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. e du/thir dc ir c uit_1997/147Filed July 7, 1997

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 96-7261

UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, INTERNATIONAL UNION AND ITS LOCAL 787,
APPELLANT

v.

TEXTRON LYCOMING RECIPROCATING ENGINE DIVISION, AVCO CORP.,

APPELLEE

On Appeal From the United States District Court For the Middle District of Pennsylvania (D.C. Civ. No. 95-cv-01918)

Argued: JANUARY 30, 1997

Before: BECKER, ROTH, Circuit Judges

, BARRY, District Judge .*

(Filed: July 7, 1997)

___________________________________________________ ______________ *Honorable Maryanne Trump Barry, United States Dist rict Judge for the District of New Jersey, sitting by designation.JORDAN ROSSEN, ESQUIRE

General Counsel International Union, United Automobile Aerospace and Agricultural Implement Workers of America, UAW
8000 East Jefferson Avenue Detroit, Michigan 48214

STEPHEN A. YOKICH, ESQUIRE (ARGUED)
Associate General Counsel International Union, United Automobile Aerospace and Agricultural Implement Workers of America, UAW 1757 "N" Street, NW Washington, DC 20036

Attorneys for Appellant

BARRY SIMON, ESQUIRE (ARGUED) GARY M. TOCCI, ESQUIRE Schnader, Harrison, Segal, & Lewis 1600 Market Street, Suite 3600 Philadelphia, PA 19103

CHARLES J. McKELVEY, ESQUIRE McNerney, Page, Vanderlin & Hall
433 Market Street
P.O. Box 7 Williamsport, PA 17703

Attorneys for Appellee

OPINION OF THE COURT

BECKER, Circuit Judge

.

This is an appeal by the United Automobile, Aerospa ce and Agricultural Implement Workers of America ("UAW ")
and its Local 787 from the district court's order d ismissing its complaint against defendant Textron Lycoming

2Reciprocating Engine Division, Avco Corp. ("Textron "), for

lack of subject matter jurisdiction under § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a). The district court found that the UAW's suit, which see ks a declaration that the collective bargaining agreemen t between the parties is voidable because it was secu red by fraud in the inducement, was not a "[s]uit for viol ation of [a] contract[ ] between an employer and a labor organiz ation representing employees" within the meaning of § 301 (a).

The UAW's appeal requires us to consider the scope of § 301(a) and our decision in Mack Trucks, Inc. v. International Union, United Automobile, Aerospace a nd Agricultural Implement Workers of America , 856 F.2d 579 (3d Cir. 1988). In that case, Mack Trucks sought a declaratory judgment that the collective bargaining agreement between it and the UAW was valid and enforceable, after the UAW had threatened to declar e that there was no agreement between the parties. We held that § 301(a) conferred subject matter jurisdiction, fin ding that Mack Trucks' suit was a "suit for violation of[a] c ontract[ ]."
Id. at 588.

In urging us to affirm the district court's order i n this case, Textron contends that the suit filed by the U AW, here the party seeking to establish jurisdiction, can be distinguished from Mack Trucks in two respects. First, Textron points out that, while the very existence o f the collective bargaining agreement was at issue in Mac k
Trucks , the UAW here acknowledges the existence of the agreement, and rather seeks a declaration that the collective bargaining agreement between the parties is
voidable because it was secured by fraud in the inducement. Second, while in Mack Trucks the plaintiff
wished to enforce the collective bargaining agreement, the UAW here seeks the power to repudiate the agreement, and Textron contends that § 301(a) does not supply juri sdiction under such circumstances. Because we disagree with
Textron and conclude that the UAW's suit is a suit for violation of a contract under § 301(a) and Mack Tru cks , we

reverse.

3I.

The complaint pleads the following facts which, sin ce we deal with a motion to dismiss, we must take as true . The UAW represents employees at Textron's Williamsport, Pennsylvania plant, at which the company manufactur es and assembles aircraft engines. This dispute arose from the collective bargaining agreement between the parties that covered the period from April 1, 1994 to April 1, 1 997 and, more specifically, the negotiations that produced t hat agreement. Prior to the commencement of negotiation s, the UAW submitted to Textron a request for information to aid it in its preparations for the negotiations. One se ction of the request asked whether Textron planned to subcontrac t out any of the work that was being done by the UAW memb ers at the plant. The request specifically demanded any written documents that Textron had prepared on the subject of subcontracting. The UAW twice repeated this request . Prior to the negotiations, Textron never disclosed any in formation about plans to move bargaining unit work.

At the opening of the negotiations, the UAW renewed its request that Textron disclose any plans to contract out the work. Textron's vice-president for human resources, Frank Ratchford, stated that he had no knowledge of any p lans for subcontracting, and also promised to make sure that his knowledge was complete. Neither Ratchford nor any o ther Textron official raised this issue again during neg otiations. The parties reached a collective bargaining agreeme nt in March 1994, which was ratified by the UAW membershi p at the beginning of April 1994.

The UAW's complaint alleges that, during the negotiations, Textron developed a plan to subcontra ct certain bargaining unit work at the plant, but neve r disclosed it to the UAW. According to the UAW's submission, the plan was presented to and approved by
Textron's Board of Directors after the UAW membersh ip ratified the collective bargaining agreement. The membership learned of the plan in June 1994.

The UAW alleges that about half of the union's memb ers at the plant will lose their jobs as a result of Te xtron's subcontracting plan. It also represents that it wou ld have

4used a different bargaining strategy had it known o f the

company's subcontracting plan. Instead, relying on the company's denial of any such plan, the union made n o contract demands relating to the issue and did not pursue its request for information on the subject. More sp ecifically, the union represents that it would not have agreed to the "no-strike" provision in the collective bargaining agreement had it known of the subcontracting plan.

The UAW's complaint in the District Court for the M iddle District of Pennsylvania sought a declaratory judgm ent that the collective bargaining agreement was voidable at the UAW's option because it was secured by fraud in the inducement. The UAW relied on § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), for s ubject matter jurisdiction. Textron moved to dismiss the c omplaint on two grounds: (1) § 301(a) failed to confer subje ct matter jurisdiction, Fed. R. Civ. P. 12(b)(1), because the National Labor Relations Board ("NLRB") has exclusive jurisd iction over the UAW's claims of bad faith bargaining; and (2) the
UAW failed to state a claim for relief that could b e granted, Fed. R. Civ. P. 12(b)(6), because it had failed to exhaust the grievance process available under the collective ba rgaining
agreement.

The district court granted Textron's motion based o n the first ground, and, accordingly, did not reach the s econd question. The court first concluded that the UAW so ught neither to enforce its rights under the collective bargaining agreement nor to show that a collective bargaining agreement existed; rather, the UAW had requested on ly a declaration that Textron had violated its duty to b argain in good faith under § 8 of the National Labor Relation s Act ("NLRA") in negotiating the agreement. Having so characterized UAW's suit, the district court found that it lacked jurisdiction under § 301, and that the case was within the exclusive jurisdiction of the NLRB.

Moreover, the court reasoned that, while we held in Mack
Trucks that a district court has jurisdiction to determin e whether a collective bargaining agreement exists, t hat holding was "based on the principle that a district court may enforce the parties' rights under a CBA, but ma y not reach a claim which is independent of the contract. " The

5court found that the UAW's claim was independent of the terms of the contract. It concluded finally that, " [i]n no way
can UAW's claim be classified as one for `violation of [a] contract[ ] between an employer and a labor organiz ation' under § 301(a)." Order at 6.

The UAW appeals, contending that the district court erred in concluding that § 301(a), as interpreted b y our decision in Mack Trucks , does not confer jurisdiction over its suit. Our review of the order dismissing the co mplaint is plenary. See Packard v. Provident Nat'l Bank , 994 F.2d 1039, 1044 (3d Cir. 1993).

II.

This case requires us to examine again the relation ship between the jurisdiction of the NLRB and that of th e federal district courts over labor cases. As we explained i n Mack
Trucks , 856 F.2d at 584-85, under the preemption doctrine of San Diego Building Trades Council v. Garmon , 359 U.S. 236, 245 (1959), "[w]hen an activity is arguably su bject to § 7 or § 8 of the [National Labor Relations] Act, t he States
as well as the federal courts must defer to the exc lusive competence of the National Labor Relations Board."1 The purpose of the Garmon preemption doctrine is both to ensure the uniform development of substantive labor law rules and to entrust the development of those rules to an administrative agency with particular labor law exp ertise. See Vaca v. Snipes , 386 U.S. 171, 178-81 (1967); Mack Trucks, 856 F.2d at 584.

This doctrine, however, "has never been rigidly app lied to cases where it could not fairly be inferred that Co ngress intended exclusive jurisdiction to lie with the NLR B." Vaca

, 386 U.S. at 179. In § 301(a) of the Labor Managemen t Relations Act, Congress "carved out" such an except ion to the exclusive jurisdiction of the NLRB over cases a rguably subject to § 7 or § 8 of the NLRA. Id. This section provides:

___________________________________________________ ______________

1. Section 7 of the NLRA concerns the right of empl oyees to organize and to engage in collective bargaining, 29 U.S.C. § 157 , and § 8 prohibits both employers and unions from committing "unfair l abor practices" as defined in the statute, id. § 158.

6"Suits for violation of contracts between an employ er and a

labor organization representing employees . . . may be brought in any district court of the United States having jurisdiction over the parties." 29 U.S.C. § 185(a). Hence, a federal district court has jurisdiction over suits "for violation of contracts between an employer and a la bor organization representing employees" under § 301(a) even if the claimed harm may arguably constitute an unfair labor practice under the NLRA. Under these circumstances- - when the challenged practice both violates the coll ective bargaining agreement and is arguably subject to the NLRA
-- the federal district courts and the NLRB are sai d to share "concurrent jurisdiction" over the suit. Mack Trucks

, 856 F.2d at 585. In other words, the NLRB retains exclusive jurisdiction over a claim only when the c hallenged conduct is an unfair labor practice that is not als o subject to § 301(a) jurisdiction.

The purpose of § 301(a) was to encourage the judici al enforcement of collective bargaining agreements. In enacting § 301, Congress recognized the importance, for promoting industrial peace, of " `assuring the enfo rceability of [collective bargaining agreements]' in the court s." Id. at 587 (quoting Dowd Box Co. v. Courtney , 368 U.S. 502, 509 (1962)). Moreover, § 301 "authorizes federal courts to fashion a body of law for the enforcement of . . . collective bargaining agreements," Textile Workers Union v. Li ncoln
Mills , 353 U.S. 448, 451 (1957), and, accordingly, encourages the development of a such a body of law. As the Supreme Court has explained, "[t]he strong policy f avoring judicial enforcement of collective-bargaining contr acts was sufficiently powerful to sustain the jurisdiction o f the district courts over enforcement suits even though the conduct involved was arguably or would amount to an unfair labor practice within the jurisdiction of th e National Labor Relations Board." Hines v. Anchor Motor Freig ht, Inc.

, 424 U.S. 554, 562 (1976).

III.

In Mack Trucks , we considered whether § 301(a) supplied subject matter jurisdiction over suits about the ve ry existence of a collective bargaining agreement, or whether

7that section was limited to suits that posited the existence

of the agreement and merely alleged a breach of tha t agreement. The UAW and Mack Trucks had reached an o ral agreement about the terms of a collective bargainin g agreement. While the parties were negotiating contr act language to reflect the oral agreement, the UAWfile d a grievance alleging that Mack Trucks had unilaterall y implemented changes to that agreement. Soon after, the union threatened that, unless the parties settled t heir disputes and executed a written agreement within a certain period of time, it would declare the agreement void . 856
F.2d at 582-83. Mack Trucks filed suit in federal d istrict court pursuant to § 301(a) seeking a declaratory ju dgment that the new collective bargaining agreement was va lid and
enforceable.

The UAW, in that case challenging § 301(a) jurisdiction, responded that the court lacked jurisdiction becaus e the suit did not concern a contract claim, but rather i mplicated only the duties under the NLRA to bargain collectiv ely and in good faith and to reduce the terms of an oral ag reement to writing, which are subject to the exclusive juri sdiction of the NLRB. We rejected this argument, noting that ev en if a suit is subject to the NLRB's jurisdiction, we must determine whether it is also subject to § 301(a) ju risdiction.
We found further that Mack Trucks' suit did not tur n "solely on violations of good faith bargaining, or the dut y to execute an agreement . . . which would trigger the NLRB's exclusive jurisdiction." Id. at 586 (citations omitted and emphasis added).

We then addressed the central question, whether "su its
for violation of contracts" included suits concerni ng the validity of a labor agreement, or whether § 301(a) jurisdiction was limited to suits alleging violatio ns of particular contractual provisions in an existing co llective bargaining agreement. We noted that several courts of appeals have limited jurisdiction to suits alleging a breach of a particular provision of a collective bargainin g agreement. See A.T. Massey Coal Co. v. Internationa l Union,
United Mine Workers of America , 799 F.2d 142, 146 (4th Cir. 1986); NDK Corp. v. Local 1550 of Commercial W orkers
Int'l Union , 709 F.2d 491, 492-93 (7th Cir. 1983);

8Hernandez v. National Packing Co. , 455 F.2d 1252, 1253

(1st Cir. 1972).

Because § 301(a) "is not free from ambiguity, we interpret[ed] § 301(a) in light of its legislative history, congressional intent, and underlying policies." Mac k Trucks

, 856 F.2d at 586. In view of these sources, we first concluded that limiting § 301(a) jurisdiction to su its that presume the existence of a labor contract "ignores Congress' broader concern that the courts -- as opp osed to the NLRB -- be granted authority to decide disputes of a
contractual nature." Id. at 588. We held that:

When, as here, a party seeks enforcement of a labor agreement, and the other party denies the contract' s existence, the filing party's declaratory judgment action constitutes an `enforcement' action. Congress inten ded that contractual disputes be resolved by the courts applying `usual processes of the law.' These princi ples of law apply equally to cases involving breach of a n acknowledged contract and those involving a dispute over the agreement's existence.

Id. (citation omitted). In so holding, we distinguishe d prior cases in which we had found no § 301 jurisdiction o n the ground that the claims in those cases were each som ehow independent of the collective bargaining agreement. Id. at 589. For example, in one case, the plaintiffs claim ed that their collective bargaining agreement conflicted wi th a preagreement contract of hire. See Leskiw v. Local 1470, Int'l
Bhd. of Elec. Workers , 464 F.2d 721 (3d Cir. 1972); see also
Adams v. Budd , 349 F.2d 368 (3d Cir. 1965); Medlin v. Boeing Vertol Co. , 620 F.2d 957 (3d Cir. 1980).

IV.

A.

The UAW, back before us and this time trying to
establish jurisdiction, contends that § 301(a) confers feder al jurisdiction over its complaint, characterizing Mac k Trucks as holding that § 301(a) jurisdiction exists for su its involving questions about the enforceability of a c ollective

9bargaining agreement. Textron responds that the dis trict

court properly dismissed the UAW's complaint for la ck of subject matter jurisdiction under § 301(a) and Mack Trucks

. First, Textron points out that Mack Trucks dealt with whether a collective bargaining agreement actually existed between the parties. Because the UAW's claim here i s that the collective bargaining agreement is voidable (but not void) because it was secured by fraud in the induce ment, and the UAW has acknowledged the existence of the agreement, Mack Trucks does not, Textron submits, compel the conclusion that § 301(a) confers jurisdiction. Second,
even if Mack Trucks establishes § 301(a) jurisdiction for some suits that concern the enforceability of a col lective bargaining agreement, the argument continues, § 301 (a) supplies jurisdiction only when a party seeks to en force a collective bargaining agreement but not when a part y seeks to repudiate one, as in this case.

We agree with the UAW, and conclude that § 301(a), as interpreted by Mack Trucks , confers jurisdiction over the UAW's fraudulent inducement suit. Taking up first
Textron's contention that Mack Trucks does not supply jurisdiction when the plaintiff seeks to repudiate the agreement, we believe that the language of Mack Tru cks itself -- that a suit "involving a dispute over the agreement's existence" is subject to § 301(a) juris diction -- compels the result that a party challenging an agre ement's existence can establish § 301(a) jurisdiction.2

Moreover, in Mack Trucks , we distinguished a case in which the Fourth Circuit held, in a consolidated ap peal, that § 301(a) supplied jurisdiction over a union's suit for a declaration that an existing collective bargaining agreement applied to particular employers, but not to an empl oyer's suit challenging the existence of that agreement. S ee A.T. Massey Coal Co. , 799 F.2d at 146. We stated that this "view fails to articulate a legal basis to justify jurisd iction in the

___________________________________________________ ______________

2. We acknowledged as much recently when we stated that the "basis of Section 301 jurisdiction in Mack " was a claim that "no contract exist[ed]." Beverly Enterprises--Pennsylvania, Inc. v. District 1199C National Union of Hospital and Health Care Employee s , 90 F.3d 93, 95 (3d Cir. 1996).

10union case, but not in the employer's case." Mack T rucks

, 856 F.2d at 588 n.10.

Additionally, we see no reason why the rationale be hind
Mack Trucks -- that by enacting § 301(a) Congress intended that the courts resolve disputes of a contractual n ature, including disputes over the agreement's very existe nce -- does not also apply when the party who files suit s eeks a declaration that the agreement is not enforceable. Our conclusion is buttressed in policy terms by the UAW 's argument that jurisdiction lies in this case becaus e the
union would have raised the fraudulent inducement c laim
as an affirmative defense had it refused to abide b y the collective bargaining agreement and Textron hadfile d suit under § 301 to enforce it: the development of a con sistent body of law in this area depends, in part, on feder al court jurisdiction over all claims of a contractual natur e, no matter who first resorts to court.

Textron also seeks to distinguish between suits concerning the existence of an agreement and those concerning its enforceability . As the foregoing discussion suggests, we do not believe that there is any diffe rence under Mack Trucks between suits about the existence of a collective bargaining agreement, i.e., seeking decl aratory judgment that the agreement is void , and suits, like this one, about the enforceability of a collective barga ining agreement, i.e., seeking declaratory judgment that an agreement is voidable at the will of that party. The UAW's suit clearly arises from a contractual dispute: a d ispute about whether a contract was secured by fraudulent inducement is as much a contract dispute as a dispu te about a contract's existence. As we explained in Ma ck
Trucks , Congress intended that such suits be"resolved by the courts applying `usual processes of the law.' " Mack
Trucks , 856 F.2d at 588.

The Ninth Circuit has already held that § 301(a) co nfers jurisdiction over fraudulent inducement claims. See Rozay's Transfer v. Local Freight Drivers , 850 F.2d 1321, 1326 (9th Cir. 1988) ("Section 301 . . . applies no t only to suits for breach of a collective bargaining agreeme nt once it is duly formed, but also to suits impugning the exi stence and validity of a labor agreement, including those alleging

11improper conduct or mistake during the formation of the agreement." (citations omitted)); International Bhd . of Teamsters v. American Delivery Serv. Co. , 50 F.3d 770, 773-74 (9th Cir. 1995).

For the foregoing reasons, we conclude that § 301(a ) supplies jurisdiction over the UAW's suit alleging that Textron secured the collective bargaining agreement between the parties by fraud in the inducement.

B.

We are also unpersuaded by Textron's contention tha t the UAW's suit does not give rise to § 301(a) juris diction because it arises from pre-contract rights, that is , rights that are "independent" of the collective bargaining agreement. It bases this conclusion on its understa nding that the UAW's claims stem from the negotiation of the agreement, not from an alleged violation of the ter ms of the agreement itself, and as such, allege only a violat ion of the duty to bargain in good faith under the NLRA. In ma king this argument, Textron relies on several cases whic h we distinguished in Mack Trucks , see 856 F.2d at 589, in which we held that § 301(a) did not provide jurisdi ction. See Medlin v. Boeing Vertol Co. , 620 F.2d 957 (3d Cir. 1980); Leskiw v. Local 1470, Int'l Bhd. of Elec. Workers , 464 F.2d 721 (3d Cir. 1972); Adams v. Budd Co. , 349 F.2d 368 (3d Cir. 1965). In essence, Textron contends that the U AW's claim is more akin to the pre-Mack Trucks cases than it is
to the suit in Mack Trucks

.

In Adams , the plaintiffs, employees subject to a collective bargaining agreement, sought jurisdiction under§ 30 1(a) to press the claim that the union and Budd had conspir ed, in negotiating the collective bargaining agreement, to deprive them of rights contained in their pre-collective ba rgaining agreement "contracts of hire." Recognizing that the se plaintiffs did not allege a violation of the collec tive bargaining agreement, but rather a "violation by a labor contract of rights which they assert were independe ntly, and pre-agreement, vested in them by their `contrac t of hire,' " we held that the plaintiffs had not establ ished § 301(a) jurisdiction. Adams , 349 F.2d at 370; accord

12Leskiw , 464 F.2d at 723; see also Medlin , 620 F.2d at 962

(refusing to exercise jurisdiction under § 301(a) w here the plaintiffs' claims were based on rights independent of the collective bargaining agreement: "[T]hese were not rights arising in any way under the collective bargaining agreement.").

We disagree with Textron, because the UAW's suit is not akin to the pre-Mack Trucks cases. As we characterized them in Beverly Enterprises , those cases held "that federal courts lack Section 301 jurisdiction over challenge s to contracts on the basis that they conflicted with th e NLRA or some other external agreement." Beverly Enterprises -- Pennsylvania, Inc. v. District 1199C National Union of Hospital and Health Care Employees , 90 F.3d 93, 95 (3d Cir. 1996) (affirming dismissal of a complaint wher e the plaintiff sought only a declaration that a clause i n the collective bargaining agreement violated § 8(a)(3) of the NLRA). We thus reject Textron's contention that the plaintiffs in Adams failed to establish§ 301(a) jurisdiction because their claim turned solely upon adverse effe cts arising from the negotiation of the collective bargaining agreement. While we agreed with the defendant union 's argument in Adams that the suit had to do with the negotiation of the agreement rather than whether th e agreement had been breached, see Adams , 349 F.2d at 369, our conclusion that § 301(a) did not confer ju risdiction was based on the fact that the plaintiffs' suit all eged a violation of their rights contained in a pre-agreem ent contract, not on the fact that the plaintiffs' clai m concerned the negotiations rather than the collective bargain ing agreement itself.

Contrary to the pre-Mack Trucks line of cases, the UAW's claim that the collective bargaining agreement was secured by fraud in the inducement arises not out of the NL RA or another contract, but out of the collective bargain ing agreement itself. The claim alleges flaws in the ba sic formation of the collective bargaining agreement, a nd its resolution is integral to the question whether the agreement is enforceable. In other words, Textron's allegedly fraudulent conduct goes to the heart of the enforce ability of the collective bargaining agreement between the par ties.

13Thus, the UAW is seeking to enforce rights that exi st under

the collective bargaining agreement.

In short, the claim here can be adjudicated without consideration of rights possessed by the parties un der any other agreement or the NLRA. As such, this case cle arly does not fall within the pre-Mack Trucks line of cases. Hence, even if the UAW's claim could arguably const itute an unfair labor practice under § 7 or § 8 of the NL RA, the UAW's claim is not solely a claim under the NLRA, a nd is subject to the concurrent jurisdiction of both the federal
district courts and the NLRB.3

The order of the district court dismissing the comp laint for lack of subject matter jurisdiction will be rev ersed and the case remanded for further proceedings.4

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

___________________________________________________ ______________

3. In this regard, we note that it is not clear tha t the NLRB actually would have jurisdiction over the UAW's fraudulent i nducement claim. According to the UAW, the duty to bargain in good f aith under §§ 8(a)(5) and 8(d) of the NLRA is qualitatively different fro m its fraud in the
inducement claim. While the claims of bad faith bar gaining and of fraudulent inducement may overlap both factually an d legally, they are
not identical.

4. Textron has also argued that the UAW's complaint must be dismissed because the union failed to exhaust the grievance p rocedures contained in the collective bargaining agreement before filin g suit. The district
court did not reach this issue when it dismissed th e complaint, and
should do so on remand.

14