Humphries v. Pay

• Decision Date: 11 March 2011
• Docket Number: No. 29,197.,29,197.
• Citation: 2011 -NMCA- 035,150 N.M. 444,261 P.3d 592
• Parties: William R. HUMPHRIES, Plaintiff–Appellant,v.PAY AND SAVE, INC., a/k/a Lowe's Grocery # 55 and Tim Cotton, Defendants–Appellees.
• Court: Court of Appeals of New Mexico

150 N.M. 444

261 P.3d 592

2011 -NMCA- 035

William R. HUMPHRIES, Plaintiff–Appellant,

v.PAY AND SAVE, INC., a/k/a Lowe's Grocery # 55 and Tim Cotton, Defendants–Appellees.

No. 29,197.

Court of Appeals of New Mexico.

March 11, 2011.

Steven K. Sanders & Associates, LLC, Steven K. Sanders, Albuquerque, NM, for Appellant.Littler Mendelson, P.C., R. Shawn Oller, Phoenix, AZ, for Appellees.

OPINION

KENNEDY, Judge.

{1} Plaintiff William R. Humphries argues the district court improperly dismissed his claims. He alleged below that his employers Pay and Save, Inc., and Tim Cotton (collectively Defendants) improperly terminated his employment on suspicion that he engaged in union-organizing activities. The district court concluded that federal labor law preempted Plaintiff's claims. We agree and affirm.

BACKGROUND

{2} On May 13, 2008, Plaintiff filed a complaint in the district court seeking relief on six counts: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) negligent or intentional misrepresentation; (4) wrongful termination; (5) tortious interference with contractual relations (against Tim Cotton individually); and (6) declaratory relief. All counts relied on the same core of common facts. Specifically, Plaintiff alleged that until he was terminated on February 23, 2006, he had been employed as a produce manager for five years at Lowe's Grocery # 55 in Alamogordo, New Mexico. Defendant Pay and Save, Inc., owns and operates Lowe's Grocery # 55, and Defendant Tim Cotton was the store manager at the time Plaintiff was terminated. Plaintiff alleged that although he had never been “reprimanded or disciplined ... in any manner,” Defendants fired him because they “believed [he] was involved in organizing the employees of Lowes.” Plaintiff contended that termination in this manner was unjust and that Defendants' actions resulted in numerous injuries for which he sought compensation. Plaintiff's complaint for wrongful termination specifically asserted Defendants' violation of state public policy that encourages the right to form, join, organize, and collectively bargain as a member of a labor organization.

{3} On July 7, 2008, Defendants filed a motion to dismiss the complaint. In pertinent part, they argued that pursuant to Rule 1–012(B)(1) NMRA and Rule 1–012(B)(6) NMRA, the federal labor law vested the National Labor Relations Board (NLRB) with exclusive and primary jurisdiction over Plaintiff's claims. Citing San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), Defendants argued that the facts underlying Plaintiff's claims, if true, constituted an unfair labor practice under the National Labor Relations Act (NLRA), 29 U.S.C. § 157 (1947) and 29 U.S.C. § 158 (1974). As such, the claims were expressly preempted under long-standing Supreme Court precedent. Defendants further argued that if Plaintiff were to claim status as a “supervisor” outside the NLRA, his claims would still be preempted under the Supreme Court's holdings in Beasley v. Food Fair of North Carolina, Inc., 416 U.S. 653, 94 S.Ct. 2023, 40 L.Ed.2d 443 (1974), and Lodge 76, International Association of Machinists & Aerospace Workers, AFL–CIO v. Wisconsin Employment Relations Commission, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976). As an exhibit to their motion, Defendants included a photocopy of a retaliatory discharge claim Plaintiff made to the NLRB before filing the present complaint. Dated August 4, 2006, that claim describes Plaintiff's status as an “employee.” Plaintiff argued in his response to the motion to dismiss that neither Garmon, Beasley, nor Machinists were dispositive. He instead contended that because his claims did not require interpretation of a collective bargaining agreement, preemption did not apply.¹

{4} The district court held a hearing on Defendants' motion via conference call, and at its conclusion, the district court granted Defendants' motion on the basis of federal preemption. It found that each of Plaintiff's claims was based on Defendants alleged belief that Plaintiff “was engaged in union activity” and found that claims involving termination for such activities constituted a “federal issue.”

{5} Plaintiff now appeals the district court's dismissal of his complaint. He contends that because his claims for breach of contract, breach of the covenant of good faith and fair dealing, misrepresentation, wrongful termination, and tortious interference do not originate in a collective bargaining agreement, they do not implicate federal labor law and are therefore not preempted. Plaintiff contends that because these claims are based exclusively on state law, they should be resolved in state court. He also argues that there is no reason why his other allegations cannot remain viable, even assuming his claim for wrongful termination is preempted. As such, Plaintiff contends the district court was incorrect in refusing jurisdiction of all counts in his complaint without considering each individually. We consider these arguments below.

DISCUSSIONA. Standard of Review

{6} Motions to dismiss under Rule 1–012(B)(1) and (B)(6) are reviewed de novo. See Holguin v. Tsay Corp., 2009–NMCA–056, ¶ 9, 146 N.M. 346, 210 P.3d 243 (“We review a district court's ruling on a Rule 1–012(B)(1) lack of subject matter jurisdiction issue de novo.”); Healthsource, Inc. v. X–Ray Assocs. of N.M., P.C., 2005–NMCA–097, ¶ 16, 138 N.M. 70, 116 P.3d 861 (“A district court's decision to dismiss a complaint for failure to state a claim [under Rule 1–012(B)(6) ] is reviewed de novo.”). In such cases, we test “the legal sufficiency of the complaint, not the factual allegations of the pleadings [,] which ... the court must accept as true.” Healthsource, Inc., 2005–NMCA–097, ¶ 16, 138 N.M. 70, 116 P.3d 861. Likewise, this Court has applied a de novo standard to questions of federal preemption. Weise v. Wash. Tru Solutions, L.L.C., 2008–NMCA–121, ¶ 9, 144 N.M. 867, 192 P.3d 1244; Hadrych v. Hadrych, 2007–NMCA–001, ¶ 5, 140 N.M. 829, 149 P.3d 593.

B. Federal Preemption Generally

{7} Federal preemption derives from the Supremacy Clause of Article VI of the United States Constitution. Largo v. Atchison, Topeka, & Santa Fe Ry. Co., 2002–NMCA–021, ¶ 6, 131 N.M. 621, 41 P.3d 347. The doctrine ensures uniformity in federal policies by protecting against the potentially dilutive effects of state legislation and judicial interpretation. Id. New Mexico's courts maintain a strong preference against the doctrine. Id. As a result, we apply it only in situations where Congress has announced a “clear and manifest purpose” for us to do so. Montoya v. Mentor Corp., 1996–NMCA–067, ¶ 8, 122 N.M. 2, 919 P.2d 410 (internal quotation marks and citation omitted). Thus, congressional intent often arises in the heavily regulated landscape of federal labor law. Preemption may apply in a variety of ways and a few have been discussed by New Mexico's appellate courts in recent years. See, e.g., Mitchell–Carr v. McLendon, 1999–NMSC–025, ¶¶ 33–34, 127 N.M. 282, 980 P.2d 65 (analyzing preemption under the NLRA and Garmon ); Weise, 2008–NMCA–121, ¶¶ 7–9, 144 N.M. 867, 192 P.3d 1244 (discussing preemption under both the NLRA and Section 301 of the LMRA); Kerschion v. Pub. Serv. Co. of N.M., 2002–NMCA–045, ¶¶ 6–8, 132 N.M. 119, 45 P.3d 59 (discussing preemption under Section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185(a) (2000)). This case requires us to consider three types of federal labor law preemption.

{8} First, under Section 301 of the LMRA, federal courts maintain exclusive jurisdiction over all disputes requiring interpretation of a collective bargaining agreement. Kerschion, 2002–NMCA–045, ¶ 6, 132 N.M. 119, 45 P.3d 59. Second, state courts may not adjudicate a matter that arguably falls under Sections 7 or 8 of the NLRA. Those sections prohibit several unfair labor practices, and Congress has vested the NLRB with exclusive jurisdiction to decide claims implicating them. Dominguez v. Excell Agent Servs., L.L.C., 137 F.Supp.2d 1264, 1265–66 (D.N.M.2001).

{9} Third, in Machinists, the United States Supreme Court recognized that even though some labor practices fall outside the restrictions of Sections 7 and 8 of the NLRA, such practices were intentionally omitted by Congress for the benefit of parties engaged in labor negotiations. Practices of this type are “weapons” intended by Congress “to be controlled by the free play of economic forces.” Machinists, 427 U.S. at 140, 147, 96 S.Ct. 2548; see Beasley, 416 U.S. at 661–62, 94 S.Ct. 2023 (discussing the claims of supervisors, though specifically excluded from protection under the NLRA, may not be decided by state courts in the interest of uniform national labor policy). As such, the NLRB maintains exclusive jurisdiction over them also. Machinists, 427 U.S. at 140, 147, 96 S.Ct. 2548.

{10} We consider each type of preemption below. While Plaintiff is correct that his claims are not preempted by Section 301 of the LMRA, we hold that his claims still fail under Garmon, Beasley or Machinists, regardless of whether we consider him an employee or a supervisor under the NLRA.

C. Section 301 of the LMRA

{11} Section 301 preemption applies where the scope of the parties' relationship is defined by either a collective bargaining agreement “between an employer and a labor organization” or a contract among labor organizations. Weise, 2008–NMCA–121, ¶ 29, 144 N.M. 867, 192 P.3d 1244; see Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 412, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988) (holding that state law claims for retaliatory discharge are preempted by Section 301 to the extent they require interpretation of a collective bargaining agreement). When a party's claim requires interpretation of such an agreement, the federal courts exercise exclusive jurisdiction. Lingle, 486 U.S. at 401, 413, 108 S.Ct. 1877; see Kerschion, 2002–NMCA–045, ...