INTERN. ASS'N OF MACHINISTS BY McCADDEN v. GE Co.

• Decision Date: 24 May 1989
• Docket Number: No. 88-CV-798.,88-CV-798.
• Citation: 713 F. Supp. 547
• Parties: INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, LOCAL LODGE NO. 967, by its President, William E. McCADDEN, Plaintiff, v. GENERAL ELECTRIC COMPANY and Powerex, Inc., Defendants.
• Court: U.S. District Court — Northern District of New York

713 F. Supp. 547

INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, LOCAL LODGE NO. 967, by its President, William E. McCADDEN, Plaintiff, v. GENERAL ELECTRIC COMPANY and Powerex, Inc., Defendants.

No. 88-CV-798.

United States District Court, N.D. New York.

May 24, 1989.

Knopf & Burka, Washington, D.C., Blitman and King, Syracuse, N.Y., for plaintiff; James R. LaVaute, of counsel.

Bond Schoeneck & King, Syracuse, N.Y., for General Elec.; John Gaal, of counsel.

John A. DeFrancisco, Syracuse, N.Y., for Powerex, Inc.

MEMORANDUM-DECISION AND ORDER

McCURN, Chief Judge.

On June 22, 1988, the International Association of Machinists and Aerospace Workers Local Lodge No. 967 ("Union") initiated this action in New York State Supreme Court, Cayuga County against defendants General Electric Company ("GE") and Powerex, Inc. ("Powerex"). The complaint alleges that defendants engaged in unlawful age discrimination in violation of New York "Human Rights Law." N.Y.Executive Law § 296.1.(a). GE, with the consent of Powerex, removed this action to federal court on July 22, 1988. GE asserts that removal is proper because the claims in the complaint are preempted by federal law and thus "arise under" federal law for purposes of removal. Plaintiff has now moved for a remand to state court; GE has opposed plaintiff's motion while Powerex has not responded. GE further contends that, if successful in resisting this motion to remand, the National Labor Relations Board has primary jurisdiction over the claims raised in the complaint and that the action should be dismissed for want of jurisdiction.¹

I. Background

The plaintiff is Local 967 of the International Association of Machinists and Aerospace Workers. This organization has represented production and maintenance workers employed at a semi-conductor manufacturing facility in Auburn, New York, (the "Auburn facility") since approximately 1953. General Electric Company owned and operated the Auburn Facility until January 1, 1986. During this period the Union and GE were parties to a number of collective bargaining agreements and supplemental agreements including a "Memorandum of Agreement Concerning Pensions and Insurance." The last such agreements were ratified and became effective on July 1, 1985. The Union claims that the collective bargaining agreement ("CBA") it entered into with GE was particularly well suited to the needs of its members, who average over 55 years in age.

This dispute arises out of circumstances surrounding the January 1, 1986, transfer of ownership of the Auburn facility to Powerex, Inc. According to the complaint, Powerex is a joint venture in which GE and Westinghouse Electric Company each own a 45% interest. Mitsubishi Electric Corporation owns a 10% share. As part of the process of forming Powerex, GE contributed the Auburn plant and a facility in Singapore. Westinghouse contributed plants in Youngwood, Pennsylvania; Gurabo, Puerto Rico; and Le Mans, France. All parties to the joint venture are also alleged to have contributed millions of dollars in resources and/or new technologies to Powerex.

When Powerex took control of the Auburn facility it offered employment to all of the persons currently employed at the plant and, apparently, retained most of the supervisory personnel. No members of the Union lost their jobs during or immediately after the transfer in ownership from GE to Powerex. However, Powerex did not adopt the collective bargaining agreement which had been in effect between General Electric and the plaintiff. The Union alleges that the new employer initially negated many of the benefits contained in the CBA and reduced many others. A new agreement has since been entered into between Local 967 and Powerex. It is asserted that the formation of Powerex placed the Union in a much weaker bargaining position relative to their former situation with GE — with a concomitant loss of many age related benefits in the newly negotiated agreement.

The complaint maintains that as a result of the plant transfer and the new agreement with Powerex "employees at the Auburn facility lost, among other things, one week of vacation per year, five personal or sick days, half of their life insurance, substantial medical coverage, and pension and termination pay rights." Complaint, par. 9. Beyond losing these benefits and seniority rights, many of the bargaining unit members are losing their jobs; at least 43 persons, all over the age of 40, have been laid off, allegedly because Powerex has begun transferring work to its other facilities. The plaintiff believes that the purpose "of the joint venture and work transfers is to close the Auburn Plant without having to pay the plant closing costs to the Auburn work force as set forth in the 1985-1988 contract between General Electric and the Union." Complaint, par. 14. The gist of each of plaintiff's claims is that a "determinative factor" in the defendants' business decisions was the age of the Auburn facility's work force and the age related costs associated with their continued employment.

The complaint incorporates the facts and allegations outlined above into six separate causes of action. However, only the first and second of these claims make allegations against GE. In the first cause of action, the Union asserts that GE transferred the Auburn facility to avoid, among other things, paying the bargaining unit members age-related health insurance, life insurance, severance pay, and pension benefits due under the 1985-1988 labor agreement. GE's actions allegedly constituted discriminatory treatment in the terms, conditions, and privileges of employment on the basis of age in violation of § 296.1.(a) of the New York Executive Law.

The second cause of action asserts that GE's sale of the Auburn facility constituted unlawful age discrimination under N.Y. Executive Law § 296.1.(a) due to the disparate impact it had on plaintiff's members "vis-a-vis other General Electric employees engaged in the manufacture of semiconductor products." Complaint, par. 25. The members of the Auburn bargaining unit are alleged to be older on average than the other GE employees who manufacture semiconductor products. In general, the complaint contains no reference to any federal statute or regulation and, on its face, relies solely on the New York Executive Law.

In separate proceedings, the Union filed unfair labor practice charges under § 8(a)(5) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(a)(5), with the National Labor Relations Board against GE and Powerex. The Union claimed, among other things, that the changes in the terms and conditions of employment which were initially made by Powerex in a unilateral fashion were prohibited under the NLRA. The NLRA's Office of General Counsel refused to prosecute the Union's claims and dismissed the charges. The basis of the General Counsel's determination was that Powerex was not an "alter ego" of GE and therefore was a "successor" employer who could not be bound to the terms and conditions of the agreement between GE and the Union. 13 AMR 23094, General Electric Co./Powerex, Inc. (NLRB Advice Memorandum Case No. 3-CA-13046-2, June 23, 1986).

It appears that approximately 87 members of the Union filed charges with the New York State Division of Human Rights alleging unlawful age discrimination by GE in violation of the Human Rights Law of New York. This is the same statute under which the Union has brought the present action. On the basis of an opinion issued by Sam Singer, the Acting General Counsel of the Division of Human Rights, the claim of at least one Union member, Sarah Penna, was dismissed by an Order dated October 6, 1988, on the ground that it was preempted by the provisions of the Employee Retirement Income Security Act ("ERISA"). The State Human Rights Division concluded the resolution of that dispute lies under federal law.

II. Discussion

As the basis for removal, General Electric asserts that the Union's claims are preempted by section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and by section 514 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1144. GE claims that the federal preemption is so complete that the plaintiff's state law claims must be converted into federal causes of action; thereafter, as federal claims they would be subject to removal to federal court under 28 U.S.C. § 1441(a).²

A. The State Age Discrimination Claim

As a preliminary matter it is appropriate to review the elements of an age discrimination claim under New York Executive Law § 296.1.(a). That statute reads in applicable part:

1. It shall be an unlawful discriminatory practice:

(a) For an employer or licensing agency, because of the age, ... of any individual, to refuse to hire or employ or to bar or to discharge from employment such individual or to discriminate against such individual in compensation or terms, conditions or privileges of employment.

GE is an employer as defined in § 292.5 of the Executive Law of New York. The Union, which is an unincorporated association, also appears to be a proper party to an age discrimination claim under the terms of Executive Law § 292.1. That section broadly defines "the term `person' as including one or more individuals, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers." Such persons may normally bring suit under the Human Rights Laws of New York.

In Mayer v. Manton Cork Corp., 126 A.D.2d 526, 510 N.Y.S.2d 649 (A.D.2 Dept. 1987), the court listed the elements of a prima facia case of age discrimination for the discharge of an employee under Executive Law § 296.1.(a).

In order to make out a prima facie case of age discrimination the plaintiff must (1) demonstrate that he was a member of the protected class; (2) prove that he was discharged; (3) prove that he was qualified for the position he held;

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