# FILED
February 18, 1999 Cecil Crowson, Jr. Appellate Court Cle rk 

### IN THE COURT OF APPEA LS OF TENNESSEE

AT NASHVILLE

SCOTT BALDWIN, J. L. S MITH, and ) KEVIN T. BROWN, indiv idually and ) on behalf of a class of individuals ) similarly situated, ) ) Plaintiffs/Appellants, ) Appeal No. ) 01-A-01-9804-CV-00195 VS. ) ) Davidson Circuit PIRELLI ARMSTRONG TIRE ) No. 95C-3232 CORPORATION, UNITED RUBBER, ) CORK, LINOLEUM AND PLA STIC ) WORKERS OF AMERICA, AND ) URW LOCAL UNION 670, ) ) Defendants/Appellees. )
APPEALED FROM THE CIRCUIT COURT OF DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE THE HONORABLE THOMAS W. BROTHERS, JUDGE
FOR APPELLANTS: FOR APPELLEE PIRELLI ARMSTRONG TIRE COR P.: Jeffrey A. Greene John W. Barringer, Jr. Charles Hampton White Goodlettsville, Tennessee Richard L. Colbert Nashville, Tennessee Robert L. Delaney Nashville, Tennessee FOR APPELLEE UNITED RUBBER, CORK, LINOLEUM and PLASTIC WORKERS OF AMERICA: Charles R. Armstrong Akron, Ohio 44320 FOR APPELLEE URW LOCAL UNION 670: George E. Barrett Phillip A. Purcell Nashville, Tennessee
REVERSED AND REMAND ED

BEN H. CANTRELL, PRESIDING JUDGE, M.S.- 2 - 

## O P I N I O N

When replacement workers w er e fi red to make room for the r eturning union employeesat the end of a strike, the replacement workers brought suit against the employer for

bre ach of contract and retaliat ory discharge, and against the local and international unions for intentional interference w ith their contract. The

trial court granted the employe r’s mot ion to dismiss the breach of contract count, because it believed the individual contracts had been subsu med into the collective bargai ning agreement, but it overruled the moti on to dismiss the retali atory discharge count. The court granted the unions’ motion to dismiss, because it bel ieved the complaint did not state a cause of action for intenti onal interference with an em ployment at will contract. We reverse the judgment of the trial court.

I. a. The Facts

Since this case was decided on a m otion to d ismiss w e take the facts from a li beral cons truction of the complaint, Huckeby v. Spangler , 521 S.W.2d 568 (Tenn. 1975), and we assume the facts in the complaint are true, Cornpropst v. Sloan , 528 S.W.2d 188 (Tenn. 1975).

The complaint alleges that Pirelli Armstro ng Tire Corporation (Pirelli) operated a manufacturing plant in Madison, Tennessee where substantially all of the hourly workers were repres ented bythe United Rubber, Cork, Linoleum and Plastic Workers Union. The Pirelli workers were members of Local 670. In July of 1994, the worke rs went out on strike. Pir elli hired some replac ement workers, andafte r declaring that the parties had “bargai ned to an impasse,” the company terminated the strikers and began to hire “permanent” replacement workers. All the repl acement- 3 -

workers were hired with an expr ess or implied promi se th a t they would not be terminated solely to make room for the returning strikers.

In March of 1995, the unio n and th e company entered into a new collective bargaining agreement (CBA) . The c omp any began to rehire the union members and, under pressure from the local and the nati onal unions, to fire the replacement

workers for pretextual

reasons. Ultimately all of the replacement workers were fired.

b. The Procedural Hist ory

The named plaintiffs brought an a ction against the compan y for a breach of contract and for a retali atory discharge. The com plaint sought to recover tr ebl e damages from the unions for an intentional interfer ence with the plaintiffs’

contract of employment with the compa ny. See Tenn. Code Ann. § 42-50-109

The defendants jointly removed the case to thefederal district court, but that court remanded the counts cont aining the causes of action referred to above. The defendants then filed motions to dismiss under Rule 12.02(6), Tenn. R. Civ. Proc. The trial judge overruled the company’s motion to dismiss the r etaliatory discharge claim but granted the motions as to the other counts.

II. Retaliatory Discharge

We will deal first wi

th the company’s contention tha t the trial judge erred in failing to dismiss the claim for retaliator y discharge. The

elements of such a cause of action are fairly simple: “An employment at will relationship; a clear declaration of public policy which imposes duties on the employee or employer; and dischargeof the- 4 -

employee for refusing to violate those duties.” Reynolds v. Ozark Motor Lines, Inc. , 887 S.W.2d 82 2 at 825 (Tenn. 1994). The Reynolds court cited examples of a retaliatory discharge from other jurisdictions where emplo yee s had been fired for: refusing to commit perjury; r efusing to ignore a

lawful subpoena; refusing to ignore a subpoena to jury duty; refusing to falsify rec ords in product labeling; and refusing to falsely certify that products had bee n tested when they had not. Id. at 824, citing Chism v. Mid-South Milli

ng Co. , 762 S.W.2d 552 at 556 (Tenn. 1988) . Our own cases ha ve re cognized a case of retaliator y discharge where an empl oyee has been fired for making a workers’ co mpensation claim, Clanton v. Cain Sloan , 677 S.W.2d 441 (Tenn. 1984), and the legislature has decreed that “no employee shall be discharged
or terminated solely for

refusing to participate i n, or for refusing to rem ain silent about, illegal activities.”

Tenn. Code Ann. § 50-1-304.
In this case the complaint alleges the following facts: As of the filing of

this complaint, on informati on and belief, none of the permanent replacement workers hired during the str ike for hourly- rate positions remain em ployed by PIRELLI. On information and belief, w hen negotiating the newcollective bargaining agr eement ratified on March 27, 1995, representatives of PIRE LLI, on the one hand, and t he URW and URW LOCAL 670, on the other hand, discussed the issue of whether or not the jobs previously vacated by striking URW m embers and filled by the permanentreplacement workers could be made available to URW members foll owing the end of the strike. In the negotiations that resulted in the new collective barg aini ng agreement ratified on Mar ch 27, 1995, PIRELLI and the URW a nd URW LOCAL 670 agreed that all striking members of the URW would berehired by PIRELLI, despite and with full knowledge of the fact that PIRE LLI h ad already hired the permanent replacement wor kers to fill the positions previously occupi ed b y striking members of the URW and URW LOCAL 670. On information and belief, aft er the en d of th e strike and through the termination of th e permanent workers, the URW and URW LOCAL 670 did not permit anyperson they kne w to ha ve been a permanent replacement

worker hired by

PIRELLI during the strike to- 5 - join the URW or URW LOCAL 670 in order to remain employed at PIRELLI followi ng the end of the strike.

In addition, in count one the com plaint makes the following allegations: Tennessee is a “right to work” state, in which it is contrary to public policy for an e m ployer either to refuse t o hire or to discharge an em ployee simply because the employee is not a member of a labor union. The “right to work” in Tennessee without being compelled to belong to a labor union i s a clear public policy evidenced by the unambiguous statutory provision of T.C.A. § 50-1-201 (1991). PIRELLI’s termination of the permanent replacement

workers who are members oft he Plaintiff Class violated the “right to w ork” pu blic policy of Tennessee and was for this reason wrongful. The members of t he Plaintiff Class have s uffered damage as a result of their termination by PIRELLI. The damages suffered by t he m embers of the Plaintiff Class include but are not li mited to lost wages and benefits, consequentia l damages and emotional distress. In terminating the members of the Plaintiff Class, PIRELLI acted intentionally, fraudulently, maliciously and/or reckl essly because PIRELLI knew that it was a violation of

both Tennessee and federal law to terminate employeesbased on the fact the employe es were not union members, but

nevertheless did so alleging grounds for termination which were known to be false in an effort to cover up the real (but illegal) reason for termination. As a result, PIRELLI is liable for punitive damages.

As we read the complaint it does not state a claim for a retaliatory discharge. It does not allege that the replacement

workers were fired for refusing to join the union. The complaint all eges that the union and the company agr eed that the striking employees would be rehir ed. A necessary consequence of that agr e ement
was that the replacement worke rs had to go, but the connection be tween that fact and union membership is not s tated in the complaint.- 6 - We take no position on whether the right to work law, Tenn. Code Ann. § 50-1-201, creates a priva te right of action for its violat ion. The appellants state emphatically that they are not asserting a cause of action for violating the statute, but theyrely on the statute as a cl ear statement of public policy on which to base a claim of retaliatory discharg e.

III. Breach of Contract

We are of the opinion that the com plaint states a caus e of ac tion for breach of contract. A fair reading of thecomplaint reveals that the plaintiffs alleged (1) that they were hired with an express or implied promise that they would not be fired in order to make room f or the returning striker

s (see paragraphs 41(a) and 54 of the complaint), and (2) t hat the company breached that pro mise when it settled the strike with the union. The company’s promises were more than a vague promise o f “permanen t” emp loyment which creates no more than an employment at w ill. See Savage v. Spur Distributi ng Company

, 228 S.W.2d 122 (Tenn. App. 1950).

The trial judge found, however,that the plaintiffs’ contr act with the company

was subsumed into the coll ective b arg aining agreement subsequently entered into by the company and the union. From a reading of the cases we find that the courts use that expressio n to indicatethat the individual contrac ts were displaced bythe s ubseque nt collective bargaining agreement (CBA) or that the dispute was preempted by federal law.

a. The Displacement Issue- 7 - The only authority cited by either t he co mpany or the union that the individual contracts with the repl acement workers were di splaced by theCBAis Beals
v. Kiewit Pacific Co. , 114 F.3d 892 (9th Cir. 1997). Beals is a preemption case in which the Ninth Circuit held that an employee could not m aintain a st ate action seeking to enforce an employment contract entered into when th e employer and the union were operating under an exis ting CBA. To the extent that the separate contract
was inconsistent with the CBA, “the CBA controls and any claims seeking to enforce the terms of the [separate co ntract] are preempted. 114 F .3d at 894.

The Beals

court distinguished Caterpillar, Inc. v. Williams , 482 U.S. 386 (1987), in which the company all eged ly entered into agreements with some of its employeeswhile they were in managerial positions. When the employ ees were later downgraded to hourl y positions, the company ar gued that “their individual em ploymen t agreementswere subsumed into, or el imin ated by, the collective bar gaining agreement.” The court rej ected this argument saying:

Thus, individual employment contracts are not inevitably superseded by any subsequent collectiv e agreement covering an individual employee, and claims base d upon them may

arise under state law. C aterpillar’s basic er

ror is i ts failure to recognize that a plaintiff covered by a collective-bargaini ng a greement is permitted to assert legal rights independent of that agreem ent, inclu ding state-l aw contract rights, so long a s the contract relied upon is not a collective- bargaining agreement. 482 U.S. at 396.

Beals distinguished Ca te rpillar because it involved “an i ndividual employment

contract negotiated for a posi tion not covered by the CBA, at a tim e when the employee was not covered by the CBA. 114 F.3 d at 894. Tha t is the situation involved in this c ase. The appellants negotiated a contract at a time when neither theynor the company were under a CBA. Therefore, we think the contracts they negotiated were not subsumed i nto the subsequent CBA.- 8 - b. Preemption

For most of the same reasons appeari ng in the preceding section we hold that the a ppellants’ independent contract claims are not preempte d by the National Labor Relations Act (NLRA) nor by Sectio n 301 of the Labor Managment RelationsAct (LMRA). Section 301 pr eempts state law

claims that are based directly
on rights created by a CBA or claims that are substanti ally de pend ent on an interpretation of a CBA. Caterpillar, Inc. v. Williams , 482 U.S. 386(1987). In Belknap, Inc. v. Hale , 462 U.S. 491, 498 (19 83), the Supreme Court descri bed two doctrines that determine whether state causes of action are preempt ed by the NLRA: Under the firs t, set out in San Diego Building Trades Council v Garmon , 359 US 236, 3 L Ed 2d 775, 79 S Ct 773 (1959), state regulations and causes of action are presumptively pre-empted if they concern conduct that is actually or arguably either prohi bited or protectedby the Act. Id., at 245, 3 L Ed 2d 775 , 79 S C t 773. The state regulation or

cause or action may, however, be sustained if the behavior to be

regu lated is behavior that is of only peripheral concern tothe federal law or touches interests deeply rooted in lo cal fe eling and responsibility . Id., at 243-244, 3 L Ed 2d 775, 79 S Ct 773; Sears, Roebuck & Co. v Carpenters , 436 US 180, 200, 56 L Ed 2d 20 9, 98 S Ct 1 745 (1978); Farmer v Carpenters , 430 US 290, 296-297, 51 L Ed 2d 338, 97 S Ct 1056 (1977). In such cases, the State’s interest in c ontrolling or remedyin g the effects of the conduct is balanc ed against both the interference with the National L a bor Relations Board’s ability t o adju dicate controversies com mitted to it by the Act, Farmer

v Carpenters , supra, at 297, 51 L Ed 2d 338, 97 S Ct 1056; Sears Roebuck & Co. v Carpe nters , 436 US, at 200, 56 L Ed 2d 209, 98 S Ct 1745, and the risk that the State will sanction conduct that the Act protects. Id., at 205, 56 L Ed 2d 209, 98 S Ct 1745 . The second pre-emption do c trine, set out in Machinists v Wisconsin Employment

Relations Comm’n , 427 US 132, 49 L Ed 2d 396, 96 S Ct 2548 (1976), proscribes state regulation and state-law causes of action concerning conduct that Congress intended to be unregulated, id., at 140, 49 L Ed 2d 396, 96 S Ct 2548, conduct that w as to remain a part of the self-help remedies l eft to the combatants in labor disputes, id., at 147-148, 49 L E d 2d 396, 96 S Ct 2548.

In Belknap

the court decided that facts remarkably like the facts in this case did not bring the dispute within either of the NLRA preemption doctrines.- 9 - We think C

ate rpillar answers the question of whether this controversy is preempted by Secti on 301 of the LMRA. Consider ing only the allegations in the amended complaint we see no allegations that the dispute i nvolves rights created by
a CBA, and without the CBA even being in this record we c annot s ee how th e appellants’ claims inv

olve an interpretation of the CBA.

IV. Interference with Empl oyment Contract

The trial judge dismiss ed the tortious interf erence count because it believed the appellants’ contr act had been subsumed within the CBA negotiated by the union. On appeal the only argument m ade by the local union is that one cannot interfere with a contract to which it is a par ty. (Citing Forrester v. Stockstill, 869 S.W.2d 328 (Tenn. 1994).

As we have pointed out, however, this action is not based on the CBA negotiated by Local 670. And the intentional inter ference with at-will

employment by a third party without pri vilege or justificati on is actionable. Forrester at 330; Ladd v. Roane Hosiery, Inc. , 556 S.W.2d 758 (Tenn. 1977); Dukes v. Brotherhood of Painters , 235 S.W.2d 7 (Tenn. 1950). The allegation s in the comp laint are sufficient to s tate a cause of action against the l ocal union.

Although the national union argues on appeal that it is a separate entity from the local union, and that there ar e no specific allegations against it, the complaint does specifically refer to the “URW and URW Local 670". In paragraph 61, the complaint

alleges that “The URW and URW Local 670 intended to cause Pirelli to terminate the employment of all the permanent replacement workers.” The complaint goes on to allege that both defendants cr eated pressure on Pirelli to terminateth e- 10 -

appellants (paragraph 65) and that in i nducing Pirelli to term inate the appellants, both defendants acted with malice and fraudulent intent (parag raph 70).

Whether the appellantscan prove any of their all egations remains to be seen, but at this st age of the li tigation, the complaint sta tes a cause of action for intentional interference with contract against both union d efendants.

The judgment of the court below is reversed as indicated herein and the cause is remanded to the Circuit Court of Davidson County for further proceedings. Tax the costs on appeal one-third to the appellants and two-th irds to the appellees.

_ ______ _____________________ _ BEN H. CANTRELL, PRESIDING JUDGE, M.S.
CONCUR:

_____________________________ WILLIAM C. KOCH, JR.,JUDGE

_____________________________ WILLIAM B. CAIN, JUDG E