St. Thomas-St. John Hotel & Tourism Ass'n, Inc. v. Gov't of the U.S. Virgin Islands By & Through the Virgin Islands Dep't of Labor & Eleuteria Roberts

• Decision Date: 03 June 1999
• Docket Number: No. Civ.1999–54.,Civ.1999–54.
• Citation: 41 V.I. 317
• Court: U.S. District Court — Virgin Islands
• Parties: THE ST. THOMAS–ST. JOHN HOTEL & TOURISM ASSOCIATION, INC., the St. Thomas–St. John Chamber of Commerce, Inc., and the St. Croix Hotel & Tourism Association, Inc. Plaintiffs, v. THE GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS BY AND THROUGH THE VIRGIN ISLANDS DEPARTMENT OF LABOR and Eleuteria Roberts, in Her Official Capacity as Acting Commissioner of the Virgin Islands Department of Labor, Defendants, Esla HUGGINS and Ladiah Whyte Intervenors.

41 V.I. 317

THE ST. THOMAS–ST. JOHN HOTEL & TOURISM ASSOCIATION, INC., the St. Thomas–St. John Chamber of Commerce, Inc., and the St. Croix Hotel & Tourism Association, Inc. Plaintiffs,

v. THE GOVERNMENT OF THE UNITED STATES VIRGIN ISLANDS BY AND THROUGH THE VIRGIN ISLANDS DEPARTMENT OF LABOR and Eleuteria Roberts, in Her Official Capacity as Acting Commissioner of the Virgin Islands Department of Labor, Defendants,Esla HUGGINS and Ladiah Whyte Intervenors.

No. Civ.1999–54.

District Court of the Virgin Islands, Division of St. Thomas and St. John.

June 3, 1999.

Charles E. Engeman, St. Thomas, for the plaintiffs.

Carol S. Moore, Michael McLaurin, Assistant Attorneys General, for the defendant Government of the Virgin Islands.

Kathleen Navin Legal Services of the Virgin Islands, for the Intervenors.

MEMORANDUM

MOORE, Chief J.

INTRODUCTION

Procedural Posture

Plaintiffs have sued to enjoin the Government of the Virgin Islands [“government”] from conducting any preliminary or formal hearings on wrongful discharge claims premised on the Virgin Islands Wrongful Discharge Act [“WDA”], V.I. Code Ann. tit. 24, § 76, based on this Court's earlier ruling that federal labor law preempts the WDA. See Bell v. Chase Manhattan Bank, Civil No.1997–129, --- F.Supp.2d ---, 1999 WL 86821 (D.V.I. Feb. 2, 1999). The plaintiffs' request for a temporary restraining order [“TRO”] against the Virgin Islands Department of Labor [“VIDOL”] was granted on April 6, 1999. A hearing on plaintiff's motion for preliminary injunction was scheduled for April 12, 1999. The government was granted continuances to allow it time to research and thoroughly brief the matter. Esla Huggins and Ladiah Whyte [“intervenors”] have been given permission to intervene as defendants.

On May 7, this Court heard argument and took evidence on the motion for preliminary injunction. At the end of the hearing, the Court extended the TRO for two weeks to give the parties time to file supplemental memoranda and to give itself time to prepare this Memorandum and Order. The extended TRO enjoined VIDOL from conducting any formal wrongful discharge hearings, with the clarification that VIDOL could continue to accept wrongful discharge complaints and to facilitate mediation of the claims short of formal adjudication. The modified TRO has been further extended to May 2nd.

The Parties

“Plaintiffs are not-for-profit corporations that represent the interests of the vast majority of employers on the islands of St. Thomas, St. John and St. Croix in the U.S. Virgin Islands.” (Compl. at 1–2.) John Murphy, as a member of its board of directors, gave testimony on behalf of the St. Thomas–St. John Hotel & Tourism Association, whose members employ approximately 4,000 employees. John DeYoung, president of the Chamber of Commerce, testified that the Chamber has 640 members which employ over 7,000 employees. Wendell Snyder, treasurer of the St. Croix Hotel & Tourism Association, explained that its 235 members employ over 1,000 employees. All three boards authorized the suit to be filed on behalf of their respective organizations.

Eleuteria Roberts is the acting commissioner of VIDOL, the department charged with enforcement of the WDA.

The intervenors are St. Thomas residents who presently have wrongful discharge claims pending before VIDOL. Ms. Whyte was hired in August of 1998 and discharged in December of 1998. Ms. Huggins was hired in November of 1997 and discharged in July of 1998 [defendants and intervenors collectively are “respondents”]. Both intervenors seek backpay and reinstatement. ( See Mot. to Intervene, Ex.s 1, 1A.)

The Wrongful Discharge Act

In 1986, the Virgin Islands Legislature enacted the WDA,¹ which strictly limited to nine the legal grounds for which a private employer may dismiss an employee. The WDA declares that an employee of a private, non-governmental employer who is dismissed for any reason other than the nine enumerated grounds “shall be considered to have been wrongfully discharged.” ² As originally enacted in 1986, the nine statutory grounds for discharge were prefaced by the phrase, “[u]nless modified by contract, an employer may dismiss an employee....” 24 V.I.C. § 76(a) (Michie 1986). In 1996, however, the Legislature amended section 76(a) to provide that “[u]nless modified by union contract, an employer may dismiss any employee” only for the same nine reasons, plus, of course, business necessity or economic hardship. Thus, private non-union employment contracts may not provide any grounds for dismissal other than those contained in the WDA. The amended WDA requires a private employee to join a union and mandates that the private employer negotiate with that union before they can contract to modify, add to, or subtract from the statutory grounds for lawful discharge.

The Temporary Restraining Order

This Court issued the TRO premised on the reasoning applied in Bell v. Chase Manhattan Bank. In Bell, the Court dismissed plaintiff's wrongful discharge count premised on the WDA, finding the act to be preempted on two bases.

First, the act is directly preempted by section 7 of the National Labor Relations Act, 29 U.S.C. §§ 151–69 [“NLRA”], which guarantees the “right to refrain” from all concerted activity because it requires union involvement before any contractual modification to the WDA's requirements. See29 U.S.C. § 157; Bell, slip op. at 15–18, WL ^*4–5.

Second, the act is preempted because it upsets the “balance of power” between labor and management in an area Congress intended to remain free from state, territorial, or federal law under the reasoning of Lodge 76, Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132 (1976). See Bell, slip op. at 18–24, WL ^*5–8. The Legislature impermissibly intruded upon an area intended by Congress to be free from state or territorial legislation. See Machinists, 427 U.S. at 149.

The Complaint

The complaint contains two counts. Count I alleges preemption of the WDA by federal labor law. Count II alleges a violation of 42 U.S .C. § 1983, namely, that the acting commissioner, acting in her official capacity under color of territorial law, has violated federal constitutional and statutory rights by enforcing the WDA. The complaint seeks a declaration that the act is unconstitutional and an injunction against its enforcement.³

Plaintiffs' argument is two-fold.⁴ Plaintiffs allege that the WDA impermissibly tilts the field in favor of unionization by limiting any contractual modification to union contracts, per the 1996 amendment to the WDA. The assertion is that this violates federal labor policy as embodied in the NLRA and its encouragement and protection of voluntary unionism at the heart of the relationship between private employees and employers. See Pattern Makers' League v. NLRB, 473 U.S. 95, 99–103 (1985) (recognizing right of employees to refrain from concerted union activities by being able to resign union membership without interference.) Plaintiffs also allege that the WDA impairs the ability of an employer to defend itself against unionization efforts by preventing the employer from negotiating contracts with individual employees that contain changes in the terms of discharge.

ANALYSIS

Plaintiffs' Standing to Sue

[A]n association has standing to sue on behalf of its members “when (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.”

New York State Club Ass'n, Inc. v. City of New York, 487 U.S. 1, 7 (1988) (quoting Hunt v. Washington Apple Adver. Comm'n, 432 U.S. 333, 343 (1977)). The individual employers which comprise the four plaintiff organizations would have standing to bring this suit in their own right since they are suffering immediate injury to their rights under national labor law. ⁵ The purpose of the first prong is “simply to weed out plaintiffs who try to bring cases, which could not otherwise be brought, by manufacturing allegations of standing that lack any real foundation.” Id. It is also true that neither the claim asserted (rights of employers to defend against unionization infringed, leading to NLRA preemption and resultant section 1983 violation) ⁶ nor the relief requested (declaratory and injunctive relief) ⁷ requires individual members of the plaintiff associations to participate in this suit. The only matter left, then, is whether this suit is germane to the plaintiff organizations' purposes.

The St. Thomas–St. John Hotel & Tourism Association's articles of incorporation state that the “objects, purposes and nonprofit activities of the corporation shall be ... [t]o facilitate, protect and promote the mutual interests of the Corporation's members.” (Pls.' Ex. A.) The St. Thomas–St. John Chamber of Commerce's articles of incorporation provide that the “objective of this Chamber shall be to.... Foster good relations between employers and employees;.... Advance the interests of member business[es] in the Virgin Islands in every way consistent with the public good; Represent its members with respect to issues of significance to business.” (Pls.' Ex. B.) The St. Croix Hotel & Tourism Association's articles of incorporation provide that one of its “objects and purposes” is to “protect and promote the mutual interests of its members.” (Pls.' Ex. C.) Even without the specifics of the plaintiffs' articles of incorporation, it is axiomatic that labor relations are germane to the purposes of all three plaintiff organizations. Since the plaintiffs meet all three prongs of New York State Club Ass'n, the Court finds that all three associations have standing to bring this suit.

The Four Factors for a Preliminary Injunction

“A district court can enter a preliminary injunction prohibiting state enforcement activities pending final resolution of a case in ...