Swinford v. Russ Dunmire Oldsmobile, Inc.

• Court: Washington Court of Appeals
• Writing for the Court: TURNER
• Citation: Swinford v. Russ Dunmire Oldsmobile, Inc., 918 P.2d 186, 82 Wn.App. 401 (Wash. App. 1996)
• Decision Date: 28 June 1996
• Docket Number: No. 17900-8-II
• Parties: John SWINFORD, Appellant/Cross-Respondent, v. RUSS DUNMIRE OLDSMOBILE, INC., a Washington corporation, Respondent/Cross-Appellant.

Page 401

82 Wn.App. 401

918 P.2d 186

John SWINFORD, Appellant/Cross-Respondent, v. RUSS DUNMIRE OLDSMOBILE, INC., a Washington corporation Respondent/Cross-Appellant.

No. 17900-8-II.

Court of Appeals of Washington Division 2.

June 28, 1996.

Paul Alexander Lindenmuth, Law Offices of Neil J. Hoff, Tacoma, for appellant.

Philip R. Sloan, Roxanna Jane Coolidge, Sloan Bobrick & Oldfield, Tacoma, for respondent.

TURNER, Judge.

Swinford sued his employer, Russ Dunmire Oldsmobile, Inc., for unlawful termination, alleging handicap discrimination and breach of contract based on an employee handbook. Russ Dunmire answered, claiming that Swinford's breach of contract claim was preempted by federal labor law because his job position was governed by a collective bargaining agreement (CBA). The trial court directed a verdict in favor of Russ Dunmire on Swinford's handicap discrimination claim, and the jury returned a verdict in favor of Russ Dunmire on the other claims. Swinford appeals the directed verdict that was granted against his handicap discrimination claim. Russ Dunmire appeals the denial of its directed verdict motion on the breach of contract claim. We hold that federal law preempts Swinford's state law breach of contract claim because it requires interpretation of the CBA. Accordingly, Russ Dunmire's directed verdict motion should have been granted. Because the jury rendered a verdict for Russ Dunmire on this claim, we affirm the judgment of dismissal. Additionally, we affirm the directed verdict in favor of Russ Dunmire on Swinford's handicap discrimination claim because Swinford failed to establish he was handicapped.

FACTS

John Swinford was in Russ Dunmire Oldsmobile's (Russ Dunmire) employ for over five years. Swinford was a member of the International Association of Machinists, Local 1152. During Swinford's employment with Russ Dunmire, and at the time of his termination, there was a collective bargaining agreement (CBA) between the dealership and the union. Under the terms of the CBA, Swinford could be discharged for "just cause."

In February 1990, Russ Dunmire issued an "Employee Handbook" to its employees. The employees were requested to sign an acknowledgement of receipt of the handbook. The acknowledgement provided that the handbook was not a set of promises or an employment contract; it did not alter the "at will" employment arrangement; and employer representations would not supersede the acknowledgement. Swinford and other union employees refused to sign the acknowledgement because its "at will" language conflicted with the "just cause" provisions in the CBA. Instead, Swinford and other union employees circled and signed only the portion of the acknowledgement that stated they received the handbook.

In July 1990, Swinford had a motorcycle accident that rendered him temporarily unable to work. He met with Ben Lewis, his supervisor, to discuss the implications for his job. Swinford and Lewis reviewed the leave of absence provisions in the employee handbook. The handbook included a provision on "Leaves of Absence," a right not provided in the CBA. The handbook provided, in part, that "[e]mployees granted a leave of absence will retain their Company service rights for a period of 3 months while on leave." Lewis later discussed Swinford's situation with the owner, Roger Dunmire, who then consulted a labor management consultant. The consultant drafted a letter to Swinford, which was signed by Lewis. The letter said:

The purpose of this letter is to acknowledge the fact that you are on a medical leave effective July 16, 1990. We agree to grant such a leave as long as you report back to work no later than October 16, 1990. This is consistent with our employee handbook that you received. You will be required to present a doctors [sic ] certificate confirming your ability to work and, if any, the limitations that may apply to your returning to the same type of work....

During Swinford's absence, Russ Dunmire hired a temporary replacement for Swinford.

In late August 1990, Swinford's physician said he could return to work on September 29, 1990. Swinford relayed this information to Lewis. Nevertheless, on September 14, 1990, Lewis told Swinford that his employment with Russ Dunmire had been terminated. In a letter to Swinford, Lewis said the termination was "based on our locating a replacement employee for your position that better met our company's productivity standards than you ever demonstrated in your employment with our company."

Swinford sued Russ Dunmire, alleging breach of contract, handicap discrimination, and unlawful termination. Russ Dunmire answered that the breach of contract claim was preempted by federal law. The court granted Russ Dunmire's motion for a directed verdict on the handicap discrimination claim. The jury returned a special verdict in favor of Russ Dunmire on the remaining claims. Swinford alleges that the trial court erred in instructing the jury, in directing a verdict on his handicap discrimination claim, and by denying his motion for a new trial. Russ Dunmire cross-appeals, arguing that the trial court erred in failing to dismiss Swinford's breach of contract claim on the ground that it was preempted by federal law.

ANALYSIS

1. Breach of Contract Claim

Russ Dunmire contends that the trial court erred in denying its motions for summary judgment ¹ and a directed verdict on the ground that the breach of contract claim was preempted by federal law. We agree.

Although the employee handbook in this case stated it was not a set of promises or employment contract, it did contain leave of absence provisions not included in the collective bargaining agreement. Although this particular handbook provision favors Swinford, other provisions do not. The employee handbook could be binding only if authorized by the CBA. We acknowledge that the employer granted a leave of absence and failed to follow its own handbook. Nevertheless, we must rule against Swinford to protect the rights of all union workers under CBAs. We refuse to set a precedent that allows employers to disregard CBAs and enter into separate contracts with individual union members. Otherwise, employers could render any hard-won CBA ineffective merely by issuing non-union approved employee handbooks.

Under federal law, the employee handbook could be binding only if authorized by the CBA. Swinford should have brought a grievance under the CBA to determine the effectiveness of the handbook. Instead, he ignored his labor union, the CBA, and the grievance procedure. We have no choice but to affirm the judgment.

Existing federal labor laws were developed over many hard-fought battles for workers' rights. Those laws apply here. Federal rules of law must be used to interpret CBAs "in order to ensure uniform interpretation" of such agreements and thereby "promote the peaceable, consistent resolution of labor-management disputes." See Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 404, 108 S.Ct. 1877, 1880, 100 L.Ed.2d 410 (1988); Commodore v Univ. Mechanical Contractors, Inc., 120 Wash.2d 120, 126-27, 839 P.2d 314 (1992).

Section 301 of the Labor Management Relations Act (LMRA) of 1947, codified at 29 U.S.C. § 185(a), grants federal courts jurisdiction over claims arising from CBAs. State courts have concurrent jurisdiction. ² Even in state courts, however, federal law must be applied to such claims:

if the resolution of a state-law claim depends upon the meaning of a collective-bargaining agreement, the application of state law ... is pre-empted [sic ] and federal labor-law principles--necessarily uniform throughout the Nation--must be employed to resolve the dispute.

Lingle, 486 U.S. at 405-06, 108 S.Ct. at 1881; Hill v. J.C. Penney, Inc., 70 Wash.App. 225, 230, 852 P.2d 1111, review denied, 122 Wash.2d 1023, 866 P.2d 39 (1993).

Citing Hill v. J.C. Penney, Inc., 70 Wash.App. 225, 852 P.2d 1111, Swinford maintains that section 301 of the LMRA does not preempt his breach of contract claim because his claim is based solely on the employment handbook, and is completely independent of the CBA. Hill, however, did not decide whether a breach of contract claim is preempted by section 301. In Hill, the plaintiff sued J.C. Penney, stating a claim for wrongful termination based on an implied contract to terminate only for cause. She relied on an employee handbook, personnel procedures manual, oral contracts, and an expired CBA. The court rejected Hill's attempt to revive her right to be terminated only for cause under the expired CBA but said:

However, there are state law remedies which do not interfere with the collective bargaining process. Hill can litigate in state court a claim that Penney made a binding promise, or entered into a contract with her individually, or any other claim that does not interfere with the collective bargaining process.

Hill, 70 Wash.App. at 233, 852 P.2d 1111. Although the court in Hill implied that an independent contract claim might not interfere with the collective bargaining process, it did not reach the issue of whether an action for breach of an implied contract was preempted by section 301. Instead, it ruled that Hill failed to prove J.C. Penney modified the "at will" employment by making promises in its handbook or otherwise. Hill, 70 Wash.App. at 234, 852 P.2d 1111. Accordingly, it would be improper to interpret Hill as holding that state breach of contract claims are not preempted by section 301 of the LMRA. This is a question of first impression in Washington.

Likewise, we reject Swinford's contention that Commodore v. University Mechanical Contractors, Inc., 120 Wash.2d 120, 839 P.2d 314, permits a state law breach of implied contract claim. In Commodore, the Washington Supreme Court discussed section 301 preemption of tort claims. The court noted that while states cannot use state law to resolve breach of CBA disputes, a different issue is presented "when a...