Netzel v. United Parcel Service, Inc.

• Decision Date: 25 November 1987
• Docket Number: No. 85-1606,85-1606
• Citation: 165 Ill.App.3d 685,520 N.E.2d 665
• Parties: , 117 Ill.Dec. 314, 56 USLW 2379, 108 Lab.Cas. P 10,419, 2 IER Cases 1301 Thomas NETZEL, Plaintiff-Appellant, v. UNITED PARCEL SERVICE, INC., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 665

520 N.E.2d 665

165 Ill.App.3d 685, 117 Ill.Dec. 314,

56 USLW 2379,

108 Lab.Cas. P 10,419, 2 IER Cases 1301

Thomas NETZEL, Plaintiff-Appellant, v. UNITED PARCEL SERVICE, INC., Defendant-Appellee.

No. 85-1606.

Appellate Court of Illinois,

First District, Third Division.

Nov. 25, 1987.

Rehearing Denied Jan. 25, 1988.

Robert E. Lunz and Marvin A. Brustin, Ltd., Chicago, for plaintiff-appellant.

John A. McDonald and Steven H. Adelman, Chicago, for defendant-appellee.

Justice FREEMAN delivered the opinion of the court:

After trial in the circuit court of Cook County on plaintiff, Thomas Netzel's complaint for retaliatory discharge against his employer, defendant, United Parcel Service, Inc., the jury found in his favor and awarded him $200,000 in compensatory damages. Plaintiff now appeals from the trial court's grant of defendant's motion for a new trial. Plaintiff's sole contention is that the trial court abused its discretion in granting a new trial.

In view of our disposition of this appeal, we need only briefly state the underlying facts. Plaintiff, a package car driver for defendant, injured his knee while on the job on June 7, 1977. Plaintiff filed a workmen's compensation claim on July 12, 1978. Plaintiff's subsequent attempts to return to work, including one on the date of his discharge, August 7, 1979, were unsuccessful because of his injury. Defendant maintained that it discharged plaintiff for disobeying a supervisor's order to remain on his route on August 7, 1979, until the supervisor met him to assist in the completion of the route. Plaintiff maintained the supervisor gave him permission to return to the distribution center with undelivered packages on that date, as had been the case on the prior occasions when he found he could not continue his route because of his injury.

Plaintiff's employment was covered by a collective bargaining agreement between defendant and Teamster Local 705. The agreement prohibited defendant from discharging plaintiff without "just cause." The contract also included grievance arbitration procedures to resolve disputes regarding discharge for "just cause." Plaintiff did not pursue his remedies under the labor contract. Instead, he filed suit against defendant alleging he was discharged in violation of section 4(h) of the Illinois Workmen's Compensation Act for having filed a claim for compensation under the Act. Ill.Rev.Stat. 1977, ch. 48, par. 138.1 et seq., par. 138.4(h).

In its post-trial motion, defendant requested either a directed verdict at the close of plaintiff's case, judgment notwithstanding the verdict, a new trial, or a remittitur. The trial court denied defendant a judgment notwithstanding the verdict. It did not rule on the motion for directed verdict or remittitur. The trial court granted defendant a new trial because in its opinion: (1) there was no evidence to link plaintiff's discharge "with his having filed a Workmen's Compensation Claim more than one year prior to his discharge"; and (2) the damage award could not stand because of plaintiff's testimony that he could not perform the work required of a package car driver for defendant and because he was not "given credit for some of the benefits he received" by the jury. By this last remark, the trial court apparently referred to disability payments plaintiff received as a result of his injury after his discharge by defendant.

We believe that defendant's challenge to the trial court's and this court's subject matter jurisdiction is dispositive. As such, we do not reach the merits of plaintiff's appeal. Defendant argues that the circuit court lacked jurisdiction over the subject matter because Federal law preempts plaintiff's State law claim. Plaintiff responds that defendant waived this issue because it raised it for the first time on appeal. Plaintiff notes that defendant also failed to raise the issue on a cross-appeal and claims it cannot now assert cross-errors. We disagree with plaintiff's contention. The issue of subject matter jurisdiction can be raised at any time. Arrington v. Industrial Comm'n. (1983), 96 Ill.2d 505, 509, 71 Ill.Dec. 712, 451 N.E.2d 866.

Defendant maintains that claims of retaliatory discharge which are based on the filing of workmen's compensation claims are subject to the jurisdiction of the National Labor Relations Board and, therefore, preempted by Federal law. Alternatively, defendant contends that plaintiff's claim is preempted by section 301 of the Federal Labor Management Relations Act (LMRA). This section provides that suits for violations of contracts between an employer and a labor organization representing employees in an industry affecting commerce may be brought in any Federal district court having jurisdiction of the parties. (29 U.S.C. sec. 185(a) (1976).) It has been construed to allow an employee to bring a breach of contract action alleging a violation of a collective bargaining agreement after the employee has attempted to exhaust any exclusive grievance and arbitration procedures provided in the agreement. (Vaca v. Sipes (1967), 386 U.S. 171, 184, 87 S.Ct. 903, 914, 17 L.Ed.2d 842, 854.) Defendant argues that, even though plaintiff's claim does not appear by its language to fall within section 301, it nevertheless must be treated as such a claim and plaintiff must prove exhaustion of his contract remedies. In support of its position, defendant cites Allis-Chalmers Corp. v. Lueck (1985), 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206.

In Allis-Chalmers, the issue was whether section 301 of the LMRA preempted a state tort action for bad faith delay in disability benefit payments due under a collective bargaining agreement. The Supreme Court reasoned that, to determine whether state tort claims such as that at issue were preempted by section 301, it had to be determined whether such claims conferred nonnegotiable state law rights independent of any contract rights or whether evaluation of the tort claim was "inextricably intertwined" with consideration of the terms of the labor contract. (471 U.S. 202 213, 105 S.Ct. 1904, 1912, 85 L.Ed.2d 205, 216.) The court found that the state tort claim at issue was preempted by section 301 because "[t]he duties imposed and rights established" by it derived "from the rights and obligations established by the contract." (471 U.S. 202, 217, 105 S.Ct. 1904, 1914, 85 L.Ed.2d 206, 219.) The Court established a general rule applicable to such cases: "[W]hen resolution of a state-law claim is substantially dependent upon an analysis of" the terms of a collective bargaining agreement, the claim must either be treated as a section 301 claim or dismissed as preempted by Federal law. As such, the court concluded, the plaintiff's complaint should have been dismissed by the state court because he failed to avail himself of the grievance procedure established in the collective bargaining agreement. 471 U.S. 202, 220-21, 105 S.Ct. 1904, 1916, 85 L.Ed.2d 205, 221.

Defendant additionally cites several lower court cases decided since Allis-Chalmers which hold that an employee covered by a collective bargaining agreement prohibiting discharge without "just cause" cannot bring an action for retaliatory discharge in violation of state workers' compensation statutes. See, e.g., Lingle v. Norge Division of Magic Chef, Inc. (S.D.Ill.1985), 618 F.Supp. 1448, aff'd (7th Cir.1987), 823 F.2d 1031, cert. granted, 484 U.S. 895, 108 S.Ct. 226, 98 L.Ed.2d 185; Johnson v. Hussmann Corp. (E.D.Mo.1985), 610 F.Supp. 757, aff'd (8th Cir.1986), 805 F.2d 795.

Illinois case law provides that a tort action for exercising rights under the Workers' Compensation Act (Ill.Rev.Stat.1979, ch. 48, par. 138.1 et seq.) is a remedy available to unionized employees covered by a collective bargaining agreement. (Midgett v. Sackett-Chicago, Inc. (1984), 105 Ill.2d 143, 85 Ill.Dec. 475, 473 N.E.2d 1280, cert. denied (1985), 472 U.S. 1032, 105 S.Ct. 3513, 87 L.Ed.2d 642 and 474 U.S. 909, 106 S.Ct. 278, 88 L.Ed.2d 243). Our supreme court recently addressed the question whether, in light of Allis-Chalmers, section 301 of the LMRA preempted the independent State tort of retaliatory discharge as recognized in Midgett, and whether a plaintiff's failure to exhaust grievance procedures provided in a collective bargaining agreement would bar the action.

In Gonzalez v. Prestress Engineering Corp. (1986), 115 Ill.2d 1, 104 Ill.Dec. 751, 503 N.E.2d 308, cert. denied (1987), 483 U.S. 1032, 107 S.Ct. 3248, 97 L.Ed.2d 779, the court held that claims of retaliatory discharge fall outside the preemptive sphere of section 301. The court explained that, because the tort alleged in Allis-Chalmers was a derivative product of the labor contract without which it would not have existed, resolution of the claim was substantially dependent upon interpretation of the terms of the agreement. The tort of retaliatory discharge, in contrast, is rooted in clearly mandated public policy of the State which, regardless of the existence or the absence of a collective bargaining agreement, gives employees and employers certain nonnegotiable rights and imposes nonnegotiable duties and obligations. (115 Ill.2d 1, 9, 104 Ill.Dec. 751, 503 N.E.2d 308.) The defendant argued that the State tort should have been preempted because an interpretation of the "just cause" provision of the collective bargaining agreement was necessary for adjudication; however, the court found that the determination of whether an employee had been discharged in violation of public policy did not turn upon whether the discharge was "just" under a labor agreement. Otherwise, the court declared, State public policy could become a bargaining chip to be altered or waived by the private parties to the agreement. (115 Ill.2d 1, 10, 104 Ill.Dec. 751, 503 N.E.2d 308.) The court emphasized that, even had the labor contract incorporated the rights and obligations of the Workers' Compensation Act and provided a discharge...