Muenchow v. Parker Pen Co.

• Decision Date: 19 August 1985
• Docket Number: No. 84-C-966-C.,84-C-966-C.
• Citation: 615 F. Supp. 1405
• Parties: Virginia MUENCHOW, James A. Olson, and all other plaintiffs whose names, addresses and phone numbers are found on Attachment No. 1, attached hereto and expressly incorporated by reference herein, Plaintiffs, v. The PARKER PEN COMPANY, Defendant.
• Court: U.S. District Court — Western District of Wisconsin

615 F. Supp. 1405

Virginia MUENCHOW, James A. Olson, and all other plaintiffs whose names, addresses and phone numbers are found on Attachment No. 1, attached hereto and expressly incorporated by reference herein, Plaintiffs, v. The PARKER PEN COMPANY, Defendant.

No. 84-C-966-C.

United States District Court, W.D. Wisconsin.

August 19, 1985.

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Richard V. Graylow, Lawton & Cates, Madison, Wis., for plaintiffs.

Edward W. Bergmann, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendant.

ORDER

CRABB, Chief Judge.

On or about November 20, 1984, plaintiffs commenced a civil action for equitable relief against defendant Parker Pen Company in the Circuit Court for Rock County alleging that defendant had made misrepresentations of fact intended to induce them to terminate their seniority rights and accept severance pay benefits. On December 7, 1984, defendant Parker Pen Company filed a petition for removal of the action to this court pursuant to 28 U.S.C. § 1441(b), claiming that this court has original jurisdiction over the action pursuant to 29 U.S.C. §§ 185(a) and 1132(e)(1), because plaintiffs' claims are preempted under principles of federal labor law and by the provisions of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq.

The case is before the court on plaintiffs' motion for remand to the state court. From defendant's verified petition for removal, the affidavits and exhibits submitted by the parties, and the record transmitted from the state court, I find the following facts.

FACTS

Prior to April 29, 1983, all of the plaintiffs in this action were employed by defendant Parker Pen Company at its Arrow Park plant, which is located in Janesville, Wisconsin. Defendant Parker Pen Company is an employer in an industry affecting commerce within the meaning of 29 U.S.C. §§ 185(a) and 1002(5).

Plaintiffs are former members of Local No. 663 of the United Rubber Workers, which represents employees of defendant and is a labor organization in commerce within the meaning of 29 U.S.C. § 185(a). At all times material to this action, plaintiffs were covered by a collective bargaining agreement between the United Rubber Workers and defendant.

In response to losses in several key world markets, defendant sought to modernize its Arrow Park plant. Defendant anticipated that modernization of the plant would require a reduction in the work force, and began discussing this concern with union representatives in March, 1983. As a result of these discussions, defendant and union representatives reached agreement on several measures, including a severance pay plan, designed to reduce the production work force and increase management flexibility. On March 27, 1983, the union membership ratified the measures.

Under the severance pay plan, employees of defendant who terminated their employment would receive (1) two weeks' wages per year of service up to 26 weeks, with a minimum severance pay of thirteen weeks; (2) medical insurance coverage up to a maximum of one year from the date of termination; (3) immediate payment of vacation pay earned in 1982 and 1983; (4) immediate vesting in the Parker Retirement Plan; and (5) extension of unemployment eligibility. In effect, employees of defendant were given the option of accepting benefits under the severance pay plan and terminating seniority, or of taking layoff and retaining recall rights under the basic collective bargaining agreement.

The company conducted informational meetings on April 26 and 27, 1983, to answer employee questions concerning implementation of the severance pay plan. Subsequently, plaintiffs applied for benefits under the severance pay plan by signing and submitting an "APPLICATION FOR SEVERANCE," with the understanding that they had terminated their employment by submitting the application.

On or about November 20, 1984, plaintiffs commenced this action in the Circuit Court for Rock County. The complaint alleges that defendant made statements at informational meetings beginning in late March and continuing through April, 1983, to the effect that a maximum of 200 jobs would exist after modernization of the Arrow Park plant; that these statements constituted misrepresentations or material mistakes of fact; that plaintiffs relied on these statements in deciding whether to accept benefits under the severance pay plan and terminate their seniority; and that plaintiffs would not have accepted severance benefits or terminated their seniority but for the misrepresentations or material mistakes of fact. The relief requested in the complaint is rescission of the severance pay plan and reinstatement of plaintiffs to their previous positions at defendant's Janesville plant, together with back pay and full rights and benefits under the collective bargaining agreement.

Previously, plaintiff Muenchow had filed an unfair labor practice charge against defendant with the National Labor Relations Board alleging that defendant violated 29 U.S.C. § 158(a)(1) and (3) by representing at informational meetings that a maximum of 200 jobs would exist after modernization of the Arrow Park plant was completed, and thereafter exceeding that level of employment. In a letter dated March 31, 1984, the regional director informed plaintiff Muenchow that he was refusing to issue a complaint, finding that the charge was untimely and concluding that, in any event, "defendant's incorrect forecast of employment levels after plant renovation, in the absence of any independent violations of the Act, does not itself demonstrate discrimination against employees because of their union activities."

In early June, 1984, plaintiff Muenchow and four others filed a grievance under the provisions of the collective bargaining agreement between defendant and the United Rubber Workers. The grievance alleged that, during informational meetings concerning the severance pay plan, defendant misrepresented that a maximum of 200 jobs would exist after modernization of the plant was completed. Claiming that this alleged misrepresentation caused them to terminate their seniority, plaintiff Muenchow and the others who filed the grievance sought "reinstatement of severed employees with full benefits." Later, the union membership voted at a meeting against taking the grievance to arbitration. Defendant has not received a demand for arbitration.

OPINION

Federal question removal is governed by 28 U.S.C. § 1441(b), which provides that:

Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties.

Generally, an action is removable under § 1441(b) only where it appears from the face of the complaint, unaided by the answer or petition for removal, that a right arising under federal law is an essential element of the plaintiff's claim and is the subject of a genuine and present controversy. Gully v. First National Bank, 299 U.S. 109, 112-13, 57 S.Ct. 96, 97-98, 81 L.Ed. 70 (1936); Oglesby v. RCA Corp., 752 F.2d 272, 275 (7th Cir.1985).

This so-called "well-pleaded complaint rule" has an exception. A plaintiff cannot defeat the defendant's right of removal by using "artful pleading" to disguise an essentially federal claim in terms of state law. Oglesby v. RCA Corp., 752 F.2d at 275. See generally 14A C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3722 at 266-76 (1985). Where the essential nature of plaintiff's claim is federal, because of preemption or otherwise, the case may be removed regardless of the manner in which the claim was characterized in the complaint. 14A C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3722 at 273-75 (1985). In these situations, a court may examine the record to determine the true nature of plaintiff's claim. Oglesby v. RCA Corp., 752 F.2d at 277-78.

Once federal question removal jurisdiction is challenged, the party seeking removal has the burden of establishing that removal was proper. Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir.1976). The complaint in this case does not allege any violation of federal law. Nevertheless, defendant contends that plaintiffs' claims of misrepresentation and mutual mistake of fact must be recharacterized as arising under federal law because they are preempted both by the primary jurisdiction of the NLRB over unfair labor practice disputes and by 29 U.S.C. § 185(a). Defendant argues therefore that federal question removal is proper under principles of federal labor law. In addition, defendant contends that federal question removal is proper under 29 U.S.C. § 1132(e)(1) because plaintiffs' state law claims are preempted by ERISA, 29 U.S.C. § 1144(a).

Federal Labor Law Preemption and Removal Based On § 185(a)

Defendant contends that plaintiffs' claims must be preempted to protect the primary jurisdiction of the NLRB over unfair labor practice disputes. The primary jurisdiction doctrine has its origins in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). In Garmon, the United States Supreme Court held that the jurisdiction of state courts or agencies must yield to the exclusive primary competence of the NLRB if the activities sought to be regulated are either arguably protected as "concerted activities" under 29 U.S.C. § 157 or arguably prohibited as unfair labor practices under 29 U.S.C. § 158. Id. at 244-45, 79 S.Ct. at 779. The rule is designed to avoid the potential for jurisdictional conflict between state courts or agencies and the NLRB by ensuring that primary responsibility for interpreting and applying §§ 157 and 158 remains with the NLRB. Brown v. Hotel & Restaurant Employees & Bartenders, ___ U.S. ___, 104 S.Ct. 3179, 3186-87, 82...