No. 8 6 - 2 9 6
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
JOHN S. SMITH,
Plaintiff and Appellant ,
THE MONTANA POWER COMPANY,
a Montana corporation,
Defendant and Respondent.
APPEAL FROM: District Court of the Second Judicial District,
In and for the County of Silver BOW,
The Honorable Mark P. Sullivan, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Harlen, Thompson & Parish; Richard L. Parish argued,
Helena, Montana
For Respondent:
Patrick T. Fleming argued, Butte, Montana-
Submitted: November 25, 1 9 8 6
Decided: J a n u a r y 1 6 , 1987
Filed: .!Ah/ 161987
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Appellant John Smith instituted a wrongful termination
action against the Montana Power Company (MPC), specifically
pleading negligence and breach of good faith and fair deal-
ing. The District Court for the Second Judicial District,
Silver Bow County, granted the summary judgment motion of MPC
on the ground that Mr. Smith's claims were preempted by
federal law. We a-ffirm.
The issue is whether the District Court erred when it
held that Mr. Smith's negligence and good faith claims were
preempted by federal law.
In December 1981, John Smith was hired by MPC as an
instrument and control journeyman at Colstrip I and 11. Mr.
Smith was a member of the Tnternational Brotherhood of Elec-
trical Workers Local No. 44 which had a collective bargaining
agreement with MPC during all times relevant to this case.
In September 1982, Mr. Smith was discharged by MPC. Mr.
Smith maintains in his brief that he attempted to file a
grievance in accordance with the collective bargaining agree-
ment, but MPC refused to discuss the case with his union
representative. The District Court found, however, that
" [tlhe affidavits submitted by Defendant also disclose that
Plaintiff failed to exhaust his remedies under the collective
bargaining agreement."
Mr. Smith filed an amended complaint in April 1986,
alleging MPC had violated its duty of good faith and fair
dealing and had negligently investigated the allegations
which led to his termination. MPC filed a motion for summary
judgment on the grounds: (1) that John Smith did not exhaust
the grievance procedure set forth in the collective
bargaining agreement; (2) that state law is preempted by
federal law in this case and thus the state tort claims must
be dismissed; and (3) that the applicable federal statute of
limitations expired prior to the filing of the complaint.
The District Court granted MPC's motion for summary judgment
stating that the state tort claims were preempted by the
federal labor law governing collective bargaining agreements,
Did the District Court err when it granted summary
judgment and held that Mr. Smith's negligence and good faith
claims were preempted by federal law?
A summary judgment motion shall be granted if there j - e
no genuine issue as to any material fact and the moving party
is entitled to judgment as a matter of law. Rule 56 (c),
M.R.Civ.P. There is no dispute that there was a collective
bargaining agreement in effect between MPC and Mr. Smith when
Mr. Smith was discharged. There is also no dispute that Mr.
Smith filed this lawsuit in the District Court for the Second
Judicial District alleging two state tort law violations on
the part of MPC. We agree with the District Court that Mr.
Smith has failed to set forth any material facts precluding
summary judgment.
Our analysis must then shift to whether MPC is entit-led
to judgment as a matter of law. The District Court based its
dismissal decision primarily on the United States Supreme
Court case of Allis-Chalmers v. Lueck (1985), 471 U.S. 202,
105 S.Ct. 1904, 8 5 L.Ed.2d 206. In Allis-Chalmers, Roderick
Lueck brought a state tort claim against his employer and its
insurer which administered an insurance plan included in a
collective bargaining agreement, seeking recovery for alleged
bad faith in the handling of his back injury claim. The
collective bargaining agreement established a grievance
procedure which culminated in final and binding arbitration.
Mr. Lueck did not attempt to grieve his dispute, but filed
suit in state court. The Wisconsin Supreme Court held Mr.
Lueck's tort claim was not preempted by national labor laws.
The United States Supreme Court reversed stating:
We do hold that when resolution of a state-law
claim is substantially dependent upon analysis of
the terms of an agreement made between the parties
in a labor contract, that claim must either be
treated as a 5 301 claim (cite omitted) or dis-
missed as pre-empted by federal labor-contract law.
Allis-Chalmers, 471 U.S. at 220, 105 S.Ct. at 1916, 85
L.Ed.2d at 221. Allis-Chalmers reasoned that unless federal
law governed claims which involve a collective bargaining
agreement, varying interpretations could result and the
congressional goal of a unified body of labor-contract lav~
would be subverted. In addition, federal preemption of these
state-tort claims was held necessary to preserve the central
role of arbitration in the resolution of labor disputes.
Section 301 of the Labor Management Relations Act
provides :
Suits for violation of contracts between an employ-
er and a labor organization representing employees
in an industry affecting commerce . . .
may be
brought in any district court of the United States
having jurisdiction of the parties ...
29 U.S.C. S 185 (a) . Textile Workers v. Lincoln ills (1957),
353 U.S. 448, 77 S.Ct. 912, 1 I1.Ed.2d 972, interpreted S 301
to be a congressional mandate to develop a unified federal
common law to address labor contract disputes. Teamsters v.
L,ucas Flour Co. (1962), 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d
593, then addressed the preemption of 5 301 and concluded
"that in enacting S 301 Congress intended doctrines of feder-
al labor law uniformly to prevail over inconsistent local
rules." Lucas Flour, 369 U.S. at 104, 82 S.Ct. at 577, 7
Although Mr. Smith did not mention the collective bar-
gaining agreement in his amended complaint, the fact remains
that the bargaining agreement must be analyzed to resolve
this case. The Allis-Chalmers court stated:
[I]t is a question of federal contract interpreta-
tion whether there was an obligation under this
labor contract to provide the payments in a timely
manner, and, if so, whether Allis-Chalmers' conduct
breached that implied contract provision.
Allis-Chalmers, 471 U.S. at 215, 105 S.Ct. at 1913, 85
L.Ed.2d at 218.
Likewise, the issues surrounding Mr. Smith's discharge
are questions of federal contract interpretations. The
obligations regarding MPC's dismissal of Mr. Smith arise out
of the various collective bargaining agreem.ent sections set
out below. The employment agreement between MPC and the
Electrical Workers Local Union No. 44, of which Mr. Smith was
a member, provides in pertinent part:
ARTICLE 11. TERM
Section 1.
That for and in consideration of harmonious
relations and settled conditions of employment with
financial and personal relations mutually benefi-
cial, the parties hereto do hereby enter into,
establish and agree to the following wage schedules
and conditions of employment . .
. It is understood
and agreed that the members of the International
Brotherhood of Electrical Workers in the employ of
the Company under this Agreement and receiving the
following wage schedules and conditions of employ-
ment are in return therefor to render to said
Company honest and diligent service.
ARTICLE 111. RECOGNITION
Section 1.
The "Company" hereby recognizes the "Union" as
the exclusive bargaining agent for all employees
performing electrical work in the classifications
covered hereby . . .
In addition, the bargaining agreement sets out a very
extensive grievance procedure to he followed by any employee
"who feels that he or they have been aggrieved on any matter
arising out of or outside of the Agreement . . ." The griev-
ance procedure spells out a six step process that must be
followed by an aggrieved employee. At the conclusion of an
unsuccessful grievance proceeding, the agreement provides for
arbitration of the dispute:
It is understood and agreed that in the event
any question or controversy arising under this
Aqreement, or any of its terms, cannot be amicably
adjusted by the parties hereto, the same shall be
settled by arbitration, as follows:
The following arbitration section sets out a detailed and
complete arbitration process and provides that such arbitra-
tion "shall be final and binding upon the parties."
The collective bargaining agreement between Mr. Smith
and MPC was unusual in that it did not address the discharge
of an employee or the standards to be applied in a discharge
situation. Thus, while there are not any specific discharge
provisions upon which Mr. Smith's tort claims are "substan-
tially dependent," it is clear that those tort claims are
"substantially dependent" on the above referenced sections.
The grievance procedure covers all grievances "arising out of
or outside the [ a ]
7
greement" (empha.sisadded) . Therefore the
grievance procedure, and the arbitration procedure if the
grievance proceedings prove unsuccessful, covers Mr. Smith's
dispute with MPC.
This Court cannot neutralize or disregard the collective
bargaining agreement. As required by Allis-Chalmers, we
conclude that the District Court did not err in holding Mr.
Smith's negligence and good faith cia-ims were preempted by
federal law. This decision is necessary to insure a unified
body of labor-contract law and preserve the central role of
arbitration in labor disputes.
We note that the District Court found that " [tlhe affi-
davits submitted by Defendant also disclose that Plaintiff
failed to exhaust his remedies under the collective bargain-
ing agreement." Although the District Court did not base its
summary judgment order on the fact that Mr. Smith failed to
exhaust his grievance procedure, we should point out that our
recent case of Brinkman v. State of Montana (Mont. 19861, -
,
P. 2d - 43 St.Rep. 2163, ruled that the failure to exhaust
contractual remedies under a collective bargaining agreement
barred Mr. Brinkman from suing for wrongful discharge. While
the Brinkman case does not control the disposition of this
case because the District Court did not base its summary
judgment on Mr. Smith's failure to exhaust the grievance
procedure, we do note the Brinkman holding.
We Concur: ,
*/