NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 19-3466
_____________
SCREEN ACTORS GUILD – AMERICAN FEDERATION OF
TELEVISION AND RADIO ARTISTS, AFL-CIO
Appellee
v.
SHERIDAN BROADCASTING NETWORKS, Sheridan
Broadcasting Corporation, Ronald Davenport, Jr.
and Ronald Davenport, Sr.
Appellants
_____________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 2:18-cv-455)
Magistrate Judge: Hon. Maureen P. Kelly
_______________
Submitted Under Third Circuit LAR 34.1(a)
On November 20, 2020
Before: JORDAN, KRAUSE, and RESTREPO, Circuit Judges
(Filed December 18, 2020)
_______________
OPINION
_______________
This disposition is not an opinion of the full court and, pursuant to I.O.P. 5.7,
does not constitute binding precedent.
JORDAN, Circuit Judge.
The Screen Actors Guild – American Federation of Radio Artists, AFL CIO (the
“Guild”) seeks unpaid wages, withheld union dues, and various other expenses and costs
due under the terms of a collective bargaining agreement with Sheridan Broadcasting
Networks (“Sheridan”). Sheridan and the Guild arbitrated this dispute as required by
their agreement. At arbitration, Sheridan stipulated that it owed the entire amount the
Guild sought. After Sheridan did not pay that sum, as awarded after arbitration, the Guild
sued for enforcement of the award, naming as Defendants Sheridan, two of its officers,
and an affiliated corporation. It also sought an additional 25% in liquidated damages,
attorneys’ fees, and joint and several liability against all of the Defendants based on the
Pennsylvania Wage Payment and Collection Law (“WPCL”).
We are asked to decide first whether the Defendants waived their defense to
liability under the WPCL, and second whether the WPCL is preempted by Section 301 of
the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(c). The Defendants,
of course, say no to the first question and yes to the second, and we agree. They did not
waive their opportunity to argue that the state statute is preempted by the LMRA and that
they therefore have no liability under the WPCL. The Guild can claim neither prejudice
nor surprise in facing that defense. And the LMRA does indeed preempt the WPCL in
this case. A contrary conclusion would result in inconsistent rights being afforded to
employees working in different states covered by the same collective bargaining
agreement, which is the exact harm Congress sought to avoid in passing the LMRA.
I. BACKGROUND
The Guild and Sheridan are parties to a collective bargaining agreement (the
“CBA”), which includes an arbitration clause and covers the time period between
November 8, 2016 and November 7, 2019.1 For collective bargaining purposes, the
Guild represents “all regular full-time and part-time newspersons, audio journalists and
producers employed by [Sheridan] in the United States.” (App. at 47.) In accordance
with the CBA’s dispute resolution procedure, the Guild filed a grievance against Sheridan
for alleged violations of the CBA, claiming that Sheridan had terminated all Guild
employees on August 29, 2017, without giving proper notice, and further had failed to
remit union dues and to pay the terminated employees their wages, out-of-pocket
expenses, and severance owed. After the parties could not resolve their dispute, it went
before an arbitrator who awarded the Guild $240,052.11, an amount to which Sheridan
stipulated. Despite that stipulation, Sheridan did not pay the award.
1
Schedule I, Section 11 of the CBA describes the two-step procedure for handling
disputes, with step one being the filing of a grievance, and, if a dispute remains, step two
being arbitration. At arbitration:
The arbitrator shall only have the authority to interpret
compliance with the provisions of this Agreement, and shall
not have authority to add to, subtract from or alter in any way
the provisions of this Agreement. The decision of the
arbitrator on any issue properly before him/her shall be final
and binding upon the Company, the Union and the employee
or employees involved. The cost of arbitration, including the
salary and expense incident to the services of the arbitrator,
shall be shared equally by both parties.
(App. at 60.) The CBA was signed by Ronald Davenport, Jr., in his capacity as General
Counsel for Sheridan. No individual was party to the CBA, and the CBA did not define
the term “employer” to include individuals.
3
The Guild then filed suit against Sheridan, as well as Sheridan Broadcasting
Corporation (“SBC”), Ronald Davenport Sr., and Ronald Davenport Jr. (the
“Davenports”). The Guild alleged breach of contract for failure to comply with the
arbitration award, conversion of union dues, and violation of the WPCL.2 It requested
judgment in the amount of $325,827.64, punitive damages in the amount of $250,000.00,
and attorneys’ fees and costs. The Defendants did not file an Answer, so the Guild
moved for entry of default judgment. The Defendants then answered, admitting
numerous facts, including that the Davenports are “officer[s] and agent[s] of [Sheridan]
within the meaning of Section 2.1 of the WPCL.” (App. at 46, 102.)
The Guild was prepared to file a motion for judgment on the pleadings, but the
Defendants “indicat[ed] interest in resolving all claims” by a “final written settlement
agreement.” (App. at 13.) At a settlement conference with the District Court,3 the
Defendants agreed to provide a draft consent judgment, but they failed to follow through,
so the Court suggested that the Guild file its motion for judgment on the pleadings. It
did, and the District Court granted judgment in favor of the Guild and against Sheridan
and SBC for breach of contract, and against all of the Defendants for conversion and for
violating the WPCL. The judgment was for $325,827.64. The Court later granted the
2
The WPCL authorizes “[a]ctions by an employee, labor organization, or party to
whom any type of wages is payable to recover unpaid wages and liquidated damages may
be maintained in any court of competent jurisdiction[.]” 43 Pa. Stat. § 260.9a(b). It
defines employer to include “any agent or officer[,]” id. § 260.2a, and “allow[s] costs for
reasonable attorneys’ fees of any nature to be paid by the defendant[,]” id. § 260.9a(f).
3
The parties consented to the jurisdiction of the Magistrate Judge.
4
Guild’s motion for attorneys’ fees in the amount of $50,994.16, pursuant to the WPCL.
Punitive damages were not awarded.
The District Court’s rulings were premised on an acceptance of the Guild’s
argument that the WPCL was not preempted by the LMRA. The Court reasoned that
Section 301 of the LMRA “pre-empts state law … insofar as resolution of the state law
claims require[s] interpretation of a collective bargaining agreement[,]” [sic] but that
here, “interpretation of the CBA is not needed to resolve [the Guild’s] WPCL claim.”
(App. at 18 (quoting Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 409 n.8
(1988)).) The Court concluded that our decision in Antol v. Esposto, 100 F.3d 1111 (3d
Cir. 1996), in which we held the WPCL was preempted, id. at 1120-21, was not
controlling because our “primary concern” there was “the ability of employees to bypass
CBA grievance procedures by suing corporate officers in state court[.]” (App. at 19.)
Lastly, the Court noted that the Defendants had “voluntarily and repeatedly conceded
individual and collective liability to Plaintiff’s WPCL claim …, and so have waived any
defense to this claim.” (App. at 19.)
The Defendants timely appealed.
5
II. DISCUSSION4
The Defendants present us with only one issue. They say, “the District Court
err[ed] by holding that the Appellee’s claims under the Pennsylvania [WPCL] were not
preempted by the [LMRA.]” (Opening Br. at 2.) Because the WPCL was the basis for
holding the Davenports personally liable, awarding liquidated damages, and awarding
attorneys’ fees, the Defendants ask that those rulings be overturned. They argue that the
LMRA preempts any action in state law that is based on or requires the interpretation of a
collective bargaining agreement. The Guild responds that, because interpretation of the
CBA was already completed during the arbitration process and because the WPCL is
only being used to enforce an established right, application of the WPCL is not
preempted.
The Defendants have the more persuasive position, but before turning to the
merits, we first consider the Guild’s argument that the Defendants waived their
4
The District Court had subject matter jurisdiction to enforce the arbitration award
under § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, along
with the usual federal question jurisdiction accorded by 28 U.S.C. § 1331. See Unite
Here Local 1 v. Hyatt Corp., 862 F.3d 588, 595 (7th Cir. 2017) (“§ 185(a) … jurisdiction
is understood to include a request to enforce (or vacate) an award entered as a result of
the procedure specified in a collective bargaining agreement for the arbitration of
grievances.” (citing United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S.
593, 595-96 (1960))); see also E. Associated Coal Corp. v. United Mine Workers of Am.,
Dist. 17, 531 U.S. 57 (2000) (reviewing the enforcement of an arbitration award that
resulted from a dispute over a collective bargaining agreement). We have jurisdiction
pursuant to 28 U.S.C. § 1291.
The standard of review for a grant of judgment on the pleadings is plenary. See
Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290 (3d Cir. 1988). “We
review a District Court’s decision as to the waiver of an affirmative defense for abuse of
discretion.” In re Asbestos Prod. Liab. Litig. (No. VI), 921 F.3d 98, 104 (3d Cir. 2019).
6
preemption defense by failing to raise it with particularity in their Answer and by failing
to move to dismiss. (See Answering Br. at 9 (citing Systems, Inc. v. Bridge Elecs. Co.,
335 F.2d 465, 466 (3d Cir. 1964)).)
A. Waiver
Despite the waiver arguments made in its briefing, the Guild appears to
acknowledge in a supplemental filing that preemption has in fact always been in dispute.
(See Appellee’s Rule 28(j) Letter at 1 n.1 (“The only matter that has ever been in dispute
is the assertion by Ronald Davenport, Sr. and Ronald Davenport, Jr. that application of
the [WPCL] in this case is preempted by the [LMRA.]”).) The Defendants no doubt
welcome that concession. They contend that they preserved their preemption defense by
pleading a failure to state a claim and by raising preemption at a suitably early moment in
the litigation – in their response to the Guild’s motion for judgment on the pleadings.
The District Court decided “that all defenses to liability have been waived” (App.
at 14), elaborating that the “Defendants have voluntarily and repeatedly conceded
individual and collective liability to Plaintiff’s WPCL claim before this Court, and so
have waived any defense to this claim.” (App. at 19.) But while the Defendants may
have conceded certain facts alleged in the Guild’s Complaint, they did not concede the
applicability of the WPCL, nor did they accept liability for the enhanced damages and
expanded liability created by that statute.
The District Court appears to have taken Sheridan’s acceptance of responsibility
for its obligations under the CBA, as awarded by the arbitrator, as an acceptance by all
7
the Defendants of responsibility for statutory enhancements under the WPCL.5 It was
not, although some of the Defendants’ statements tended in that direction. The Court was
also understandably troubled by what it perceived as the Defendants’ “delays and
gamesmanship,” but the proper redress for such conduct should begin with non-
dispositive sanctions, not waiver of a potentially meritorious defense. (App. at 14.) See
McMullen v. Bay Ship Mgmt., 335 F.3d 215, 217-18 (3d Cir. 2003) (“We have
emphasized this Court’s policy of favoring litigation on the merits, rather than imposing
dismissals with prejudice or a default judgment. In Hewlett v. Davis, 844 F.2d 109, 113
(3d Cir. 1988), we stated that ‘[t]hese must be sanctions of last, not first, resort.’”).
Review of the Complaint and Answer do not reflect an admission that the WPCL
applies. The Defendants denied the allegations in Paragraphs 29 through 32 of the
Complaint that assert the WPCL claim, and they raised relevant affirmative defenses.6
5
The District Court said:
It is clear to this Court, based upon the conduct displayed and
representations made to the Court, that at all times and in all
proceedings before this Court up to February 25, 2019,
Defendants have conceded individual and joint liability for all
amounts owed arising out of the Award of Arbitration (and
have consented to the entry of judgment), but through delays
and gamesmanship, are now engaging in behavior that
dishonors this Court and the impacted employees. …
Plaintiff was invited to file a Motion for Sanctions, but has
thus far refrained from seeking additional relief that would
otherwise be available.
(App. at 14.)
6
Although boilerplate does not on its own carry the day, the Defendants did plead
that “[t]he Complaint fails to state a claim upon which relief can be granted” and that
8
There was not a relinquishment or forfeiture of legal defenses to joint liability or to
enhanced damages under the WPCL.
Importantly, we are here dealing with an alleged waiver of an LMRA preemption
defense, a defense serious enough that it has been permitted even when first raised on
appeal, given the “compelling policy in favor of uniform application of federal law in
actions to enforce labor contracts.” Apponi v. Sunshine Biscuits, Inc., 809 F.2d 1210,
1215 (6th Cir. 1987) (citation omitted); see also Sweeney v. Westvaco Co., 926 F.2d 29,
40 (1st Cir. 1991) (“[A] court should prove more willing to make an exception from the
normal waiver rule when a § 301 pre-emption question is at issue than in the ordinary
case.”). That policy strengthens our decision to address this matter on the merits.
B. Preemption
The Supreme Court, our sister courts, and our own decision in Antol teach that the
Defendants’ position is the correct one – the LMRA broadly preempts suits arising out of
rights embodied in a CBA. See, e.g., Alaska Airlines Inc. v. Schurke, 898 F.3d 904, 920
(9th Cir. 2018), cert. denied, 139 S. Ct. 1445 (2019); Whitehurst v. 1199SEIU United
Healthcare Workers E., 928 F.3d 201, 206-07 (2d Cir. 2019); Antol, 100 F.3d at 1117.
That preemption is necessary to ensure consistency in the enforcement of rights afforded
employees under the same CBA, even if those employees are working in different states.
All aspects of this dispute can be decided by looking to Antol, where we held
WPCL claims preempted by section 301 of the LMRA and provided a thorough
“Plaintiff is not entitled to any damages or relief not specifically provided for under the
applicable statutes and regulations.” (App. at 105-06.)
9
background on the purpose and contours of LMRA preemption. We explained that,
“[a]lthough section 301 refers only to jurisdiction, it has been interpreted as authorizing
federal courts to fashion a body of common law for the enforcement of collective
bargaining agreements” in order to provide “uniform interpretation of contract terms to
aid both the negotiation and the administration of collective bargaining agreements.”
Antol, 100 F.3d at 1115 (citations omitted). We noted that “[n]ational policy is
particularly important in the enforcement of arbitration provisions, a common element of
most collective bargaining agreements.” Id. (citation omitted). We thus distilled the
principle that “claims based squarely on a collective bargaining agreement or requiring
analysis of its terms are preempted by section 301 and are removable to the federal
courts.” Id. at 1117 (citations omitted).
Of course, “not all state law is preempted.” Id. at 1115. For instance, “the
[Supreme] Court [has] concluded that an employee could enforce a state law banning
retaliatory discharge, even though she was covered by a collective bargaining agreement
that provided for arbitration for claims of discharge without cause” because the state law
matter was “outside the ‘arbitral realm’ of collective bargaining agreements.” Id.
(quoting Lingle, 486 U.S. at 411). It has also “concluded that federal labor law was not
in conflict with a state statute that imposed a monetary penalty for each day that passed
between an employee’s discharge and receipt of payments for wages due.” Id. at 1116
(citing Livadas, 512 U.S. 107).7
7
The District Court relied extensively on Livadas. That reliance was misplaced.
In Livadas, a California law awarded a specific monetary penalty for each day, post-
10
Nevertheless, we interpreted the Supreme Court’s guidance to support our
decision that the WPCL was preempted. We recognized that the WPCL “does not create
a right to compensation…. [r]ather, it provides a statutory remedy when the employer
breaches a contractual obligation to pay earned wages.” Id. at 1117 (alterations in
original) (quoting Weldon v. Kraft, Inc., 896 F.2d 793, 801 (3d Cir. 1990)). And we said
that the “definition [of employer] created by state law, if applied to the [LMRA], would
substantially alter the scope and enforcement of the typical collective bargaining
agreement.” Id. at 1120.
The District Court mistook the meaning of Antol when it concluded that our
“primary concern was the ability of employees to bypass CBA grievance procedures.”
(App. at 19.) Indeed, bypassing arbitration was a concern, but our primary concern was
ensuring consistency in the enforcement of rights in a collective bargaining agreement.
See Beidleman v. Stroh Brewery Co., 182 F.3d 225, 234 (3d Cir. 1999) (“[T]he
underlying reason for section 301 preemption … [is] ‘the need for uniform interpretation
of contract terms to aid both the negotiation and the administration of collective
bargaining agreements.’” (quoting Antol, 100 F.3d at 1115)). If the WPCL were
enforceable in a circumstance like this, employees of the same company in different
severance, that an employee did not receive past wages due. As the Supreme Court
noted, “the primary text for deciding whether Livadas was entitled to a penalty was not
the [CBA], but a calendar.” Livadas, 512 U.S. at 124. “[T]he [CBA] is irrelevant to the
dispute” because it was not the right to wages at issue, it was the right to a new statutory
cause of action for the timely delivery of wages. Id. at 125. Here, by contrast, the wages
owed under the CBA were the basis of the arbitration award, and the Pennsylvania statute
acts to expand who must pay and how much is owed.
11
states would have different rights and remedies arising from the same CBA. That
potential for inconsistency is unacceptable under the LMRA.8
III. CONCLUSION
For the foregoing reasons, we will vacate the District Court’s grant of judgment on
the pleadings, as well as its award of attorneys’ fees, and will remand for further
proceedings consistent with this opinion.
8
We also note that the District Court was not at liberty to modify the arbitration
award as it appeared to do. The parties agree that the FAA restricts the modification of
arbitration awards, even when jurisdiction is asserted exclusively under the LMRA. See
Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013) (mixing and matching FAA
and LMRA cases while summarizing the standard for reviewing arbitration awards); see
also Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1624 (2018) (explaining that, “[w]hen
confronted with two Acts of Congress allegedly touching on the same topic … [a] party
seeking to suggest that two statutes cannot be harmonized, and that one displaces the
other, bears the heavy burden of showing a clearly expressed congressional intention that
such a result should follow” (internal quotation marks omitted) (citations omitted)). The
arbitrator awarded $240,052.11 for breaches of the CBA. The District Court awarded
$325,827.64 in damages, $50,994.16 in attorneys’ fees, and expanded liability to officers
and agents, based on those same breaches of the CBA. The parties did not argue, nor did
the Court explain, how the Guild had met the FAA’s restrictive rules for modifying an
arbitration award.
12