F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JAN 3 2001
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
ELOY GARLEY,
Plaintiff-Appellant,
v.
No. 99-2255
SANDIA CORPORATION d/b/a
SANDIA LABORATORIES,
Defendant-Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. No. CIV-98-1127 JC/RLP)
Michael D. Armstrong, Albuquerque, New Mexico for Appellant.
Robert P. Tinnin, Jr. (Ryan M. Randall with him on the brief), Hinkle, Cox, Eaton,
Coffield & Hensley, LLP, Albuquerque, New Mexico for Appellee.
Before TACHA, HOLLOWAY and BALDOCK, Circuit Judges.
HOLLOWAY, Circuit Judge.
Plaintiff/Appellant Eloy Garley brought this action against Sandia Corporation
(Sandia) in New Mexico State District Court on August 17, 1998 alleging six state law
causes of action arising out of his employment at Sandia. Garley alleged: (1) breach of
implied contract; (2) breach of the duty of good faith and fair dealing; (3) retaliation; (4)
civil conspiracy; (5) defamation; and (6) intentional infliction of emotional distress.
Sandia removed the complaint to the United States District Court for the District of New
Mexico on September 14, 1998.
Sandia then moved to dismiss Garley’s suit on the ground that it failed to state a
claim on which relief may be granted. Garley moved to remand the case back to state
court. The judge denied Garley’s motion to remand and conditionally granted Sandia’s
motion to dismiss on the ground that Garley’s state law claims were preempted by § 301
of the Labor Management Relations Act (“LMRA”). The court granted Garley thirty days
in which to amend his complaint to state § 301 claims. When Garley failed to amend his
complaint accordingly, the court, sua sponte, unconditionally granted Sandia’s motion to
dismiss. On appeal, Garley claims error in: (1) the district court’s failure to grant his
motion to remand the case to state court; and (2) it’s decision to grant Sandia’s motion to
dismiss. We have jurisdiction pursuant to 28 U.S.C. § 1291.
I
A
FACTUAL BACKGROUND
Garley is a mechanic with Sandia and serves as a union steward for the Atomic
Projects and Production Workers Metal Trades Council, AFL-CIO (“Union”). The Union
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has a collective bargaining agreement (“CBA”) with Sandia. In 1996, after an
investigation into possible timecard fraud by Garley, Sandia terminated Garley’s
employment. Following procedures set forth in the CBA, the Union, acting on Garley’s
behalf, processed a grievance through arbitration.
On March 27, 1998, after arbitration hearings in October and December 1997, the
arbitrator found that Sandia had failed to carry its burden of establishing just cause to
support Garley’s termination, and directed that Garley be reinstated with full back pay,
benefits, and unbroken seniority. On April 7, 1998, Sandia complied with the order and
reinstated Garley. On August 14, 1998, Garley filed a complaint in New Mexico state
court stating state law claims arising from allegations that several members of Sandia’s
management conspired to levy against him false accusations of timecard fraud. Garley’s
version of the events leading to his termination, as alleged in his amended complaint,
follows.
Garley alleged that as a union steward he was permitted under Articles 6 and 9 of
the CBA to leave his post to attend to Union business. Complying with the procedural
requirements of those articles, Garley averred that he would fill out a form 9614
documenting the times during which he attended to Union business, and that he would
also customarily have his supervisor sign the form. Garley alleged that despite complying
with these procedures, on April 19, 1996 he was confronted by his immediate supervisor,
Mr. Rose, who demanded to know where he was going, and Garley says he responded he
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was leaving to attend to Union business.
Garley alleged in his First Amended Complaint that Mr. Rose, who had a
“personal axe to grind and a racist aversion toward plaintiff,” initiated an investigation
into timecard fraud, and that Mr. Rose related his “unsubstantiated allegations” to Mr.
Fraser, the manager of Sandia’s Employee and Labor Relations. Mr. Fraser and Mr. Harty
(another Sandia management official) then advised Mr. Rose to contact Mr. O’Neill,
Sandia’s in-house investigator, to conduct surveillance of Garley to catch him committing
timecard fraud, and that as a result Mr. O’Neill did conduct surveillance of Garley,
including following his vehicle on three occasions. App. at 54. Garley alleges that after
this surveillance, Mr. Rose ordered him to attend an “interview” where Mr. O’Neill
confronted him with dates and times of the surveillance. Id. at 54-55. Garley alleged that
during this “interview” he was neither asked to explain his activities nor informed of the
allegations against him. Id. at 55.
Garley alleges that Mr. Rose reported the results of O’Neill’s surveillance to two
members of the Disciplinary Review Committee, id. at 56, and that Mr. Rose explained
that the reason there was no written statement by Garley was because Garley had refused
to provide one. Id. at 56. Garley asserts, however, that during the seven month
investigation he was never asked to give an explanation of his activities, either verbally or
in writing. Id. Garley alleges that the Disciplinary Review Committee on receiving the
report that he committed timecard fraud (which amounted to three and one-half hours,
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totaling $80.00), terminated his employment, effective December 16, 1996. Id.
The Union commenced grievance proceedings on Garley’s behalf which were
inconclusive, and the parties agreed to binding arbitration. Id. at 48. Hearings were held
on October 13 and 14 and on December 1, 1997. The proceedings were terminated on
January 30, 1998, and on March 27, 1998 the arbitrator found the charge of timecard
fraud lacked sufficient proof. Id. at 49. The arbitrator ordered Sandia to reinstate Garley
to his job with full back pay, benefits, and unbroken seniority. Sandia reinstated Garley
on April 7, 1998. Id. at 49.
B
PROCEDURAL BACKGROUND
As noted, Garley filed suit in New Mexico state court in August 1998, alleging six
state law claims: (1) breach of implied contract; (2) breach of the duty of good faith and
fair dealing; (3) retaliation; (4) civil conspiracy; (5) defamation; and (6) intentional
infliction of emotional distress. On September 14, 1998, Sandia filed a notice of removal
in the United States District Court for the District of New Mexico on the ground that
Garley’s suit could have been commenced as an original action in federal court under 28
U.S.C. § 1331 because, according to Sandia, the state law claims were preempted by
federal law under § 301 of the LMRA.1 Consequently, the case was removable to federal
1
Section 301 of the LMRA states in pertinent part:
Suits for violation of contracts between an employer and a labor organization
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court under 28 U.S.C. § 1441.
After the removal Sandia filed a motion to dismiss for failure to state a claim
upon which relief may be granted under Fed. R. Civ. P. 12(b)(6). Sandia argued: (1)
Garley’s state law claims were preempted by § 301 of the LMRA; and (2) Garley failed to
state a cause of action under state law. Sandia argued that four of Garley’s state law
claims (civil conspiracy, defamation, breach of contract, and intentional infliction of
emotional distress) were preempted by § 301 and should be dismissed because they were
based on Sandia’s investigation and termination of Garley. Consequently, they depend
“wholly upon an interpretation of what investigatory and disciplinary actions Defendant
was authorized to take under the CBA . . .” App. at 78. Sandia further argued that
Garley’s two remaining state law claims (retaliation and breach of the duty of good faith
and fair dealing) were preempted by § 301 because they require review of the arbitrator’s
award and the terms of the collective bargaining agreement. See id. at 80.
The same day Sandia filed its motion to dismiss, Garley filed his First Amended
Complaint. Garley states that at the time of filing his amended complaint on September
18, 1998, there had been no filing by Sandia except its notice of removal in connection
representing employees in an industry affecting commerce as defined in this
chapter, or between any such labor organizations, may be brought in any district
court of the United States having jurisdiction of the parties, without respect to the
amount in controversy or without regard to the citizenship of the parties.
29 U.S.C. § 185(a).
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with Sandia’s preemption argument. From the amended complaint Garley excised all
references to the CBA, thereby attempting to show that his complaint was not based on
the collective bargaining agreement and was not preempted by § 301.
The First Amended Complaint restated Garley’s six state law claims. First, he
alleged that the activities of four of Sandia’s representatives (Rose, O’Neill, Fraser, and
Harty) constituted a civil conspiracy to deprive him of his employment, income, benefits,
and to impugn his reputation.2 App. at 53. More specifically, Garley based his civil
conspiracy claim on Rose’s timecard fraud investigation; his conveyance of
“unsubstantiated allegations” to Fraser and the subsequent surveillance; and the conduct
of the “interview,” where O’Neill confronted Garley with dates and times when he had
conducted surveillance against him and where Garley alleged that he was neither asked to
explain his activities nor informed of the allegations against him. Id. at 55. In addition,
Garley alleged that when Fraser became manager of Sandia’s Employee and Labor
Relations, he altered the composition of the Disciplinary Review Committee (the entity
which rules on disciplinary actions against employees who violate Sandia’s Code of
Ethics), so that a Union representative was no longer included on the Committee. Garley
2
Under New Mexico law, the elements of a cause of action for civil conspiracy are: (1)
the existence of a conspiracy; (2) a wrongful act or acts done pursuant to that conspiracy; and (3)
damages resulting from that act or acts. Reeves v. Wimberly, 107 N.M. 231, 235, 755 P.2d 75,
79 (N.M. Ct.App. 1988) (citing Las Luminarias of the New Mexico Council of the Blind v.
Isengard, 92 N.M. 287, 587 P.2d 444 (N.M. Ct.App. 1978)). The New Mexico Supreme Court
has ruled, however, that “[c]ivil conspiracy is not of itself actionable; the gist of the action is the
damage arising from the act(s) done pursuant to the conspiracy.” Reeves, 107 N.M. at 235, 755
P.2d at 79.
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also alleged that Fraser changed the Committee’s procedures so that notice of meetings
was no longer given to employees or their union. Garley maintained that this “civil
conspiracy” resulted in the Committee’s wrongful determination that he had committed
timecard fraud, leading to his termination on December 16, 1996, a determination later
overturned by the grievance arbitrator but which nonetheless deprived him of his
livelihood and tarnished his reputation.
Second, Garley alleged breach of implied contract. In support of this claim,
Garley maintained that Sandia’s published personnel policies and procedures found in its
Code of Ethics, Personnel Policies, and Director’s Memo, formed an express and implied
contract which had been breached by Sandia in that it failed to follow the criteria stated
for progressive disciplinary policy because, without clear and documented evidence
supporting the allegations against him, Sandia authorized an investigation that was
neither fair nor thorough.
Third, Garley alleged a claim of retaliation based on the fact that although the
arbitrator ruled that Garley was entitled to immediate reinstatement and other relief,
Sandia had stripped him of his Q-clearance without which any opportunities for
promotion and career advancement were almost nil and that Sandia retaliated by refusing
to reimburse his back pay, retirement funds, and by refusing to reinstate him to his
previous work station.
Fourth, Garley alleged breach of the duty of good faith and fair dealing by
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violating the public policy expressed by the New Mexico Unfair Practices Act. See
N.M. Stat. Ann., § 57-12-3 (1978) (“Unfair or deceptive trade practices and
unconscionable trade practices in the conduct of any trade or commerce are unlawful.”).
On this claim Garley further averred that Sandia did not comply with all the terms of the
award in that although reinstated, he was not given his former work station, his 401K
benefits were not fully restored, he was not reinstated with full seniority, and he was
stripped of his Q-clearance.
Fifth, Garley alleged a claim of defamation based on being summarily fired for a
trumped up alleged offense which had no basis in documented facts. Garley emphasizes
that he was an employee with a nineteen and one-half year record of unblemished service
and no disciplinary action, and Sandia’s actions branded him a thief.
Sixth, Garley alleged that Sandia committed the tort of intentional infliction of
emotional distress because it knew or should have known that the actions of Rose,
Fraser, O’Neill, and Harty were maliciously motivated and designed to punish and
humiliate Garley and would cause him emotional harm.
C
THE DISTRICT COURT RULING
On September 30, 1998, Sandia moved to dismiss Garley’s First Amended
Complaint on the same grounds it asserted in its original motion – that the claims were
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preempted by § 301. On November 3, 1998, Garley filed a motion to remand the case
back to New Mexico state court. On February 4, 1999, the district judge issued an
unpublished Memorandum Opinion and Order which denied Garley’s motion to remand
and conditionally granted Sandia’s motion to dismiss. The judge noted that the civil
conspiracy, defamation, breach of implied contract, and intentional infliction of emotional
distress claims all revolve around the manner in which Sandia conducted its investigation
of suspected employee misconduct and the way in which Garley was terminated. The
judge cited the articles of the CBA governing management of the business, treatment of
employees performing council duties, etc. and found that an analysis of whether Sandia
acted properly would inevitably require an analysis of the CBA and what it permitted.
This reasoning supported the position that there was § 301 preemption.
The judge likewise held that Garley’s retaliation and breach of the duty of good
faith and fair dealing claims were preempted by § 301 since one of the “key
determinants” for resolving these claims would be whether reinstatement as defined by
the CBA included reinstatement to the same work station and with the same security
clearance. The judge also denied Garley’s motion to remand, and ruled that Sandia’s
motion to dismiss would be granted unless Garley filed an amended complaint within
thirty days that stated claims under § 301 of the LMRA.
Rather than amending his complaint Garley filed a notice of appeal to this court on
March 2, 1999. On July 2, 1999, however, we dismissed that appeal for lack of
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jurisdiction because the district judge’s conditional dismissal was not a final decision
from which Garley could appeal. When Garley did not amend his complaint to state a §
301 claim, the judge sua sponte issued a final order on July 19, 1999 granting Sandia’s
motion to dismiss. Garley now appeals this final judgment and argues that the district
court erred both in granting Sandia’s motion to dismiss and in denying his motion to
remand the case to the New Mexico state court.
III
A
The district court granted Sandia’s motion to dismiss for failure to state a claim
upon which relief can be granted. We review that decision de novo. Brever v. Rockwell
Int’l Corp., 40 F.3d 1119, 1125 (10th Cir. 1994) (“[T]he sufficiency of a complaint is a
question of law which we review de novo.”) (quoting Ayala v. Joy Mfg. Co., 877 F.2d
846, 847 (10th Cir. 1989)); Jacobs, Visconsi & Jacobs, Co. v. City of Lawrence, 927 F.2d
1111, 1115 (10th Cir. 1991) (“We review de novo a district court's dismissal of a
complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim for which relief
could be granted.”). Whether state law is preempted by federal law is a conclusion of law
which we also review de novo. Panhandle E. Pipeline Co. v. Oklahoma ex rel. Comm’rs
of Land Office, 83 F.3d 1219, 1225 (10th Cir. 1996). We review a denial of a motion to
remand a claim for lack of removal jurisdiction de novo. Audette v. International
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Longshoremen’s & Warehousemen’s Union, 195 F.3d 1107, 1111 (9th Cir. 1999).
B
Congress has granted the federal courts removal jurisdiction to hear claims initially
brought in state court if the federal district court could have exercised original
jurisdiction. 28 U.S.C. § 1441(a) (“Except as otherwise expressly provided by Act of
Congress, any civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division
embracing the place where such action is pending.”). As the Supreme Court noted in
Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987), “[o]nly state-court actions that
originally could have been filed in federal court may be removed to federal court by the
defendant.” Here, we must determine whether Garley’s original complaint, although
stating state law claims, could have been founded in federal court under federal question
jurisdiction. See 28 U.S.C. § 1331 (“The district courts shall have original jurisdiction of
all civil actions arising under the Constitution, laws, or treaties of the United States.”).
Generally, the “well-pleaded complaint” rule requires that the federal question
appear on the face of the plaintiff’s properly pleaded complaint. Williams, 482 U.S. at
392 (“The presence or absence of federal-question jurisdiction is governed by the
‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only when a
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federal question is presented on the face of the plaintiff's properly pleaded complaint.”).
In other words, the plaintiff is considered to be the “master of the claim” since “he or she
may avoid federal jurisdiction by exclusive reliance on state law.” Id. Consequently,
cases originally brought in state court may not be removed to federal court even if a
federal defense is anticipated in the plaintiff’s complaint, and “even if both parties
concede that the federal defense is the only question truly at issue.” Id. at 393.
The rule that the federal question must appear on the face of the plaintiff’s
complaint is subject to an important exception, however. Under the “complete
preemption doctrine,” federal courts may exercise federal question jurisdiction over
complaints that, although not presenting federal questions on their face, nonetheless
present state law claims that are preempted by federal law. As the Supreme Court noted
in Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987), a “corollary of the
well-pleaded complaint rule . . . is that Congress may so completely pre-empt a particular
area that any civil complaint raising this select group of claims is necessarily federal in
character.” Thus, once “an area of state law has been completely pre-empted, any claim
purportedly based on that pre-empted state law is considered, from its inception, a federal
claim, and therefore arises under federal law.” Williams, 482 U.S. at 393; see also
Franchise Tax Bd. of California v. Construction Laborers Vacation Trust for Southern
California, 463 U.S. 1, 24 (1983) (“[I]f a federal cause of action completely preempts a
state cause of action any complaint that comes within the scope of the federal cause of
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action necessarily ‘arises under’ federal law.”).
Here, Garley appeals the district court’s grant of Sandia’s motion to dismiss on the
ground that Garley’s state law claims have been preempted by § 301 of the LMRA. To be
sure, the “complete pre-emption doctrine to the well-pleaded complaint rule is applied
primarily in cases raising claims pre-empted by § 301 of the LMRA.” Williams, 482 U.S.
at 393. This arises from the fact that § 301 “expresses a federal policy that the
substantive law to apply in § 301 cases ‘is federal law, which the courts must fashion
from the policy of our national labor laws.’” Allis-Chalmers Corp. v. Lueck, 471 U.S.
202, 209 (1985) (quoting Textile Workers v. Lincoln Mills, 353 U.S. 448 (1957)). In
other words, § 301 establishes a “congressional mandate to the federal courts to fashion a
body of federal common law to be used to address disputes arising out of labor contracts.”
Allis-Chalmers, 471 U.S. at 209. Consequently, in Teamsters v. Lucas Flour Co., 369
U.S. 103 (1962), the Court held that § 301 may preempt state law, ruling that “in enacting
§ 301 Congress intended doctrines of federal labor law uniformly to prevail over
inconsistent local rules.” As the Court subsequently explained in Allis-Chalmers, 471
U.S. at 210, Lucas Flour.
held that a suit in state court alleging a violation of a provision of a labor
contract must be brought under § 301 and be resolved by reference to
federal law. A state rule that purports to define the meaning or scope of a
term in a contract suit therefore is preempted by federal labor law.
However, the Supreme Court has made clear that the preemptive effect of § 301 is
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not limited to state suits alleging violations of labor contracts; rather, the “interests in
interpretive uniformity and predictability that require that labor-contract disputes be
resolved by reference to federal law also require that the meaning given a contract phrase
or term be subject to uniform federal interpretation.” Id. at 211. Consequently,
“questions relating to what the parties to a labor agreement agreed, and what legal
consequences were intended to flow from breaches of that agreement, must be resolved
by reference to uniform federal law, whether such questions arise in the context of a suit
for breach of contract or in a suit alleging liability in tort.” Id. (emphasis added).
Nevertheless, the Supreme Court has also made it clear that “not every dispute
concerning employment, or tangentially involving a provision of a collective-bargaining
agreement, is pre-empted by § 301 or other provisions of the federal labor law.” Id.
Consequently, § 301 does not preempt “state rules that proscribe conduct, or establish
rights and obligations, independent of a labor contract.” Id. at 212 (emphasis added).
The test articulated by the Supreme Court in Allis-Chalmers for determining whether a
state law claim is not independent and thus is preempted by § 301 is “whether evaluation
of the tort claim is inextricably intertwined with consideration of the terms of the labor
contract.” Id. at 213 (emphasis added). In other words, “[i]f the state tort law purports to
define the meaning of the contract relationship, that law is pre-empted.” Id. (emphasis
added);
In Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 401 (1988), the
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Supreme Court elaborated on the Allis-Chalmers test for determining whether a state law
claim is preempted by § 301. Lingle presented the question of whether “an employee
covered by a collective bargaining agreement that provides her with a contractual remedy
for discharge without just cause may enforce her state-law remedy for retaliatory
discharge.” The Court held that in this case application of the state tort remedy was not
preempted by § 301 of the LMRA. Id. Looking to the elements of the state tort action,
the Court noted that “to show retaliatory discharge, the plaintiff must set forth sufficient
facts from which it can be inferred that (1) he was discharged or threatened with
discharge and (2) the employer’s motive in discharging or threatening to discharge him
was to deter him from exercising his rights under the Act or to interfere with his exercise
of those rights.” Id. at 407 (quoting Horton v. Miller Chemical Co., 776 F.2d 1351, 1356
(7th Cir. 1985)). The Court thus concluded that proving this tort did not require
examining the substance of the collective bargaining agreement because
[e]ach of these purely factual questions pertains to the conduct of the
employee and the conduct and motivation of the employer. Neither of the
elements requires a court to interpret any term of a collective-bargaining
agreement. To defend against a retaliatory discharge claim, an employer
must show that it had a nonretaliatory reason for the discharge; this purely
factual inquiry likewise does not turn on the meaning of any provision of a
collective-bargaining agreement. Thus, the state-law remedy in this case is
“independent” of the collective-bargaining agreement in the sense of
“independent” that matters for § 301 pre-emption purposes: resolution of
the state-law claim does not require construing the collective-bargaining
agreement.
Id. at 407 (internal citations and footnote omitted).
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The Court went on to rule that even though the factual inquiry involved in
resolving the state law claim and construing the CBA could overlap, that does not
mandate preemption of the state tort action:
We agree with the [lower] court’s explanation that the state-law analysis
might well involve attention to the same factual considerations as the
contractual determinations of whether [the plaintiff] was fired for just
cause. But we disagree with the court’s conclusion that such parallelism
renders the state-law analysis dependent upon the contractual analysis. . . .
[Section] 301 pre-emption merely ensures that federal law will be the basis
for interpreting collective-bargaining agreements, and says nothing about
the substantive rights a State may provide to workers when adjudication of
those rights does not depend upon the interpretation of such agreements. In
other words, even if dispute resolution pursuant to a collective-bargaining
agreement, on the one hand, and state law, on the other, would require
addressing precisely the same set of facts, as long as the state-law claim can
be resolved without interpreting the agreement itself, the claim is
“independent” of the agreement for § 301 pre-emption purposes.
Id. at 409-410 (footnotes omitted) (emphasis added).
With this in mind, we turn now to examine each of Garley’s state law claims to
determine whether their resolution requires a court to interpret the collective bargaining
agreement.
C
Sandia first argues that four of Garley’s claims, those for civil conspiracy,
defamation, breach of contract, and intentional infliction of emotional distress, are
preempted by § 301 because they are based on the investigation and termination of Garley
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and therefore require interpretation of the CBA. Sandia relies principally on two cases
from our precedent to support this proposition – Mock v. T.G. & Y. Stores, Co., 971 F.2d
522 (10th Cir. 1992), and Johnson v. Beatrice Foods Co., 921 F.2d 1015 (10th Cir. 1990).
In Johnson, 921 F.2d at 1015, we considered whether an employee’s state law
claim for intentional infliction of emotion distress against his former employer was
preempted by § 301. Holding that it was preempted, we noted that the plaintiff’s claim
“directly relates to either explicit or implied rights derived from the CBA,” and that his
complaint “pertains to the manner in which discipline was carried out.” Moreover, we
found that the plaintiff “could have used the CBA grievance procedure for any of the
allegations in his complaint since all the allegations involved either a suspension,
discharge, or work-related dispute.” Id. at 1020. Finally, we took note of the fact that
under applicable state law standards for intentional infliction of emotional distress, it
could not be determined whether the defendant’s conduct was sufficiently outrageous
without determining whether the conduct was allowed under the CBA. Id. at 1020-21.
Distinguishing the Supreme Court’s opinion in Lingle which held that a state tort claim
for retaliatory discharge was not preempted, we emphasized the fact that the state law at
issue in Lingle:
create[d] an independent state cause of action because it create[d] an
independent method of review. The facts alleged by the employee in Lingle
fit specifically into the Act’s prohibition of firing an employee for
exercising rights under the Act. Such a statute is not pre-empted by § 301
even though the CBA grievance procedure would review the same facts
under a more general claim of unjust discharge. In contrast, Oklahoma’s
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tort for intentional infliction of emotional distress does not create an
independent method of measuring when an employer’s work-related
conduct is outrageous.
Id. at 1021.
In Mock, we followed Johnson in considering whether § 301 preempted state law
claims brought in federal court by unionized employees against their employer arising
from the employer’s investigation of suspected employee theft and substance abuse. We
held that the plaintiffs’ state law claims, which included, inter alia, intentional infliction
of emotional distress, defamation, and breach of an implied covenant of good faith and
fair dealing, were preempted by § 301, because
[p]laintiffs’ claims all arose out of the manner in which [the defendant]
conducted its investigation of suspected employee misconduct, and the way
in which it terminated certain employees. Under the CBA, [the defendant]
could conduct such an investigation of suspected employee misconduct, and
could terminate any employee for “just cause.” An analysis of whether [the
defendant] acted properly or not will inevitably require an analysis of what
the CBA permitted.
Id. at 530.
Sandia argues that here, as in Johnson and Mock, resolving Garley’s claims for
civil conspiracy, defamation, breach of contract, and intentional infliction of emotional
distress all depend upon interpreting what investigatory and disciplinary actions Sandia
was authorized or required to take under the CBA and therefore are preempted by § 301.
Appellee’s Brief at 12. We agree, but only insofar as this analysis applies to Garley’s
claims of breach of implied contract and defamation. As explained below, we disagree
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with regard to the conspiracy claim and conclude that that claim is not preempted.
Concerning the intentional infliction of emotional distress claim, we conclude that
Garley’s claim is partially preempted.
We turn first to the breach of implied contract claim. We conclude it is preempted
by § 301. To the extent that the claim is based on an alleged breach of the CBA, the
claim is clearly preempted. Mock, 971 F.2d at 529; Johnson, 921 F.2d at 1018-19.
Garley, however, contends that his claim is not founded on the CBA but rather is based
exclusively on implied contracts created by Sandia’s Personnel Policy, Code of Ethics,
and Director’s Memo. Consequently, Garley argues that the CBA is irrelevant to his
claim and that his First Amended Complaint deleted all references to it. Thus, Garley
contends that a court has no need to interpret the CBA.
We disagree. To be sure, the Supreme Court has ruled that “a plaintiff covered by
a collective-bargaining agreement is permitted to assert legal rights independent of that
agreement, including state-law contract rights, so long as the contract relied upon is not a
collective-bargaining agreement.” Williams, 482 U.S. at 396. However, we do not
believe this to be the case here. Despite Garley’s emphatic protestations to the contrary,
we are persuaded that the documents he cites were intended to be read in harmony with
the CBA.3 Sandia’s Personnel Policy, under the heading “Disciplinary Action,”
Although we have been provided only selected excerpts of these documents we
3
nonetheless believe that the materials in our possession are adequate for us to arrive at this
determination.
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specifically refers the reader to a separate section (not included in this record) for rules
governing the discipline of represented employees. See Appendix at 168 (“See Section
6.7 for cases involving represented employees.”). Likewise, the Director’s Memo also
indirectly references the CBA by stating that when formal actions become necessary
because of poor performance, “managers should invite the employee to obtain union
representation if the employee is represented.” Id. at 173 (emphasis added). These
provisions lead us to conclude that the documents upon which Garley relies are
“inextricably intertwined with consideration of the terms of the labor contract.” Allis-
Chalmers, 471 U.S. at 213. Consequently, they are preempted by § 301. See Cisneros v.
ABC Rail Corp., 217 F.3d 1299, 1303 (10th Cir. 2000); Aguilera v. Pirelli Armstrong
Tire Corp., 223 F.3d 1010, 1014-1016 (9th Cir. 2000); Audette v. International
Longshoremen’s & Warehousemen’s Union, 195 F.3d 1107, 1112 (9th Cir. 1999);
Beidleman v. The Stroh Brewery Co., 182 F.3d 225, 229-31 (3d Cir. 1999); Henderson v.
Merck & Co., Inc., 998 F. Supp. 532 (E.D.Pa. 1998).
Regarding Garley’s defamation claim, we also conclude that it is preempted by §
301. As we ruled in Mock, when confronted with a § 301 preemption challenge to a state
defamation action, “federal courts look beyond the allegations of the complaint . . . to
determine whether the wrong complained of actually arises in some manner from the
breach of the defendants’ obligations under a collective bargaining agreement.” Mock,
971 F.2d at 530 (quoting United Assoc. of Journeymen & Apprentices of the Plumbing &
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Pipefitting Industry v. Bechtel Power Corp., 834 F.2d 887-88 (10th Cir. 1987), cert.
denied, 486 U.S. 1055 (1988)). Here, Garley bases his defamation claim on the theory
that his termination for timecard fraud publically branded him as dishonest. We believe
that this is preempted by § 301. In Mock, after noting that the plaintiff’s defamation
claim arose out of “the manner” in which the defendant “conducted its investigation of
suspected employee misconduct, and the way in which it terminated certain employees,”
we held that determining whether the defendant “acted properly or not will inevitably
require an analysis of what the CBA permitted.” Id. at 530. Likewise, here, in order to
determine whether Garley was defamed by Sandia’s actions, the court would inevitably
have to examine Sandia’s rights and obligations under the CBA to decide whether
Sandia’s actions were authorized; § 301, however, preempts state causes of action from
permitting this sort of inquiry. Consequently, we hold the defamation claim to be
preempted.
Turning next to the civil conspiracy claim, we hold that the district court erred in
finding it preempted by § 301. Sandia’s contention that Johnson and Mock control our
decision regarding this claim fails to take account of our subsequent opinion in
Albertson’s, Inc. v. Carrigan, 982 F.2d 1478 (10th Cir. 1993), which in distinguishing and
limiting both cases held that a claim for civil conspiracy was not preempted. In
Albertson’s, a union employee covered by a collective bargaining agreement filed a claim
in Colorado state court alleging that her employer “unlawfully suspended [her] from
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employment and conspired to accuse her falsely of shoplifting from her employer.” Id. at
1479.4 The defendants then sought to remove the action to federal court on the ground
that § 301 of the LMRA preempted her state law claims, and moved to dismiss, which the
court treated as a motion for summary judgment. Id. Although the district court
dismissed the suspension claim on preemption grounds, it nonetheless ruled that “the
conspiracy claim was not preempted because it did not require interpretation of the
collective bargaining agreement.” Id. (emphasis added). Thus, the district court
remanded the conspiracy claim back to state court. Id. The defendants then sought review
of the remand by a petition for a writ of mandamus, arguing that the plaintiff’s claim was
completely preempted and thus should have been dismissed without remand to the state
court.
In determining whether the alleged conspiracy arose from a breach of obligations
under the collective bargaining agreement, we distinguished our holding in Johnson by
noting that there “the acts that formed the basis of the outrageous conduct claim were
alleged acts of harassment on the job by Johnson’s supervisor, many of which were in the
form of grievances filed against Johnson invoking procedures set out in the CBA.” Id. at
1482. We also explained that in Johnson “it could not be determined whether the conduct
The original complaint stated a single cause of action for “extreme and outrageous
4
conduct,” inflicting upon the plaintiff “severe emotional distress.” The district court, however,
construed this as actually consisting of two distinct claims: “one based on suspension and one
based on conspiracy to charge [plaintiff] with shoplifting.” Albertson’s, 982 F.2d at 1479.
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was outrageous without determining whether the conduct was allowed under the CBA.”
Id. (internal quotations omitted). Our Albertson’s opinion then distinguished Mock by
noting that since in that case “‘all of the state law claims ‘arose out of conduct alleged to
have occurred during the course of an investigation by [the employer], and would
‘inevitably require an analysis of what the CBA permitted,’” preemption was required.
That, however, was not the case in Albertson’s. Thus, Albertson’s held that:
In the case before us, there is no doubt that many, if not all, of the same
factual issues and disputes will have to be resolved in arbitrating the
discharge under the CBA as in determining the conspiracy or outrageous
conduct claim. But, it is also true that if plaintiffs can show defendants
conspired to have Mrs. Aguirre arrested by fabricating her theft of groceries
from her employer, proving their outrageous conduct need not require
interpretation of or reference to the CBA.
Id. at 1482.
We based this conclusion on the fact that if we
were to hold § 301 preempts plaintiff’s state law claim that defendants
conspired to set her up for arrest and imprisonment just because the same
factual disputes would be present in arbitration under the CBA, it would
seem to be virtually impossible for a plaintiff to set out a state claim when
the complaint also states a federal § 301 claim or a grievance procedure is
commenced under the CBA. We cannot reconcile such a conclusion with
Lingle.
Id. at 1482-83.
In the instant case, as in Albertson’s, the plaintiff’s civil conspiracy claim is
predicated on an allegation that management sought to frame the plaintiff for misconduct.
Likewise here, as in Albertson’s, though addressing the conspiracy claim would involve
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many of the same factual inquiries as assessing the plaintiff’s discharge under the CBA,
because the focus of the claim is on the defendant’s alleged conspiring against the
plaintiff (an inquiry analytically distinct from whether its actions were permitted by the
CBA), we conclude that it is not preempted by § 301. Lingle, 486 U.S. at 409-410
(holding that even if construing the CBA and the state law “require addressing precisely
the same set of facts, as long as the state-law claim can be resolved without interpreting
the agreement itself, the claim is ‘independent’ of the agreement for § 301 pre-emption
purposes”).
Regarding Garley’s claims for breach of the duty of good faith and fair dealing,
and for retaliation, Sandia argues that they are preempted by § 301 because resolving
those claims would require review of the arbitrator’s award and thus the terms of the
CBA. We turn first to the claim of breach of the duty of good faith and fair dealing.
That claim is easily disposed of for Garley bases this claim on allegations that Sandia did
not fully implement the arbitrator’s order that he be reinstated with full back pay,
seniority, and benefits. Consequently, this issue can only be resolved by construing the
arbitrator’s ruling. Since that ruling was made pursuant to the CBA, it is preempted by §
301 as “inextricably intertwined with consideration of the terms of the labor contract.”
Allis-Chalmers, 471 U.S. at 213.
Turning to the retaliation claim, in examining whether that claim is preempted, we
must draw an important distinction between Sandia’s contractual rights to take the actions
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it did and the motivations behind them. As we explained in Jarvis v. Nobel/Sysco Food
Services Co., 985 F.2d 1419, 1427 (10th Cir. 1993), in holding that a retaliatory discharge
claim was not preempted, “[s]o long as the state law cause of action is concerned not with
the employer’s contractual rights to discharge the employee, but rather with its motives in
exercising that right, the CBA is not relevant and preemption does not apply.” The
Supreme Court itself recognized in Lingle that litigating a state law retaliatory discharge
claim presents purely factual questions pertaining to the “conduct of the employee and the
conduct and motivation of the employer,” and that neither required “a court to interpret
any term of a collective-bargaining agreement.” Lingle, 486 U.S. at 407.
Consequently, “[e]ven if the employee violated the employer's rules, giving the
employer ‘just cause’ to discharge him, the question is whether the employer's motivation
for the discharge was the rule violation or retaliation for an activity protected by the
retaliatory discharge law.” Davies v. American Airlines, Inc., 971 F.2d 463, 466 (10th
Cir. 1992) (citing Marshall v. TRW, Inc., Reda Pump Division, 900 F.2d 1517 (10th Cir.
1990)) (applying LMRA preemption analysis to hold that the Railway Labor Act does not
preempt state law tort for retaliatory discharge); Cramer v. Consolidated Freightways,
Inc., 209 F.3d 1122, 1135 (9th Cir. 2000) (holding that retaliatory discharge claim is not
preempted where it rests on the defendant’s motivations for firing the plaintiff); Owen v.
Carpenters’ District Council, 161 F.3d 767, 776 (4th Cir. 1998) (holding a state law claim
for retaliatory discharge not preempted where the claim “primarily concerns the conduct
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of the employee and the conduct and motivation of the employer”); Martin Marietta Corp.
v. Maryland Comm’n on Human Relations, 38 F.3d 1392, 1402 (4th Cir. 1994).
Although these cases involved retaliatory discharge, and here Garley alleges the
retaliation came in the form of withholding back pay, reassignment to a different
workstation, and loss of a security clearance, the principle remains the same and
preemption is not mandated. See White v. General Electric Co., 1997 W.L. 437092 (6th
Cir. Aug. 4, 1997) (holding that retaliation claim for refusing to correct personnel records
and withholding back pay is not preempted by § 301).5
We turn now to the intentional infliction of emotional distress claim. Garley
5
We are not persuaded by Sandia’s reliance on the unpublished district court decision in
White v. General Electric Co., 157 L.R.R.M. (BNA) 2113, 2115 (W.D.Ky. 1995), where,
according to Sandia, the district court ruled that the plaintiff’s claim that the defendant did not
fully comply with an arbitrator’s award was preempted by § 301. See Appellee’s Brief at 18.
Our research reveals that the Sixth Circuit, in an unpublished opinion affirming the district court
decision cited by Sandia, demonstrates that the plaintiff’s retaliation claim was not preempted:
[T]he district court correctly held that § 301 of the LMRA does not preempt
White’s retaliation claim. A state law claim is preempted only if the action
requires interpretation of a collective bargaining agreement. Here, the emphasis
of White’s claim of retaliation is that GE refused to correct her personnel record
to reflect her appropriate seniority for at lease fifteen years. She further claimed
that once her seniority date was restored and her backpay calculated, GE
continued to retaliate against her by waiting five months to pay her back wages
and then refusing to explain how it calculated that amount. The inquiry into GE’s
motivation does not require an interpretation of the terms under the collective
bargaining agreement. Because White’s retaliation claim does not require “an
interpretation of collective bargaining agreement terms,” and her claim is
“created” by state law, her claim of retaliation . . . is not preempted by § 301 of
the LMRA.
White v. General Electric Co., 1997 W.L. 437092, at *2 (6th Cir. Aug. 4, 1997) (internal
citations omitted) (emphasis added).
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presents two factual predicates for this claim: (1) Sandia’s actions leading to his
dismissal; and (2) Sandia’s “continued retaliatory acts.” App. at 64. To the extent that
Garley bases his claim on Sandia’s conduct during the investigation, we affirm the district
court’s ruling that this claim is preempted. Determining whether Sandia’s conduct during
its investigation of Garley was “outrageous,” an element of the tort, requires construction
of Sandia’s rights and obligations under the CBA as that is the reference point against
which Sandia’s action must be scrutinized.
This line of inquiry, however, is preempted by § 301. Carter v. Ford Motor Co.,
121 F.3d 1146, 1149 (8th Cir. 1997) (holding that state tort action for intentional
infliction of emotional distress is preempted where a determination on the merits “would
require the court to determine whether [plaintiff’s] discharge was warranted under the
terms of the collective bargaining agreement”); Flibotte v. Pennsylvania Truck Lines,
Inc., 131 F.3d 21, 27 (1st Cir. 1997) (“[The defendant’s] rights and obligations under the
collective bargaining agreement are obviously central not only to an inquiry into [its]
intentions, but also to an inquiry into whether [it] conducted itself in a sufficiently
outrageous manner to give rise to liability under state tort law.”); Douglas v. American
Information Technologies Corp., 877 F.2d 565, 573 (7th Cir. 1989) (“Because
[plaintiff’s] intentional infliction of emotional distress claim consists of allegedly
wrongful acts directly related to the terms and conditions of her employment, resolution
of her claim will be substantially dependent on an analysis of the terms of the collective
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bargaining agreement under which she is employed.”); Scott v. Machinists Automotive
Trades Dist. Lodge No. 190 of Northern California, 827 F.2d 589, 594 (9th Cir. 1987)
(“[S]tate tort claims for intentional infliction of emotional distress are preempted where
they arise out of the employee’s discharge or the conduct of the defendants in the
investigatory proceedings leading up to the discharge.”). Accordingly, we hold that § 301
forecloses Garley from successfully asserting an intentional infliction of emotional
distress claim based on Sandia’s disciplinary procedures.
The fact that Garley’s claim for intentional infliction of emotional distress, to the
extent that it is based on Sandia’s actions leading to his dismissal, is preempted by § 301,
does not require us to arrive at the same conclusion with respect to Garley’s second
factual predicate for his claim -- Sandia’s alleged retaliatory actions taken following the
arbitrator’s ruling. We are not required to find preemption in “every conceivable claim
for intentional infliction of emotional distress which arises from conduct in the work
place.” Jackson v. Kimel, 992 F.2d 1318, 1326 (4th Cir. 1993). For the reasons we set
out above when discussing Garley’s claim for retaliation, we find that to the extent
Garley’s claim of intentional infliction of emotional distress is based on Sandia’s
retaliatory acts, we conclude that the claim is not preempted and reverse. As with
Garley’s independent cause of action for retaliation, determining whether Sandia’s
allegedly retaliatory acts are “outrageous” would not require resort to the CBA.
Consequently, to the extent that Garley’s cause of action for intentional infliction of
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emotional distress is based on Sandia’s conduct after the completion of the binding
arbitration, his claim is not preempted by § 301.
IV
We hold that Garley’s claims of breach of implied contract, breach of the duty of
good faith and fair dealing, and of defamation are preempted by § 301 of the LMRA.
Garley’s claims for alleged civil conspiracy and retaliation are not so preempted.
Garley’s claim of intentional infliction of emotional distress is preempted only to the
extent that the claim is based upon Sandia’s actions leading to the termination of his
employment, but the emotional distress claim is not preempted to the extent that it is
based upon alleged retaliatory actions.
Accordingly, we AFFIRM the dismissal of the claims of breach of implied
contract, of breach of the duty of good faith and fair dealing, and of defamation. We
leave it to the discretion of the district court to decide whether to permit amendment of
these preempted state law claims to allege claims under § 301. We REVERSE the
dismissal of the claims of alleged civil conspiracy and retaliation, and the claim of alleged
intentional infliction of emotional distress insofar as it is based on Sandia’s alleged
retaliatory actions. As to the claims the dismissal of which we hold to be in error, those
claims are remanded to the district court for further proceedings pursuant to 28 U.S.C. §
1367.
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IT IS SO ORDERED.
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