pursuant to the California Family Rights Act, "if such persons are `otherwise eligible' under the collective bargaining agreement." Verizon then filed this appeal.

II

The terrain covering the issue of federal labor law preemption of state claims when those claims require the interpretation of collective bargaining agreements has been fairly well mapped out. The usual starting place is Allis-Chalmers Corp. v. Lueck (1985) 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206. There a union employee filed a state court lawsuit claiming insurance bad faith where the insurance was provided by a group health and disability plan, which had been incorporated by reference into a collective bargaining agreement. The employee sustained back injuries from carrying a pig to a pig roast. For a while he received disability benefits under the plan, but, supposedly, the employer ordered the plan insurer to periodically cut off his payments on various pretexts. Further, the insurer required periodic reexamination by different doctors, which the employee thought was harassment. (Id. at p. 205, 105 S.Ct. 1904.) His claims were only paid after he instituted the bad faith litigation in state court. While the two lower state courts agreed the case was preempted by federal law, the Wisconsin Supreme Court disagreed, and the United States Supreme Court then took the case, and held that it was preempted.

The federal high court took the state high court to task for its conclusion that the state bad faith tort was independent of "federal contract interpretation." (Allis-Chalmers, supra, 471 U.S. at p. 214, 105 S.Ct. 1904.) The Wisconsin Supreme Court had made "assumptions about the scope of the contract provision which it had no authority to make under state law." (Ibid., emphasis added.) Specifically, it had incorrectly assumed that the collective bargaining agreement contained no implied rights about the manner of the payment of benefits. (Id. at p. 215, 105 S.Ct. 1904.) Not so; the collective bargaining agreement established a joint plant insurance committee which had the authority to resolve disputes about "`any insurance related issues.'" (Ibid.) Since the "extent" of any implied duty of good faith and the contractual promise to pay "ultimately depended] upon the terms of the agreement between the parties," both questions were "tightly bound with questions of contract interpretation that must be left to federal law." (Id. at p. 216, 105 S.Ct. 1904.)

This last comment would later be reiterated as the court's essential holding as a rule of substantial dependence. That is, when state law claims are "substantially dependent" on an analysis of a collective bargaining agreement, there is preemption. (See Allis-Chalmers, supra, 471 U.S. at p. 220, 105 S.Ct. 1904 ["We do hold that 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, that claim must either be treated as a § 301 claim ... or dismissed as pre-empted by federal labor-contract law."]; see also Caterpillar Inc., v. Williams (1987) 482 U.S. 386, 394-395, 107 S.Ct. 2425, 96 L.Ed.2d 318; Wanland v. Los Gatos Lodge, Inc. (1991) 230 Cal.App.3d 1507, 1516, 281 Cal.Rptr. 890.)

A fairly straightforward example of the application of the substantial dependence rule may be found in Moreau v. San Diego Transit Corp. (1989) 210 Cal.App.3d 614, 258 Cal.Rptr. 647. An employer entrapped an employee into selling drugs to an informant. He resigned. After acquittal in the criminal case, the employee sought reinstatement and compensation. When those requests were refused, he brought a wrongful discharge suit.

He was a union employee covered by a "just cause" provision in his contract, so the appellate court held his state claim was preempted. The court specifically noted that whether there was just cause to terminate his employment depended on what "just cause" meant under the collective bargaining agreement, i.e., was firing him after entrapping him just? (Id. at p. 624, 258 Cal.Rptr. 647 ["even on its most general level it is apparent this case cannot be decided without resort to interpretation of the terms of the collective bargaining agreement"].)

But there are some wrinkles in the landscape that qualify the Allis-Chalmers rule, and these must be noted. Lingle v. Norge Division of Magic Chef, Inc. (1988) 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410 demonstrated that merely because the state court must decide the same issue as a labor law arbitrator does not entail preemption. There, a wrongful discharge case centered on a "purely factual inquiry" as to whether an employer had an improper motivation for a discharge based on an allegedly false workers' compensation claim. Thus, a state claim based on the discharge did not "turn on the meaning of any provision of a collective-bargaining agreement," hence no preemption. (Id. at p. 407, 108 S.Ct. 1877.)

Deschene v. Pinole Point Steel Co. (1999) 76 Cal.App.4th 33, 90 Cal.Rptr.2d 15 is our state's version of Lingle. In Deschene, a worker was fired for giving testimony in a deposition in a lawsuit brought by a former employee for asbestos exposure. In a subsequent state claim for statutory wrongful discharge, the court noted that the employer's motivation for the discharge was the key; there would also be an issue as to whether the employee gave reasonable notice of the deposition. (Id. at p. 42, 90 Cal.Rptr.2d 15.) As in Lingle, because the issues were "factual ones which could be resolved without the necessity of construing the provisions of the CBA [collective bargaining agreement]," the claim was not preempted. (Ibid.)

While Lingle and Deschene showed that factual...