No. 84-499
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
DALE IvlALQUIST, GEORGE BOHARSKI ,
GEORGE BELT and LOCAL 768, IBEW,
Plaintiff and Appellant,
HOWARD P. FOLEY, a District of Columbia
Corporation; CITY ELECTRIC, a Montana
Corporation, and R.L. PAYNE COMPANY, INC.,
A Montana Corporation,
Defendants and Respondents.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable John S. Henson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Terry Wallace argued, Missoula, Montana
For Respondent:
Garlington, Lohn & Robinson; Charles E. McNeil argued,
(Foley), Missoula, Montana
Corette, Smith, Pohlman & Allen; Lissa K. Swan argued,
(City Electric), Butte, Montana
Milodragovich, Dale & Dye; Karl H. Boehm, (co-counsel
of City Electric) , Missoula, Montana
Worden, Thane & Haines; Stacey Weldele-Wade argued,
(Payne), Missoula , Montana
Submitted: December 10, 1985
Decided: February 13, 1986
Filed: FEB 1 3 1986
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Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of
the Court.
This is an appeal from an order of the Fourth Judicial
District Court dismissing plaintiffs' complaint on the basis
that the action was preempted by federal law and the State
District Court lacked subject matter jurisdiction to
adjudicate the controversy. We reverse and remand for trial.
This action was instituted by plaintiffs Dale Malquist,
George Roharski, George Belt and Local 768, IBEW. No issue
has been raised on appeal concerning standing of Local 768,
IBEW, to prosecute this tort action and therefore all
plaintiffs will be treated as one.
In 1979, Champion International, of Bonner, Montana,
began construction of an expansion project on a packaging
plant in Missoula County, Montana. Champion hired Matthews,
McCracken and Rutland (MM&R) of Baton Rouge, Louisiana, to do
the general electrical contracting work. In March of 1980,
MM&R, Howard P. Foley Company, City Electric and R. L. Payne,
Lnc., entered into a collective bargaining agreement with
Local 768 of the International Brotherhood of Electrical
Workers. Pursuant to the terms of the agreement signed by
the parties, all electrical contractors on the project were
to hire electricians through the Union referral books.
Hiring could be from no other source unless labor was not
available from the Union. Malquist, Boharski and Belt all
placed their names in the referral book and were hired by
MM&R until that company was terminated by Champion. At this
time the three plaintiffs were laid off pursuant to a
reduction in force and placed their names in the referral
book for future employment. Plaintiffs were referred to
defendants for employment, but were refused.
In September of 1980, a meeting was held between Union
officials and representatives of defendant employers. A
Union business agent, Reg McMurdo, was shown a list of 20-30
names allegedly blacklisted from the project. Plaintiffs
were blacklisted. Thereafter the Local filed a complaint
under the collective bargaining agreement. The
Labor-Management Committee deadlocked on the issue by a 6-6
vote, and the Union then dropped the complaint for the reason
that the conduct complained of was not covered in the
collective bargaining agreement, which only dealt with wages,
hours and conditions of work.
Plaintiffs then filed claims in the State District Court
for the willful and malicious blacklisting of the plaintiffs,
seeking both compensatory damages and punitive damages. Two
of the three defendants, R. L. Payne and City Electric, moved
for summary judgment, alleging federal preemption. The
District Court denied the motions for summary judgment, but
dismissed the complaint, holding that blacklisting is
arguably prohibited by the National Labor Relations Act
(NLRA) and thus the State District Court lacked subject
matter jurisdiction.
The issues presented on appeal are:
1. Whether plaintiffs' claim grounded in tort is
preempted by the National Labor Relations Act, thereby
denying the State District Court subject matter jurisdiction?
2. Whether plaintiffs failed to exhaust their
administrative remedies?
3. Whether the action is barred by the statute of
limitations?
Respondents place heavy reliance upon San Diego Building
Trades Council v. Garmon (1959), 359 U.S. 236, 79 S.Ct. 773,
3 L.Ed.2d 775. In Garmon, supra, the United States Supreme
Court established guidelines for determining respective
jurisdictions of the National Labor Relations Board and the
states in labor management relations. The Court said:
When it is clear or may fairly be assumed that the
activities which a State purports to regulate are
protected by 5 7 of the Natj-onal Labor Relations
Act, or constitute an unfair labor practice under
§ 8, due regard for the federal enactment requires
that state jurisdiction must yield. To leave the
States free to regulate conduct so plainly within
the central aim of federal regulation involves too
great a danger of conflict between power asserted
by Congress and requirements imposed. by state law.
359 U.S. at 244, 79 S.Ct. at 779, 3 L.Ed.2d at 782.
In dismissing the complaint, the trial court placed
emphasis upon the rule articulated by the Garmon court that
the conduct need only be "arguably subject" to the NLFA. The
language used by the Court in Garmon supports the trial
court's position:
... When an activity is arguably subject to 5 7
or 5 8 of the Act, the States as well as the
federal courts must defer to the exclusive
competence of the National Labor Relations Board if
the danger of state interference with national
policy is to be averted.
359 U.S. at 245, 79 S.Ct. at 780, 3 L.Ed.2d at 783.
Respond.enl:s acknowled.ge that two subsequent cases
modified the Garmon approach. In Sears, Roebuck & Company v.
San Diego County District Council of Carpenters (1978), 436
U.S. 180, 98 S.Ct. 1745, 56 L.Ed.2d 209, and Farmer v. United
Brotherhood of Carpenters and Joiners of America, Local 25
(1977), 430 U.S. 290, 97 S.Ct. 1056, 51 L.Ed.2d 338, the
Supreme Court protected the states from federal preemption
when the states were controlling conduct traditionally
subject to state jurisdiction, especially where the state had
a substantial interest in regulation of the conduct at issue
and the state's interest was one that did not unduly
interfere with federal regulation. The exception to federal
preemption recognized by the United States Supreme Court has
been primarily confined to a "violence" exception. Where the
defendant's conduct may well have constituted an unfair labor
practice but amounted to violence, the United States Supreme
Court has decided that the state's interest in protecting its
citizens from violence is sufficiently strong that the
state's tort law will be allowed to regulate and punish such
conduct. Farmer, 430 U.S. at 299, 97 S.Ct. at 1063, 51
We do not find respondents' authority dispositive of the
fact situation here at issue. Section 39-2-803, MCA,
provides :
Blacklisting Prohibited. If any company or
corporation in this state authorizes or allows any
of its agents to blacklist or any person does
blacklist any discharged employee or attempts by
word or writing or any other means whatever to
prevent any discharged employee or any employee who
may have voluntarily left the company's service
from obtaining employment with another person ...
such company or corporation or person is liable in
punitive damages to such employee so prevented from
obtaining employment, to be recovered by him in a
civil action ....
The conduct proscribed by the state statute is
"blacklisting" per se. There is no requirement that
blacklisting be related to an unfair labor practice. If an
employer blacklists an employee for any reason, that employer
is subject to tort liability under S 39-2-803, MCA.
In order for there to be a valid preemption in this
case, we must find that blacklisting is protected by the
NLRA. Section 7 of the NLRA, 29 U.S.C. S 157, relates to
employee rights to self-organization, to bargain collectively
and to engage in concerted activities for the purpose of
bargaining collectively. The applicable provisions of S 8,
specifically 29 U.S.C. S 8 (a) of the NLRA, define unfair
labor practices as: restraining or coercing employees in
exercise of S 7 rights; dominating or interfering with a
union; d.i.scriminating in regard to hiring and tenure to
encourage or discourage m.embership in unions; discharging or
discriminating against an employee because he has filed
charges or given testimony under the NLRA; refusing to
bargain collectively. Nothing in these sections refers to
blacklisting and clearly blacklisting would not be
investigated by the Roard unless the blacklisting was done
for some purpose prohibited by the NLRA. Blacklisting for
any purpose is unlawful in Montana.
The District Court felt that it should not inquire into
the reasons for the blacklisting because "arguably"
blacklisting was subject to the NLRA's proscriptions. In its
order the District Court said:
This court is not willing to invade the province of
the Labor Board by staging an inquiry into
blacklisting, this supposed list of electricians
who were allegedly disapproved of and subsequently
boycotted for, as yet, unknown reasons when they
sought employment with the defendants.
No one in this litigation contends that plaintiffs were
blacklisted for labor-related activities. The reason for the
blacklisting is unknown. Blacklisting per se is unlawful
under Montana law, 5 39-2-803, MCA.
Plaintiffs argue that preemption is not called for
because:
1. The underlying conduct, blacklisting, is not
protected under the NLRA;
2. There is an overriding state interest in protecting
citizens from blacklisting and it's consequent harm. This
interest has been manifested in a statute awarding punitive
damages for blacklisting.
3. There is no risk that this cause of action, in tort,
will affect national labor policy.
We find plaintiffs' argument compelling in light of the
recent decision of the 9th Circuit Court of Appeals in
Garibaldi v. Lucky Food Stores, Inc. (9th Cir. 1984), 726
Garibaldi was employed by Lucky Food Stores as a truck
driver until his discharge in October, 1980. Garibaldi filed
an action in state court in California alleging he was
wrongfully discharged for "whistle blowing." The case was
removed to federal court a-nd the Federal District Court held
that his discharge was preempted by the National Labor
Management Relations Act. The Circuit Court of Appeals
reversed and established guidelines for preemption which
allow plaintiffs' claims in this case to go forward.
In Garibaldi, supra, the Ninth Circuit placed. great
emphasis upon a balancing of state and federal interests.
The court quoted from the United States Supreme Court
decision in Farmer, supra, wherein the Court stated:
Our cases indicate, however, that inflexible
application of the doctrine [of preemption in
industrial relations] is to be avoided, especially
where the State has a substantial interest in
regulation of the conduct at issue and the State's
interest is one that does not threaten undue
interference with the federal regulatory scheme.
Garibaldi, 726 F.2d at 1373, quoting Farmer, 430 U.S. at 302,
S.Ct. at 1064, 51 L.Ed.2d at 351.
The Ninth Circuit acknowledged that the United. States
Supreme Court carefully tailored its holding to situations
where the defendant1s conduct was outra.geous and
"particularly abusive." The Garibaldi court expanded the
"violence" exception to embrace wrongful discharge conduct
amounting only to a violation of California's public policy.
While the discharge of Garibaldi may have constituted an
unfair labor practice, yet it was significant that California
had a paramount interest in regulating violations of public
policy within its state. The court in Garibaldi, 726 F.2d at
1374, said:
Thus, it is clear that California's interest in
providing a cause of action for violation of public
policy or a statute is the enforcement of the
underlying statute or policy, not the regulation of
the employment relationship.
Certiorari to the United States Supreme Court was denied at
The case at bar is similar. Blacklisting per se is
proscribed in Montana. The statute does not seek to regulate
the relationship between the employer and the employee.
Neither does the statute seek to regulate unfair labor
practices treated in 5 7 or 5 8 of the NLRA, 29 U.S.C. 55 157
and 158.
We find the rationale in Garibaldi to be persuasive and
adopt it as the basis for our decision here. The court said:
A claim grounded in state law for wrongful
termination for public policy reasons poses no
significant threat to the collective bargaining
process; it does not alter the economic
relationship between the employer and employee.
The remedy is in tort, distinct from any
contractual remedy an employee might have under the
collective bargaining contract. It furthers the
state's interest in protecting the general
public--an interest which transcends the employment
relationship. (Citation omitted.)
Garibaldi, 726 F.2d at 1375.
The act of blacklisting per se does not constitute an
unfair labor practice. Blacklisting sounds in either (1)
intentional infliction of mental or emotional distress or (2)
tortious interference with prospective or present contractual
relationships. However, in light of the provisions of
S 39-2-803, MCA, blacklisting itself constitutes tortious
conduct giving rise to a civil remedy. We therefore hold
that federal preemption does not exist.
There is not an exhaustion question in this case.
Administrative remedies are in the federal system. We here
have an action grounded in tort under state law. The conduct
complained of is, as we have held, not subject to NLRA
proscription. The tortious conduct complained of in state
court has no exhaustion component.
Our holding that plaintiffs' claim constitutes a tort
under state law requires the application of the three year
statute of limitations applicable to tort actions in Montana,
27-2-204, MCA. Because no specific statute of limitations
is provided under state law for blacklisting, the tort of
blacklisting is covered by the general tort statute of
limitations and of course the same would be true for actions
grounded in intentional. infliction of mental distress and
tortious interference with contractual relationships. This
cause was filed within two years of the incidents in question
and is timely.
We reverse and remand for trial in accordance with the
views herein expressed.
We concur:
Chief Justice
Mr. Justice L. C. Gulbrandson dissenting.
I respectfully dissent.
The majority holds that the conduct complained of is not
subject to NLRA proscription. In effect, an exception to the
preemption requirement has been created by labeling the
action as one in tort under state law. An opposite result
was reached in Campbell v. McLean Trucking Company (E.D.N.Y.,
1984), 592 F.Supp. 1560, 1564, where the court stated:
A mere labeling of the conduct complained.
of, however, does not satisfy the re-
quirements necessary to avoid preemption.
The Supreme Court in Lockridge, 403 U.S.
at 292, 91 S.Ct. at 1920, said that it is
the conduct and not the legal description
that is important. This substance-form
problem was recognized, for example, i n.
Breitegger v. C.B.S., 43 Cal.App.3d 283,
117 ~ a l . ~ ~699, 706 (1974), where an
t y
unfair labor practice within the Board's
jurisdiction was not cognizable in State
court merely by 1a.beling it an inten-
tional tort.
Section 8 of the NLRA clearly prohibits employment discrimi-
nation, and blacklisting is recognized as an unfair labor
practice.
Further, as indicated by Mount Desert
Island Hospital and contrary to plain-
tiffs' State tort characterization,
blacklisting has long been recognized as
an unfair labor practice and, thus,
prohibited by the Act. See NLRB v.
Waumbec Mills, 114 F.2d 2 2 6 , 7 3 2 - F ( l s t
Cir. 1940) ; Cone Bros. Contracting -, Co.
135 N.L.R.B. 108 (1962). In short, - at
- least, plaintiffs' claim one is
the
"'arguably subject to ... the Act'
... [citation omitted1 ... and there-
fore come[s] within the primary jurisdic-
tion of the ... Board . . . ." Abrams
- Carrier Corp., denied, 401 U.S. 1009,
v.
Cir.1970), cert.
434 F.2d 1234, 1253 (2d
91 S.Ct. 1253, 28 L.Ed.2d 545 (1971).
(Emphasis in original.)
Campbell, supra, 592 F.Supp. at 1563.
The majority opinion contains the following statement:
No one in this litigation contends that
plaintiffs were blacklisted for
labor-related activities.
In fact, plaintiff's counsel, in his brief filed Zuly 5,
1984, with the trial court, declared as follows:
When this case was presented to the
Board, plaintiffs had to raise and prove
to the Board that defendants' mainte-
nance, circulation and other use of the
blacklist was for the purpose of discrim-
inating against plaintiffs for activites
[sic] rela.ting to self-organization,
collective bargaining, concerted actions
or union affilitations [sic]. 29 USC
S 1 5 8 (a)(1) and ( 3 ) .
I also note that Local 768, International Brotherhood of
Electrical Workers, is a party plaintiff in this action.
I agree with the trial court's determination that the
first issue to be decided. is whether blacklisting occurred,
and if so, for what reasons. That issue is arguably within
the jurisdiction of the NLRB and that Board should. be allowed
to exercise its remesial authority if blacklisting activity
is found. The trial court, in dismissing the ca.use condi-
tionally without prejud.ice, clearly would entertain the
plaintiff's action in tort if the NLRB found that hlacklist-
ing occurred.
I join in the foregoj..ng dissgnt of Mr. Justice L . C.
Gulbrandson.
Justice