Peabody Galion v. Dollar

• Decision Date: 11 December 1981
• Docket Number: No. 81-1391,81-1391
• Citation: 666 F.2d 1309
• Parties: 109 L.R.R.M. (BNA) 2068, 92 Lab.Cas. P 13,152 PEABODY GALION, a division of Peabody International Corporation, Appellant, v. A. V. DOLLAR, et al., Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1309

666 F.2d 1309

109 L.R.R.M. (BNA) 2068, 92 Lab.Cas. P 13,152

PEABODY GALION, a division of Peabody International

Corporation, Appellant, v. A. V. DOLLAR, et al., Appellees.

No. 81-1391.

United States Court of Appeals, Tenth Circuit.

Dec. 11, 1981.

Kent F. Frates, Ellis & Frates, Oklahoma City, Okl., for appellant.

Ben A. Goff, Oklahoma City, Okl., for appellees.

Before HOLLOWAY, DOYLE and SEYMOUR, Circuit Judges.

WILLIAM E. DOYLE, Circuit Judge.

Peabody Galion, a division of Peabody International Corporation, here appeals a judgment entered by the United States District Court for the Eastern District of Oklahoma, which denied its motion for summary judgment. ¹ The appeal challenges this order of the trial court. Thus, appellant maintains that as a matter of law it is entitled to prevail in the case.

The facts briefly stated are these:

Peabody Corp. operates a garbage truck body manufacturing plant in Durant, Oklahoma. This plant employs one to three hundred workers, depending on economic conditions. Plant workers are represented by a union, Local 2494 of the International Association of Machinists and Aerospace Workers AFL-CIO.

In August of 1978 the Company and the Union entered into a collective bargaining agreement. This provided for employee rights and responsibilities and for certain contingencies such as disabling injuries to employees. ^1a Also established was a grievance procedure and mandatory binding arbitration for disputes arising under the agreement's terms.

The dispute grew out of the fact that Peabody used the provisions set forth in footnote 1 to place some thirty-four of its employees on workman's compensation leave. This occurred in February and March, 1980. All thirty-four of the employees that were laid off had indeed filed claims and had been found partially disabled by the Oklahoma Workers' Compensation Court. The workmen's compensation leaves amount to discharges, because the employees' nominal right to continue working in suitable low-risk jobs was vitiated by Peabody's determination that there were no vacant low-risk positions. If the Peabody company is correct in its contentions here, the employee who seeks workmen's compensation insurance is trapped because he is invariably subject to dismissal. The workers placed on leave claimed that they were wrongfully discharged, and filed grievances seeking arbitration under the collective bargaining agreement. The cases of two of the workers were actually arbitrated; the decisions were in favor of Peabody. Thereafter, three of the workers filed a diversity action in the United States District Court for the Eastern District of Oklahoma, alleging wrongful discharge in violation of Oklahoma law. The plaintiffs-later joined by the other workers as intervenors-sought injunctive relief and compensatory and punitive damages. They cited Okla.Stat. Tit. 85, §§ 5-7 (Supp.1980), which authorizes the maintenance of an action for damages against any employer who discharges an employee because a workers' compensation claim was filed. ²

In response Peabody filed a motion for summary judgment, urging that the plaintiffs and intervenors had already elected to pursue the exclusive remedy of arbitration and therefore could not file suit in court. The trial court's denial of that motion provoked the instant appeal.

The issue before us must be determined by Oklahoma law under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) since it is a substantive matter. The Oklahoma legislature adopted the statutory cause of action relied upon by appellees. In so doing it evidenced some intention to find that persons who are discharged following the filing of workmen's compensation claims are entitled to some remedy. In addition the Supreme Court of Oklahoma has upheld the statute against a challenge to the jurisdiction of state courts to hear cases brought under it. WRG Construction Co. v. Hoebel, 600 P.2d 334 (Okl.1979).

Issues of federal preemption and exclusivity of remedies complicate the instant inquiry, however. The contention of Peabody is that the collective bargaining agreement is based upon the National Labor Relations Act and that the issue is whether or not the presence of this remedy is exclusive and prevents appellees from bringing an action under the Oklahoma statute. Because the Oklahoma courts have not addressed that issue, this court is called upon to decide the case as it believes the Oklahoma courts would.

Peabody maintains that this is a grievance which arose under the terms of the collective bargaining agreement and thus, that the plaintiffs, whether they filed claims under it or not, were bound by contract to pursue the exclusive remedy of arbitration. In addition, Peabody argues, even if appellees were not at first limited to the exclusive remedy of arbitration, their subsequent actions in filing grievances (and in some cases pursuing arbitration) amounted to a waiver of rights to pursue any other remedies that might originally have been available. Peabody further contends that even if arbitration were not necessarily the exclusive remedy under state law, the Oklahoma statute providing the appellees' cause of action here is preempted by federal labor policies.

The questions then are, first, was the Oklahoma Statute, Title 85, §§ 5-7 (Supp.1980), under which this action which sounds in tort was filed, preempted by federal labor law? Second, does the federal policy which favors binding arbitration bar the application of the state statute here? And third, does the pursuit of this action under the state statute by the appellees violate state law pertaining to exclusivity of remedies? Our conclusion based on the reasons set forth below is that the trial court was correct in rejecting Peabody's challenge to its jurisdiction to hear the case.

I. THE PREEMPTION QUESTION.

The preemption question addresses the extent to which Congress has placed implicit limits on the scope of state regulation of activity touching upon labor-management relations. Sears, Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S. 180, 187, 98 S.Ct. 1745, 1752, 56 L.Ed.2d 209 (1978). Therefore, our concern is whether the remedy under the state law collides with the National Labor Relations Act whereby it is necessary to prohibit the action based on the state statute. It boils down to this: does the state statute interfere with the workings of the National Labor Relations Act? Vaca v. Sipes, 386 U.S. 171, 178-179, 87 S.Ct. 903, 910, 17 L.Ed.2d 842 (1967), quoted in Farmer v. United Brotherhood of Carpenters and Joiners of America, 430 U.S. 290, 295, 97 S.Ct. 1056, 1060, 51 L.Ed.2d 338 (1977).

A. Is this a case which lends itself to the doctrine of preemption?

At the outset we note that Oklahoma Statute Title 85 §§ 5-7 (Supp.1980) is in its nature remote from the National Labor Relations Act and the collective bargaining agreement that was agreed upon between Peabody and the Union. The remedy which is being pursued by the plaintiffs in no way conflicts with the collective bargaining agreement or with the National Labor Relations Act. Thus, it cannot be said that this two sided action is preempted. The statute impedes neither collective bargaining nor any of the policies and purposes of the federal statute.

It is quite true that the powers of the National Labor Relations Board are very broad, and the Board functions under a liberal construction of interstate commerce. Its main purpose is to promote the organization of unions and to provide the unions with an atmosphere of freedom to organize and to bargain collectively. The kind of state law or policy that conflicts with the NLRB's jurisdiction is one which deals with a similar subject and which limits, restricts or interferes with the functioning of the National Labor Relations Act.

The Supreme Court's decision in Sears, Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S. 180, 187, 98 S.Ct. 1745, 1752, 56 L.Ed.2d 209 (1978) raised the question whether the granting of an injunction against picketing under state law was in conflict with the National Labor Relations Act. Indeed the question posed in the Supreme Court opinion per Mr. Justice Stevens was whether the National Labor Relations Act, as amended, deprived the state court of the power to entertain an action by an employer to enforce state trespass laws against picketing, which is arguably-but not definitely-prohibited or protected by federal law. The Supreme Court concluded that the National Labor Relations Act did not preempt trespass law enforcement jurisdiction. The Supreme Court said in passing:

The Court has held that state jurisdiction to enforce its laws prohibiting violence, defamation, the intentional infliction of emotional distress, or obstruction of access to property is not preempted by the NLRA. But none of those violations of state law involves protected conduct. In contrast some violations of state trespass law may be actually protected by § 7 of the federal law.

436 U.S. at 204, 98 S.Ct. at 1761.

The Court cited NLRB v. Babcock & Wilcox, 351 U.S. 105, 76 S.Ct. 679, 100 L.Ed. 975, which recognized that in certain circumstances union organizers have the limited right of access to the employers' premises for the purpose of engaging in solicitation. The Court further observed, however, that "the locus of the accommodation of § 7 rights and private property rights * * * may fall at differing points along the spectrum depending on the nature and strength of the respective § 7 rights and private property rights asserted in any given context." 436 U.S. at 204, 98 S.Ct. at 1761, quoting Hudgens v. NLRB, 424 U.S. 507, 522, 96 S.Ct. 1029, 1037, 47 L.Ed.2d 196. In Sears, the Union had not presented the matter to the Labor Board and had not invoked its jurisdiction. The Court ultimately found that Congress had not intended to protect the character of the union's conduct,...