Overby v. Chevron USA, Inc.

Decision Date01 September 1989
Docket NumberNo. 88-5801,88-5801
Citation884 F.2d 470
Parties132 L.R.R.M. (BNA) 2334, 50 Fair Empl.Prac.Cas. 1211, 51 Empl. Prac. Dec. P 39,316, 58 USLW 2211, 113 Lab.Cas. P 56,140, 4 Indiv.Empl.Rts.Cas. 1266 Garnett OVERBY, Plaintiff-Appellant, v. CHEVRON USA, INC., Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Edward M. Fox, Klass, Helman & Ross, Los Angeles, Cal., for plaintiff-appellant.

James S. Bryan, Lawler, Felix & Hall, Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before WALLACE, FARRIS and BEEZER, Circuit Judges.

WALLACE, Circuit Judge:

Overby sued Chevron U.S.A., Inc. (Chevron) in state court, alleging wrongful discharge under California law. Chevron removed the action on the basis of federal question jurisdiction, relying on section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185(a). See 28 U.S.C. Sec. 1441(b). After Overby amended his complaint to include a racial discrimination claim under 42 U.S.C. Sec. 1981 and additional state law claims, the district court granted summary judgment in favor of Chevron. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. Sec. 1291. We affirm in part and reverse and remand in part.

I

Overby, a black male, was employed by Chevron from February 21, 1978, until March 12, 1986, when he was terminated for refusing to permit Chevron security personnel to search his person and wallet. Throughout his employment, Overby was represented in collective bargaining by the Oil, Chemical, and Atomic Workers International Union, AFL-CIO, and its Local 1-547 (collectively union), which entered into successive collective bargaining agreements (CBAs) with Chevron. On February 23, 1986, 17 days before his termination, the CBA under which Overby was most recently employed expired. On the eve of its expiration, Chevron advised the union that during negotiations Chevron would continue to respect the terms of the old CBA, with two exceptions: first, Chevron would not deduct union dues from employees' paychecks; and second, employee-management disputes covered by the old CBA would be processed through a grievance procedure, but would not be submitted to arbitration. This action by Chevron was unilateral; it was not the product of collective bargaining. A new CBA was ratified by Chevron employees on May 2, 1986.

In his state court complaint, Overby alleged that Chevron, 200 fictitious Does and "Standard Oil of California," a non-existent entity, had wrongfully discharged him. The legal basis of his claim is opaque. The complaint states that Overby "entered into a written agreement" under which Chevron was "required ... to treat [Overby] in accordance with the prevailing union contract and in conformity with existing employment laws, codes and regulations." The complaint also states that Overby "duly performed all of the conditions of the agreement to be performed on his part for the next eight (8) years." After alleging that Overby was discharged for refusing to consent to a search, the complaint asserts that the "search was retaliatory in nature, in that [Overby], in the past, had questioned corporate practices of Defendants as they regard [sic] dealings with employees and Defendants' authority to invade the privacy of employees as well as possible racial discrimination in Defendants' job promotion practices." Finally, the complaint states that "the search ... was selective and not based on probable cause that a violation of company safety rules had been committed. Several employees in the same area were not searched. [Overby], who is black, was selected for the purportedly 'random' search." The complaint on its face does not allege a federal claim.

Chevron removed the action on the ground that any state law claims against it were preempted by section 301 of the LMRA. The district court permitted Overby to amend his complaint. After repeating verbatim the allegations of wrongful discharge, the amended complaint included a federal racial discrimination claim under section 1981 and additional state law claims for breach of an implied covenant of good faith and fair dealing, breach of an implied-in-fact covenant not to be discharged without good cause, and intentional infliction of emotional distress. As the basis for his section 1981 claim, Overby alleged that he was discharged in retaliation for filing in April 1983 a racial discrimination claim with the Equal Employment Opportunity Commission (EEOC), which he voluntarily withdrew in September 1983. The district court granted summary judgment in favor of Chevron, holding that (1) Overby's state law claims were preempted by section 301, (2) any claims Overby could assert under section 301 were barred by the statute of limitations, and (3) Overby failed to establish a prima facie case on his section 1981 claim.

We need not address whether Chevron's removal of the action was proper. Overby did not object to removal and, at the time the district court entered judgment on the merits, Overby had amended his complaint to state a federal claim under section 1981. The district court therefore had subject matter jurisdiction. See Grubbs v. General Electric Credit Corp., 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612 (1972); Sorosky v. Burroughs Corp., 826 F.2d 794, 798 (9th Cir.1987).

We review a summary judgment independently. Collins v. Womancare, A Feminist Woman's Health Center, 878 F.2d 1145, 1147 (9th Cir.1989). "We apply the same standard used by the trial court under Fed.R.Civ.P. 56(c)." Id. "Viewing the evidence in the light most favorable to the nonmoving party, we must determine whether there are any genuine issues of material fact and whether the district court correctly applied the substantive law." Judie v. Hamilton, 872 F.2d 919, 920 (9th Cir.1989).

II

We first address Overby's racial discrimination claim under section 1981. We must decide whether the conduct about which Overby complains is protected by section 1981.

Section 1981 protects the rights of all persons, regardless of race, "to make and enforce contracts." 42 U.S.C. Sec. 1981. The Supreme Court in Patterson v. McLean Credit Union, --- U.S. ----, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989) (Patterson ), recently clarified the scope of section 1981. The Court confirmed that section 1981 is not "a general proscription of racial discrimination in all aspects of contract relations." Id. 109 S.Ct. at 2372. Rather it protects just two rights: (1) the right to make contracts and (2) the right to enforce contracts. Id. The right to make contracts "extends only to the formation of a contract, but not to problems that may arise later from the conditions of continuing employment." Id. (emphasis added). Postformation conduct, such as breach of contract, or imposition of discriminatory conditions, does not implicate the right to make a contract and is thus not protected by the statute. Id. at 2372-73.

The Court further explained in Patterson that the right to enforce contracts "embraces protection of a legal process, and of a right of access to legal process, that will address and resolve contract-law claims without regard to race." Id. at 2373. Section 1981 protects against "efforts to impede access to the courts or obstruct nonjudicial methods of adjudicating disputes about the force of binding obligations." Id. For example, in Goodman v. Lukens Steel Co., 482 U.S. 656, 664-69, 107 S.Ct. 2617, 2622-25, 96 L.Ed.2d 572 (1987) (Goodman ), the Court held that labor unions had violated black employees' right to enforce contracts by systematically refusing to file racial discrimination grievances on the employees' behalf against the employer. There, the collective bargaining agreement included an express provision binding both the employer and the unions not to discriminate on the basis of race. Id. 482 U.S. at 666, 107 S.Ct. at 2624. Animating the Court's analysis was the recognition that the unions bear the responsibility to enforce employees' rights under employment contracts and to process grievances against employers. See Patterson, 109 S.Ct. at 2373. The Court in Goodman found that "[t]he Unions, in effect, categorized racial grievances as unworthy of pursuit and, while pursuing thousands of other legitimate grievances, ignored racial discrimination claims on behalf of blacks, knowing that the employer was discriminating in violation of the contract. Such conduct ... violated ... Sec. 1981." Goodman, 482 U.S. at 669, 107 S.Ct. at 2625.

Overby does not claim that Chevron prevented him from entering into a contract. To the contrary, Overby and Chevron formed a contract on February 21, 1978. Rather, he complains of postformation conduct: retaliatory discharge. Overby's right under section 1981 "to make" a contract is therefore not implicated. Patterson, 109 S.Ct. at 2372-73. Nor does Overby allege that Chevron obstructed his access to courts or any other dispute resolution process, such as that provided by the EEOC. Overby does not contend that Chevron prevented him from filing the EEOC claim in April 1983. The record reveals that Overby indeed filed the claim. He concedes that he withdrew the claim voluntarily, not under threat of adverse consequences. Moreover, Overby does not charge that Chevron impeded his efforts to file any subsequent claims with the EEOC. Overby does not suggest that he even attempted to file subsequent claims. As opposed to the employees in Goodman whose grievances lay dormant despite their desire for redress, Overby was free to and did pursue his claims of racial discrimination with the diligence he deemed appropriate.

We refuse to interpret Chevron's alleged conduct as an effort to "impede" or "obstruct" Overby's right to enforce his contract in violation of section 1981. Id. at 2373. Retaliatory...

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