Simms v. Local 1752, Int'l Longshoremen Ass'n

• Decision Date: 29 September 2016
• Docket Number: No. 16-60073,16-60073
• Citation: 838 F.3d 613
• Parties: Patrick Simms, Plaintiff–Appellant, v. Local 1752, International Longshoremen Association, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

838 F.3d 613

Patrick Simms, Plaintiff–Appellant,

v.Local 1752, International Longshoremen Association, Defendant–Appellee.

No. 16-60073

United States Court of Appeals, Fifth Circuit.

FILED September 29, 2016

William L. Messenger, Brandon Rowland, National Right to Work Legal Defense Foundation, Springfield, VA, for Plaintiff–Appellant.

J. Cecil Gardner, Thomas Matthew Loper, Esq., Gardner Firm, P.C., Mobile, AL, James B. Coppess, AFL–CIO, Samuel Huntington Heldman, Gardner Firm, Washington, DC, for Defendant–Appellee.

Before KING, SMITH, and COSTA, Circuit Judges.

KING, Circuit Judge:

Patrick Simms, who is not a union member, was denied referral for employment because he refused to pay a fee to use the union's hiring hall. The district court dismissed his suit asserting that the fee was unlawful. We find no error and AFFIRM.

I. FACTUAL AND PROCEDURAL BACKGROUND

As alleged in the complaint, CSA Equipment Company, LLC (“CSA”) and Defendant–Appellee International Longshoremen Association Local 1752 (“Local 1752”) are parties to a collective bargaining agreement, and as part of this agreement, CSA must hire all of its clerks and other employees through the hiring hall operated by Local 1752. “[A]s a condition of obtaining employment through [Local 1752's] hiring hall,” an individual must either be a union member or pay a “service fee.” CSA assists in the collection of this fee by deducting the amount due from the employee's paycheck if the employee signs a checkoff authorization card.

Plaintiff–Appellant Patrick Simms works for CSA primarily as a clerk in charge and, therefore, is required to use Local 1752's hiring hall. Simms is not a member of Local 1752 and did not make the required payments to Local 1752 for use of its hiring hall. Local 1752 sent Simms a letter stating, in part, that “to be in good standing [Simms] must either pay Hiring Hall fees or be a dues paying member of one of the Locals,” and since Simms was not a union member, he “must make some arrangement with the Hiring Hall and the Locals to pay the Hiring Hall fees related to being referred for work.” If Simms failed to pay the fees, the letter stated that he would “no longer be able to be referred for hire through the Hiring Hall.”

Simms did not make the required payments, and on May 1, 2015, according to Simms's complaint, “Local 1752 caused CSA to not employ Simms.” In other words, Simms would no longer be referred for employment with CSA through the hiring hall. Ten days later, however, Simms “sign[ed] under protest” an agreement with Local 1752 to pay in installments the delinquent fees, allowing him to be referred through the hiring hall once again.

On October 8, 2015, Simms filed suit against Local 1752 asserting that it breached its duty of fair representation; its assessment of mandatory fees to Simms, a non-union member, for using the hiring hall was prohibited by Mississippi's right to work law; and the payment agreement was void as against public policy for those reasons. On January 8, 2016, the district court granted Local 1752's motion to dismiss. The court held that Simms's allegations were insufficient to state a claim for breach of the duty of fair representation, and that Mississippi's right to work law was preempted by federal law “with respect to the issue of requiring non-members to pay hiring hall fees.” The court further held that Simms's claim that the payment agreement he had reached with the union was void as against public policy was not cognizable because the relevant Mississippi law was preempted by federal law. Simms timely appealed.

II. STANDARD OF REVIEW

This court reviews “a district court's order on a motion to dismiss for failure to state a claim under Rule 12(b)(6) de novo” and “accept [s] ‘all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.’ ” New Orleans City v. Ambac Assurance Corp. , 815 F.3d 196, 199–200 (5th Cir. 2016) (quoting In re Katrina Canal Breaches Litig. , 495 F.3d 191, 205 (5th Cir. 2007) ). “Dismissal is appropriate when the plaintiff has not alleged ‘enough facts to state a claim to relief that is plausible on its face’ and has failed to ‘raise a right to relief above the speculative level.’ ” True v. Robles , 571 F.3d 412, 417 (5th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

III. MISSISSIPPI'S RIGHT TO WORK LAW

We first turn to Simms's primary argument that section 14(b) of the National Labor Relations Act (“NLRA”), 29 U.S.C. § 164(b), allows enforcement of Mississippi's right to work law, Miss. Code Ann. § 71–1–47,¹ thereby precluding the assessment of hiring hall fees to Simms.

“[I]n passing the NLRA Congress largely displaced state regulation of industrial relations,” and thus, states “may not regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits.” Wis. Dep't of Indus., Labor & Human Relations v. Gould Inc. , 475 U.S. 282, 286, 106 S.Ct. 1057, 89 L.Ed.2d 223 (1986) (citing San Diego Bldg. Trades Council, Millmen's Union, Local 2020 v. Garmon , 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959) ). Section 14(b), however, provides a limited exception:

Nothing in this subchapter shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law.

29 U.S.C. § 164(b). According to Simms, Local 1752's requirement that he pay fees for obtaining referrals through the hiring hall amounts to compulsory union “membership” under section 14(b), and therefore, Mississippi can prohibit those fees via its right to work law. Local 1752, however, contends that section 14(b) does not apply, and Mississippi's right to work law is therefore preempted under these circumstances.

At the outset, it is important to describe clearly the scope of several allegations in the complaint. First, the only fees at issue are fees assessed to Simms, a non-union member, for obtaining referrals through Local 1752's exclusive hiring hall. Second, Simms does not allege that these fees were unreasonable or excessive relative to the costs of operating the hiring hall. Instead, Simms's argument is that, regardless of the amount, all hiring hall fees can be prohibited by a state right to work law because payment of those fees amounts to union “membership” under section 14(b).

This argument hinges on Simms's interpretation of how the hiring hall fees at issue here fit within two provisions of the NLRA, sections 8(a)(3) and 14(b), which were first added to the NLRA by the Taft–Hartley Act in 1947.² It is instructive first to review the historical context of the relevant aspects of the Taft–Hartley Act. See Commc'ns Workers v. Beck , 487 U.S. 735, 747, 108 S.Ct. 2641, 101 L.Ed.2d 634 (1988) (“[T]he structure and purpose of § 8(a)(3) are best understood in light of the statute's historical origins.”). Prior to the Taft–Hartley Act, section 8(a)(3) of the NLRA permitted closed shop, union shop, and agency shop agreements. Oil, Chem. & Atomic Workers Int'l Union v. Mobil Oil Corp. , 426 U.S. 407, 414, 96 S.Ct. 2140, 48 L.Ed.2d 736 (1976). Generally speaking, a closed shop is a type of union-security agreement that requires prospective employees to become union members before commencing employment. Id. at 409 n.1, 96 S.Ct. 2140. In contrast, a union shop, which requires employees to join the union after being hired, and an agency shop, which requires employees to make payments to the union after being hired but not to join the union, are less stringent types of union-security agreements. See id. “By 1947, [closed shops] had come under increasing attack,” and Congress determined that they should be banned. Beck , 487 U.S. at 748, 108 S.Ct. 2641. That being said, Congress also recognized that prohibiting closed shops could create a free rider problem—i.e. , employees choosing not to contribute financially to the union but still benefiting from the union's actions. See id.

Against this historical backdrop, section 8(a)(3) of the Taft–Hartley Act attempted to accomplish the “twin purposes” of eliminating “the most serious abuses of compulsory unionism ... by abolishing the closed shop” but still allowing certain union-security agreements to counter the free rider problem. NLRB v. Gen. Motors Corp. , 373 U.S. 734, 740–41, 83 S.Ct. 1453, 10 L.Ed.2d 670 (1963). Specifically, section 8(a)(3) “makes it an unfair labor practice for an employer ‘by discrimination in regard to hire or tenure of employment ... to encourage or discourage membership in any labor organization.’ ” Beck , 487 U.S. at 744, 108 S.Ct. 2641 (quoting 29 U.S.C. § 158(a)(3) ). While this would appear to bar any union-security agreement, section 8(a)(3) also contains a proviso that allows unions to require “membership” as a condition of employment thirty days after the beginning of employment so long as the following safeguards are met:

[N]o employer shall justify any discrimination against an employee for nonmembership in a labor organization (A) if he has reasonable grounds for believing that such membership was not available to the employee on the same terms and conditions generally applicable to other members, or (B) if he has reasonable grounds for believing that membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership....

29 U.S.C. § 158(a)(3) ; see also Beck , 487 U.S. at 744–45, 108 S.Ct. 2641. “Taken as a whole, § 8(a)(3) permits an employer and union to enter into an agreement requiring all employees to become union members as a condition of continued employment, but the ‘membership’ that may be so required has been ‘whittled down to its financial core.’ ” Beck , 487 U.S. at 744–45, 108 S.Ct. 2641 (...