UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
JANICE STEINBACH,
Plaintiff-Appellant,
v. No. 99-1557
DILLON COMPANIES, INC.,
a Kansas corporation, doing
business as King Soopers;
LYNDA PRICKETT, individually,
Defendants-Appellees.
ORDER ON PETITION FOR REHEARING
Filed May 30, 2001
Before BRISCOE , McKAY , and BALDOCK , Circuit Judges.
This matter is before the court on appellant’s petition for panel rehearing of
our decision filed March 8, 2001. The petition for rehearing is granted. The
court’s opinion is withdrawn and the judgment is vacated. A revised opinion is
attached to this order.
Entered for the Court
Patrick Fisher, Clerk of Court
By:
Keith Nelson
Deputy Clerk
F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
MAY 30 2001
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
JANICE STEINBACH,
Plaintiff-Appellant,
v. No. 99-1557
DILLON COMPANIES, INC.,
a Kansas corporation, doing
business as King Soopers;
LYNDA PRICKETT, individually,
Defendants-Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 99-M-1879)
Submitted on the briefs:
Hugh S. Pixler of Gregson & Pixler, P.C., Denver, Colorado, for
Plaintiff-Appellant.
Emily Keimig and William A. Wright of Sherman & Howard L.L.C.,
Denver, Colorado, and Raymond M. Deeny of Sherman & Howard L.L.C.,
Colorado Springs, Colorado, for Defendants-Appellees.
Before BRISCOE , McKAY , and BALDOCK , Circuit Judges.
BRISCOE , Circuit Judge.
Plaintiff Janice Steinbach appeals the district court’s dismissal of her state
tort claims of tortious interference with contract and intentional infliction of
emotional distress (outrageous conduct), as preempted by § 301 of the Labor
Management Relations Act of 1947, 29 U.S.C. § 185. She also argues that
because the district court held the claims preempted, it lacked jurisdiction to find
that she failed to state a claim for outrageous conduct. We affirm. 1
Plaintiff is a former employee of King Soopers and member of the United
Food and Commercial Workers, Local No. 7. She alleges that while she was on
a properly scheduled vacation, the store manager, threatening termination, made
her return to work early and then initiated disciplinary proceedings for her
allegedly unexcused absences, knowing that plaintiff had a history of mental
instability. Plaintiff alleges that these acts were the result of personal hostility,
that the store manager intended to cause her emotional harm, and that the events
caused plaintiff to attempt suicide and to experience panic attacks. She also
claims that the store manager took these actions to interfere with her contract with
King Soopers. The district court held the claims preempted by § 301 because they
1
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination
of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
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necessarily required consideration of the parties’ collective bargaining agreement.
We review the district court’s preemption rulings de novo. Fry v. Airline
Pilots Ass’n, Int’l , 88 F.3d 831, 835 (10th Cir. 1996). The ruling that plaintiff
failed to state a claim for outrageous conduct is also reviewed de novo. Proctor &
Gamble Co. v. Haugen , 222 F.3d 1262, 1278 (10th Cir. 2000) (reviewing de novo
dismissal of state tort claims for failure to state a claim).
A state tort claim is preempted by § 301 if its resolution “depends upon the
meaning of a collective-bargaining agreement.” Lingle v. Norge Div. of Magic
Chef, Inc , 486 U.S. 399, 405-06 (1988). In Lingle , the Supreme Court held that
a retaliatory discharge claim was not preempted because it involved purely factual
questions whether the plaintiff was discharged and whether the employer’s
motivation was to deter or interfere with the employee’s exercise of worker’s
compensation rights. Id. at 407. As the claim could be resolved without
reference to the collective bargaining agreement, it was not preempted.
Plaintiff argues that under Lingle neither of her tort claims are preempted .
We first consider her tortious interference with contract claim. Plaintiff seems to
argue that she had two employment contracts with King Soopers: the collective
bargaining agreement, and an at-will agreement that she would work and her
employer would pay her until one of them terminated the relationship. See
Appellant’s Br. at 22. She argues that because it was this at-will contract with
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which the store manager interfered, there is no need to refer to the collective
bargaining agreement and thus her claim is not preempted. Plaintiff has not
shown that the parties intended to enter into an agreement separate from the
collective bargaining agreement, however. Indeed, the creation of such an outside
employment contract is contrary to the concept of collective bargaining, which is
intended to forge an exclusive contract controlling all aspects of the
employer-employee relationship. See J.I. Case Co. v. NLRB , 321 U.S. 332, 338
(1944) (“The very purpose of providing by statute for the collective agreement is
to supersede the terms of separate agreements of employees with terms which
reflect the strength and bargaining power and serve the welfare of the group.”).
As the collective bargaining agreement creates and controls the employment
relationship between King Soopers and plaintiff in this case, it is the only contract
upon which her interference claim can be based.
Plaintiff seems to allege two types of tortious interference with contract,
interference with King Soopers’ performance, as described in the Restatement
(Second) of Torts, § 766 (1979), and interference with plaintiff’s own
performance, as described in § 766A of the Restatement. Colorado has
recognized both forms of this tort. See Westfield Dev’t Co. v. Rifle Inv. Assoc. ,
786 P.2d 1112, 1117 (Colo. 1990).
To show tortious interference under § 766, plaintiff must prove that a
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contract existed between her and King Soopers, that the store manager knew of
the contract, that the manager intentionally and improperly caused King Soopers
not to perform the contract, and that damage resulted. Trimble v. City & County
of Denver , 697 P.2d 716, 726 (Colo. 1985). Whether King Soopers failed to
perform the contract requires consideration of the collective bargaining
agreement. See Fry , 88 F.3d at 839 (holding interference claim preempted
because it required resort to the collective bargaining agreement to determine
whether it was breached).
An interference claim under § 766A, on the other hand, requires only that
plaintiff show that a third party “intentionally” and “improperly” interfered with
plaintiff’s own performance of her contract. The Restatement explains that the
term “improperly” is used to describe “the balancing process expressed by the
terms ‘culpable and not justified.’” Restatement (Second) of Torts, Introductory
Note to Ch. 37 (1979). Whether a person acted “improperly” requires a balancing
of the parties’ conflicting interests to determine whether the interference was
warranted under the particular circumstances, considering the factors set out in
Restatement § 767:
(a) the nature of the actor’s conduct,
(b) the actor’s motive,
(c) the interests of the other with which the actor’s conduct
interferes,
(d) the interests sought to be advanced by the actor,
(e) the social interests in protecting the freedom of action of the actor
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and the contractual interests of the other,
(f) the proximity or remoteness of the actor’s conduct to the
interference, and
(g) the relations between the parties.
Trimble , 697 P.2d at 726.
When it is a corporate agent who has interfered with a contract between the
corporation and the plaintiff, such interference is generally privileged if the agent
acted for a bona fide organizational purpose. Q.E.R., Inc. v. Hickerson , 880 F.2d
1178, 1184 (10th Cir. 1989); Zappa v. Seiver , 706 P.2d 440, 442 (Colo. Ct. App.
1985); see Zelinger v. Uvalde Rock Asphalt Co. , 316 F.2d 47, 52 (10th Cir. 1963)
(“[T]he rule [is] that any interference with a corporation’s contract by an officer,
director or employee of the corporation who is in good faith serving the corporate
interests is privileged.”) . This privilege is not absolute, but must be weighed in
balance with the factors listed above. In this case, whether the store manager was
justified in calling plaintiff back to work and instituting disciplinary proceedings
still requires evaluation the manager’s authority under the collective bargaining
agreement, and therefore the issue is preempted under §301 of the LMRA. The
district court was correct, therefore, in finding plaintiff’s tortious interference
claim preempted.
Similarly, plaintiff’s outrageous conduct claim cannot be determined
without reference to the collective bargaining agreement. We have considered
outrageous conduct claims against employers on several occasions. In Johnson v.
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Beatrice Foods Co. , 921 F.2d 1015 (10th Cir. 1990), an employee alleged that out
of personal hostility, his supervisor instituted a campaign of intentional
discrimination and harassment to cause him emotional distress, including verbal
abuse, institution of discipline that the supervisor knew was unwarranted, and
changes to the employee’s working conditions. We held the employee’s claim
was preempted by § 301 because the outrageousness of his supervisor’s conduct
could not be evaluated without resort to the collective bargaining agreement, and
because the state tort did not create an independent method of measuring when an
employer’s work-related conduct is outrageous. Id. at 1020-21.
In Albertson’s, Inc. v. Carrigan , 982 F.2d 1478 (10th Cir. 1993), we held
that an employee’s outrageous conduct claim was not preempted by § 301. The
employee alleged that defendants conspired with her employer to falsely accuse
her of shoplifting, to have her arrested, and to suspend her from employment.
We held that the outrageous conduct claim was not preempted because the
employee could prove her claim by “show[ing] defendants conspired to have
[her] arrested by fabricating her theft . . . from her employer,” without referring
to the collective bargaining agreement. Id. at 1482.
In our most recent case, Garley v. Sandia Corp. , No. 99-2255, 2001 WL
8308 (10th Cir. Jan. 3, 2001), we addressed a situation similar to plaintiff’s.
Garley alleged that his supervisor, out of personal hostility, conspired with others
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to falsely accuse him of timecard fraud. He alleged that his supervisor, knowing
that he was authorized to attend to union business during work hours, initiated an
investigation into his alleged timecard fraud, had the employee followed, and
caused his discharge. We held that the employee’s outrageous conduct claim, as
it related to these allegations, was preempted because “[d]etermining whether [the
employer’s] conduct during its investigation . . . was ‘outrageous,’ . . . requires
construction of [the employer’s] rights and obligations under the [collective
bargaining agreement] as that is the reference point against which [the
employer’s] action must be scrutinized.” Id. at *13.
Plaintiff argues that her situation is analogous to that of the plaintiff in
Albertson’s . She argues that because the store manager allegedly fabricated the
unexcused absence charge to create a reason to discipline plaintiff, knowing that
such acts would cause plaintiff emotional distress, there is no need to look at the
collective bargaining agreement. We disagree.
Plaintiff’s allegation that her manager fabricated the unexcused absence
charge is simply an allegation that the charge was unwarranted. Her complaint
alleges that the store manager “abused [her] authority” by requiring plaintiff to
come to work during her scheduled vacation and by bringing an unwarranted
unexcused absence charge. Appellant’s App. at 5. To determine whether the
manager abused her authority over plaintiff we must examine the manager’s
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authority to cancel plaintiff’s remaining vacation and require her to return to
work, and the propriety of her initiating disciplinary proceedings. These are
subjects covered by the collective bargaining agreement, and are subjects
ordinarily addressed in a grievance procedure. See Article 10 of Collective
Bargaining Agreement, Appellant’s App. at 58-62 (covering rights of management
and employees regarding scheduling, including vacations) and Article 43, id.
at 83-84 (covering use of grievance process for resolving disputes, including
scheduling disputes).
Because we cannot determine whether the store manager’s conduct was
outrageous without examining her authority, this claim is different from the
situation in Albertson’s , where the fabrication of shoplifting charges and arrest of
an employee, alone, would be outrageous. Instead, applying the rationale of
Garley and Johnson , we hold the district court was correct in finding plaintiff’s
outrageous conduct claim preempted. See Garley , 2001 WL 8308, at *12 & *13
(holding that employee’s civil conspiracy claim based on fabricated charge of
timecard fraud was not preempted, but outrageous conduct claim based on same
allegations was preempted because determining whether the supervisor’s conduct
was outrageous required resort to the collective bargaining agreement).
Our conclusion is buttressed by the Supreme Court’s language in
Allis-Chalmers Corp. v. Lueck , 471 U.S. 202 (1985), in which the Court held
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that a suit for bad faith handling of a disability claim was inextricably intertwined
with the collective bargaining agreement and was therefore preempted.
Discussing the danger of allowing state tort law to circumvent § 301, the Court
stated:
Claims involving vacation or overtime pay, work assignment, unfair
discharge–in short, the whole range of disputes traditionally resolved
through arbitration–could be brought in the first instance in state
court by a complaint in tort rather than in contract. A rule that
permitted an individual to sidestep available grievance procedures
would cause arbitration to lose most of its effectiveness . . . as well
as eviscerate a central tenet of federal labor-contract law under § 301
that it is the arbitrator, not the court, who has the responsibility to
interpret the labor contract in the first instance.
Id. at 219-20.
Finally, plaintiff argues that resort to the collective bargaining agreement is
unnecessary because the rule she was alleged to have broken was not contained in
the agreement, but in a separate set of policies developed by King Soopers. It is
the collective bargaining agreement that authorized the employer to develop these
policies, however, and it is the agreement which defines the scope of the
employer’s authority. See Garley , 2001 WL 8308, at *10 (rejecting argument that
claim was based on policies and rights separate from the collective bargaining
agreement, holding that employer’s Personnel Policy, Code of Ethics, and
Director’s Memo were “inextricably intertwined with consideration of the terms
of the labor contract”) (quotation omitted); Harris v. Alumax Mill Prods., Inc. ,
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897 F.2d 400, 403 (9th Cir. 1990) (rejecting similar argument and holding claim
preempted because “the determination of both the scope of [the employer’s]
control over the attendance policy and any consequences flowing from a violation
of that policy are dependent upon an analysis of the Agreement”). The district
court was correct, therefore, in holding plaintiff’s outrageous conduct claim
preempted. We need not consider the district court’s ruling on the merits of the
claim.
AFFIRMED.
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