UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JANICE STEINBACH,

Plaintiff-Appellant,

v.

DILLON COMPANIES, INC.,

a Kansas corporation, doing

business as King Soopers;

LYNDA PRICKETT, individually,

Defendants-Appellees.

No. 99-1557

ORDER ON PETITION FOR REHEARING

Filed May 30, 2001

Before BRISCOE , McKAY , and BALDOCK , Circuit Judges.

This matter is before the court on appellant’s petition for panel rehearing of

our decision filed March 8, 2001. The petition for rehearing is granted. The

court’s opinion is withdrawn and the judgment is vacated. A revised opinion is

attached to this order.

Entered for the Court

Patrick Fisher, Clerk of Court

By:

Keith Nelson

Deputy Clerk
F I L E D

United States Court of Appeals

Tenth Circuit

MAY 30 2001

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JANICE STEINBACH,

Plaintiff-Appellant,

v.

DILLON COMPANIES, INC.,

a Kansas corporation, doing

business as King Soopers;

LYNDA PRICKETT, individually,

Defendants-Appellees.

No. 99-1557

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

(D.C. No. 99-M-1879)

Submitted on the briefs:

Hugh S. Pixler of Gregson & Pixler, P.C., Denver, Colorado, for

Plaintiff-Appellant.

Emily Keimig and William A. Wright of Sherman & Howard L.L.C.,

Denver, Colorado, and Raymond M. Deeny of Sherman & Howard L.L.C.,

Colorado Springs, Colorado, for Defendants-Appellees.

Before BRISCOE , McKAY , and BALDOCK , Circuit Judges.

BRISCOE , Circuit Judge.
1 After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination

of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

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Plaintiff Janice Steinbach appeals the district court’s dismissal of her state

tort claims of tortious interference with contract and intentional infliction of

emotional distress (outrageous conduct), as preempted by § 301 of the Labor

Management Relations Act of 1947, 29 U.S.C. § 185. She also argues that

because the district court held the claims preempted, it lacked jurisdiction to find

that she failed to state a claim for outrageous conduct. We affirm. 1

Plaintiff is a former employee of King Soopers and member of the United

Food and Commercial Workers, Local No. 7. She alleges that while she was on

a properly scheduled vacation, the store manager, threatening termination, made

her return to work early and then initiated disciplinary proceedings for her

allegedly unexcused absences, knowing that plaintiff had a history of mental

instability. Plaintiff alleges that these acts were the result of personal hostility,

that the store manager intended to cause her emotional harm, and that the events

caused plaintiff to attempt suicide and to experience panic attacks. She also

claims that the store manager took these actions to interfere with her contract with

King Soopers. The district court held the claims preempted by § 301 because they
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necessarily required consideration of the parties’ collective bargaining agreement.

We review the district court’s preemption rulings de novo. Fry v. Airline

Pilots Ass’n, Int’l , 88 F.3d 831, 835 (10th Cir. 1996). The ruling that plaintiff

failed to state a claim for outrageous conduct is also reviewed de novo. Proctor &

Gamble Co. v. Haugen , 222 F.3d 1262, 1278 (10th Cir. 2000) (reviewing de novo

dismissal of state tort claims for failure to state a claim). 

A state tort claim is preempted by § 301 if its resolution “depends upon the

meaning of a collective-bargaining agreement.” Lingle v. Norge Div. of Magic

Chef, Inc , 486 U.S. 399, 405-06 (1988). In Lingle , the Supreme Court held that

a retaliatory discharge claim was not preempted because it involved purely factual

questions whether the plaintiff was discharged and whether the employer’s

motivation was to deter or interfere with the employee’s exercise of worker’s

compensation rights. Id. at 407. As the claim could be resolved without

reference to the collective bargaining agreement, it was not preempted. 

Plaintiff argues that under Lingle neither of her tort claims are preempted . 

We first consider her tortious interference with contract claim. Plaintiff seems to

argue that she had two employment contracts with King Soopers: the collective

bargaining agreement, and an at-will agreement that she would work and her

employer would pay her until one of them terminated the relationship. See

Appellant’s Br. at 22. She argues that because it was this at-will contract with
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which the store manager interfered, there is no need to refer to the collective

bargaining agreement and thus her claim is not preempted. Plaintiff has not

shown that the parties intended to enter into an agreement separate from the

collective bargaining agreement, however. Indeed, the creation of such an outside

employment contract is contrary to the concept of collective bargaining, which is

intended to forge an exclusive contract controlling all aspects of the

employer-employee relationship. See J.I. Case Co. v. NLRB , 321 U.S. 332, 338

(1944) (“The very purpose of providing by statute for the collective agreement is

to supersede the terms of separate agreements of employees with terms which

reflect the strength and bargaining power and serve the welfare of the group.”). 

As the collective bargaining agreement creates and controls the employment

relationship between King Soopers and plaintiff in this case, it is the only contract

upon which her interference claim can be based.

Plaintiff seems to allege two types of tortious interference with contract,

interference with King Soopers’ performance, as described in the Restatement

(Second) of Torts, § 766 (1979), and interference with plaintiff’s own

performance, as described in § 766A of the Restatement. Colorado has

recognized both forms of this tort. See Westfield Dev’t Co. v. Rifle Inv. Assoc. ,

786 P.2d 1112, 1117 (Colo. 1990). 

To show tortious interference under § 766, plaintiff must prove that a
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contract existed between her and King Soopers, that the store manager knew of

the contract, that the manager intentionally and improperly caused King Soopers

not to perform the contract, and that damage resulted. Trimble v. City & County

of Denver , 697 P.2d 716, 726 (Colo. 1985). Whether King Soopers failed to

perform the contract requires consideration of the collective bargaining

agreement. See Fry, 88 F.3d at 839 (holding interference claim preempted

because it required resort to the collective bargaining agreement to determine

whether it was breached). 

An interference claim under § 766A, on the other hand, requires only that

plaintiff show that a third party “intentionally” and “improperly” interfered with

plaintiff’s own performance of her contract. The Restatement explains that the

term “improperly” is used to describe “the balancing process expressed by the

terms ‘culpable and not justified.’” Restatement (Second) of Torts, Introductory

Note to Ch. 37 (1979). Whether a person acted “improperly” requires a balancing

of the parties’ conflicting interests to determine whether the interference was

warranted under the particular circumstances, considering the factors set out in

Restatement § 767: 

(a) the nature of the actor’s conduct, 

(b) the actor’s motive, 

(c) the interests of the other with which the actor’s conduct

interferes, 

(d) the interests sought to be advanced by the actor, 

(e) the social interests in protecting the freedom of action of the actor
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and the contractual interests of the other, 

(f) the proximity or remoteness of the actor’s conduct to the

interference, and 

(g) the relations between the parties.

Trimble , 697 P.2d at 726. 

When it is a corporate agent who has interfered with a contract between the

corporation and the plaintiff, such interference is generally privileged if the agent

acted for a bona fide organizational purpose. Q.E.R., Inc. v. Hickerson , 880 F.2d

1178, 1184 (10th Cir. 1989); Zappa v. Seiver , 706 P.2d 440, 442 (Colo. Ct. App.

1985); see Zelinger v. Uvalde Rock Asphalt Co. , 316 F.2d 47, 52 (10th Cir. 1963)

(“[T]he rule [is] that any interference with a corporation’s contract by an officer,

director or employee of the corporation who is in good faith serving the corporate

interests is privileged.”) . This privilege is not absolute, but must be weighed in

balance with the factors listed above. In this case, whether the store manager was

justified in calling plaintiff back to work and instituting disciplinary proceedings

still requires evaluation the manager’s authority under the collective bargaining

agreement, and therefore the issue is preempted under §301 of the LMRA. The

district court was correct, therefore, in finding plaintiff’s tortious interference

claim preempted.

Similarly, plaintiff’s outrageous conduct claim cannot be determined

without reference to the collective bargaining agreement. We have considered

outrageous conduct claims against employers on several occasions. In Johnson v.
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Beatrice Foods Co. , 921 F.2d 1015 (10th Cir. 1990), an employee alleged that out

of personal hostility, his supervisor instituted a campaign of intentional

discrimination and harassment to cause him emotional distress, including verbal

abuse, institution of discipline that the supervisor knew was unwarranted, and

changes to the employee’s working conditions. We held the employee’s claim

was preempted by § 301 because the outrageousness of his supervisor’s conduct

could not be evaluated without resort to the collective bargaining agreement, and

because the state tort did not create an independent method of measuring when an

employer’s work-related conduct is outrageous. Id. at 1020-21. 

In Albertson’s, Inc. v. Carrigan , 982 F.2d 1478 (10th Cir. 1993), we held

that an employee’s outrageous conduct claim was not preempted by § 301. The

employee alleged that defendants conspired with her employer to falsely accuse

her of shoplifting, to have her arrested, and to suspend her from employment. 

We held that the outrageous conduct claim was not preempted because the

employee could prove her claim by “show[ing] defendants conspired to have

[her] arrested by fabricating her theft . . . from her employer,” without referring

to the collective bargaining agreement. Id. at 1482.

In our most recent case, Garley v. Sandia Corp. , No. 99-2255, 2001 WL

8308 (10th Cir. Jan. 3, 2001), we addressed a situation similar to plaintiff’s. 

Garley alleged that his supervisor, out of personal hostility, conspired with others
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to falsely accuse him of timecard fraud. He alleged that his supervisor, knowing

that he was authorized to attend to union business during work hours, initiated an

investigation into his alleged timecard fraud, had the employee followed, and

caused his discharge. We held that the employee’s outrageous conduct claim, as

it related to these allegations, was preempted because “[d]etermining whether [the

employer’s] conduct during its investigation . . . was ‘outrageous,’ . . . requires

construction of [the employer’s] rights and obligations under the [collective

bargaining agreement] as that is the reference point against which [the

employer’s] action must be scrutinized.” Id. at *13.

Plaintiff argues that her situation is analogous to that of the plaintiff in

Albertson’s . She argues that because the store manager allegedly fabricated the

unexcused absence charge to create a reason to discipline plaintiff, knowing that

such acts would cause plaintiff emotional distress, there is no need to look at the

collective bargaining agreement. We disagree.

Plaintiff’s allegation that her manager fabricated the unexcused absence

charge is simply an allegation that the charge was unwarranted. Her complaint

alleges that the store manager “abused [her] authority” by requiring plaintiff to

come to work during her scheduled vacation and by bringing an unwarranted

unexcused absence charge. Appellant’s App. at 5. To determine whether the

manager abused her authority over plaintiff we must examine the manager’s
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authority to cancel plaintiff’s remaining vacation and require her to return to

work, and the propriety of her initiating disciplinary proceedings. These are

subjects covered by the collective bargaining agreement, and are subjects

ordinarily addressed in a grievance procedure. See Article 10 of Collective

Bargaining Agreement, Appellant’s App. at 58-62 (covering rights of management

and employees regarding scheduling, including vacations) and Article 43, id.

at 83-84 (covering use of grievance process for resolving disputes, including

scheduling disputes). 

Because we cannot determine whether the store manager’s conduct was

outrageous without examining her authority, this claim is different from the

situation in Albertson’s , where the fabrication of shoplifting charges and arrest of

an employee, alone, would be outrageous. Instead, applying the rationale of

Garley and Johnson , we hold the district court was correct in finding plaintiff’s

outrageous conduct claim preempted. See Garley , 2001 WL 8308, at *12 & *13

(holding that employee’s civil conspiracy claim based on fabricated charge of

timecard fraud was not preempted, but outrageous conduct claim based on same

allegations was preempted because determining whether the supervisor’s conduct

was outrageous required resort to the collective bargaining agreement).

Our conclusion is buttressed by the Supreme Court’s language in

Allis-Chalmers Corp. v. Lueck , 471 U.S. 202 (1985), in which the Court held
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that a suit for bad faith handling of a disability claim was inextricably intertwined

with the collective bargaining agreement and was therefore preempted. 

Discussing the danger of allowing state tort law to circumvent § 301, the Court

stated:

Claims involving vacation or overtime pay, work assignment, unfair

discharge–in short, the whole range of disputes traditionally resolved

through arbitration–could be brought in the first instance in state

court by a complaint in tort rather than in contract. A rule that

permitted an individual to sidestep available grievance procedures

would cause arbitration to lose most of its effectiveness . . . as well

as eviscerate a central tenet of federal labor-contract law under § 301

that it is the arbitrator, not the court, who has the responsibility to

interpret the labor contract in the first instance.

Id. at 219-20. 

Finally, plaintiff argues that resort to the collective bargaining agreement is

unnecessary because the rule she was alleged to have broken was not contained in

the agreement, but in a separate set of policies developed by King Soopers. It is

the collective bargaining agreement that authorized the employer to develop these

policies, however, and it is the agreement which defines the scope of the

employer’s authority. See Garley , 2001 WL 8308, at *10 (rejecting argument that

claim was based on policies and rights separate from the collective bargaining

agreement, holding that employer’s Personnel Policy, Code of Ethics, and

Director’s Memo were “inextricably intertwined with consideration of the terms

of the labor contract”) (quotation omitted); Harris v. Alumax Mill Prods., Inc. ,
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897 F.2d 400, 403 (9th Cir. 1990) (rejecting similar argument and holding claim

preempted because “the determination of both the scope of [the employer’s]

control over the attendance policy and any consequences flowing from a violation

of that policy are dependent upon an analysis of the Agreement”). The district

court was correct, therefore, in holding plaintiff’s outrageous conduct claim

preempted. We need not consider the district court’s ruling on the merits of the

claim.

AFFIRMED.