In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 03-1596

TERRY TIFFT, JIM CRUTCHFIELD, JUANITA DIXON, et al.,

Plaintiffs-Appellants,

v.

COMMONWEALTH EDISON COMPANY,

and EXELON CORPORATION, 

Defendants-Appellees.

____________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 02 C 4110—Ruben Castillo, Judge.

____________

ARGUED NOVEMBER 7, 2003—DECIDED APRIL 27, 2004

____________

Before COFFEY, RIPPLE, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

I. History

Defendant-Appellee Exelon Corporation, through its subsidiaries, including Defendant-Appellee Commonwealth

Edison Company (“ComEd”), generates and distributes

electricity to commercial, residential, and industrial consumers in Illinois. Exelon was formed in 2000 as the result
2 No. 03-1596

1 These agreements were actually entered into by a number of

local unions, including the Plaintiffs’ union, the International

Brotherhood of Electrical Workers International Union, and several electric utilities, including the Defendants.

of a merger between the parent company of ComEd and

Peco Energy (“Peco”). The Plaintiffs-Appellants were all

employed at various facilities operated by corporate entities

related to Exelon and ComEd (“Defendants”) and, during

their employment, were represented by Local Union 15 of

the International Brotherhood of Electrical Workers (“Union”). As Union members, the Plaintiffs were covered by a

collective bargaining agreement (“CBA”) which, along with

various side agreements, governed the terms and conditions

of their employment.

Two such side agreements included a Memorandum of

Understanding (“MOU”) and Utility Agreement (“UA”)

entered into by the Union and the Defendants.1

 This was

done in anticipation of the effective date of the Electric

Service Customer Choice and Rate Relief Law of 1997, 220

Ill. Comp. Stat. 5/16-101, et seq. (“Electric Service Law” or

“ESL”), which applied to the Defendants. These agreements

addressed, among other issues, employees’ rights and

entitlements in the event of workforce reductions covered by

the ESL. Specifically, the MOU addressed workforce

reductions described in section 5/16-128(b), and the UA

discussed severance packages for employees laid off during

reductions covered by the ESL.

In part as a result of the merger between ComEd and

Peco, the Defendants began plant closures and workforce

reductions in July and September of 2001. Prior to their

layoffs, the Plaintiffs were given two options: (1) in lieu

of being laid off, they could accept a demotion to a lesser

position with a lower rate of pay; and (2) if laid off, in

exchange for waiving their right to be “recalled” under the
No. 03-1596 3

2 Recall refers to the process by which employees, previously laid

off due to economic necessity, begin working again as economic

circumstances improve. This process by which employees are

brought back to work is governed by the employees’ CBA, taking

into account employees’ seniority and other factors. During the

layoff period, although employees are not working (and hence not

earning any wages), they are still covered by the CBA.

3 The district court’s order in this case became final for purposes

of our review when the Plaintiffs chose not to file an amended

complaint. The district court administratively closed this case on

February 27, 2003 and the Plaintiffs filed Notices of Appeal on

February 26 and March 24—the second filing as a precautionary

measure just in case we determined that the adjudication in the

district court was not “final” until administratively closed. We

treat the finality requirement of 28 U.S.C. § 1291 practically, not

(continued...)

CBA,2 they could receive a severance benefit. Approximately

twelve of the fourteen plaintiffs were offered demotions, and

two employees were laid off. 

They then filed suit in the Circuit Court of Cook County,

Illinois, alleging wrongful termination, in violation of the

ESL. Plaintiffs requested that the state court imply a

private right of action under the ESL and sought both

equitable and legal remedies. On June 7, 2002, the

Defendants timely removed this action, 28 U.S.C. §§ 1441,

1446 (2002), to federal court on the grounds that any

assessment of the alleged ESL violations would require the

district court to interpret the CBA and/or other agreements

and hence, the Plaintiffs’ claims are completely preempted

by section 301 of the Labor Management Relations Act

(“LMRA”), 29 U.S.C. § 185(a) (2002). The Plaintiffs then

unsuccessfully attempted to have the case remanded to

Illinois state court, 28 U.S.C. § 1447(c). This appeal resulted, and for the following reasons we affirm the district

court’s denial of the Plaintiffs’ motion to remand.3
4 No. 03-1596

(...continued)

technically, and thus, Judge Castillo’s ruling is final for purposes

of appeal and we have jurisdiction. See, e.g., Garratt v. Knowles,

245 F.3d 941, 945 (7th Cir. 2001).

II. Analysis

We review the propriety of removal de novo. Garratt v.

Knowles, 245 F.3d 941, 946 (7th Cir. 2001); Moran v. Rush

Prudential HMO, Inc., 230 F.3d 959, 966 (7th Cir. 2000)

(citation omitted), aff’d, 536 U.S. 355 (2002). Similarly, we

also review a district court’s preemption ruling de novo.

Bastien v. AT&T Wireless Servs., Inc., 205 F.3d 983, 987

(7th Cir. 2000) (citations omitted). 

Removal to a district court is appropriate when a cause of

action “arises under” federal law. See 28 U.S.C. §§ 1331,

1441(a). And although a court will look to the face of a

properly pleaded complaint to see if a federal question is

present, Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987)

(laying out the “well-pleaded complaint” rule), a plaintiff

cannot avoid a federal forum by “artfully pleading” what is,

in essence, a federal claim solely in terms of state law, see,

e.g., Franchise Tax Bd. v. Constr. Laborers Vacation Trust,

463 U.S. 1, 22 (1983). Furthermore, when “a federal cause

of action completely preempts a state cause of action, any

complaint that comes within the scope of the federal cause

of action necessarily ‘arises under’ federal law.” 463 U.S. at

24. Due to the importance of uniformity in labor law, any

state law claim “substantially dependent upon analysis

of the terms of an agreement made between the parties in

a labor contract” will be completely preempted by section

301 of the LMRA. Allis-Chalmers Corp. v. Leuck, 471 U.S.

202, 220 (1985) (citation omitted); see also Loewen Group

Int’l, Inc. v. Haberichter, 65 F.3d 1417, 1421 (7th Cir. 1995)

(citing Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S.

399, 403 (1988)). However, where a state law cause of action
No. 03-1596 5

4 We assume, for purposes of this appeal, that a private right of

action is implied under the ESL. Despite Plaintiffs’ arguments to

the contrary, for the purposes of our removal and preemption

analysis, the issue is wholly irrelevant. Hence, it is left for the

trial court to determine.

requires mere reference to a CBA, section 301 preemption

will not necessarily apply. See Livadas v. Bradshaw, 512

U.S. 107, 117-18 (1994) (state claim not preempted where

reference to CBA needed only to calculate damages for

wrongful discharge); 471 U.S. at 211; In re Bentz Metal

Prod. Co., 253 F.3d 283, 289 (7th Cir. 2001) (no preemption

where state law issue was the priority of mechanics’ liens

for vacation pay owed under the CBA). Thus, in this case,

although the Plaintiffs’ complaint characterized their claims

as arising wholly under the ESL, removal was nonetheless

appropriate if the Plaintiff’s claims require an interpretation of, and not simply reference to, the CBA and/or other

labor agreements. See, e.g., Beneficial Nat’l Bank v. Anderson, 539 U.S. ___, 123 S. Ct. 2058, 2062 (2003); Atchley v.

Heritage Cable Vision Assocs., 101 F.3d 495, 498 (7th Cir.

1996). 

The Plaintiffs argue that there is no preemption because

no (or very little) interpretation of the CBA is necessary.

And no interpretation of the CBA is necessary because the

Defendants’ acts were allegedly in clear violation of section

5/16-128 of the ESL.4

 Under the Plaintiffs’ reading of

section 5/16-128(a)(3), (b), and (c), following the transfer of

ownership of an Illinois electric utility, such an entity must

maintain the “status quo” of all non-supervisory utility

employees’ compensation and cannot either lay off or

demote such workers for at least thirty months. (R. 1, Ex. B

at 8-9; Appellant’s Br. at 8-9, 16.) Because the Plaintiffs

were laid off or demoted within thirty months of the

merger, they assert that the Defendants violated the ESL.

And thus, because the Defendants are clearly liable for
6 No. 03-1596

damages under their reading, a court need not look to the

CBA or any other agreement. Put differently, the premise

of all the Plaintiffs’ arguments is that the ESL prohibits the

layoff or demotion of any non-supervisory employee within

thirty months of a transfer of ownership. We disagree. 

The ESL was part of the electric, natural gas, and telephone deregulatory wave that swept the nation in the late

1990’s. Policymakers, concerned over high prices and poor

service quality, began to abandon the traditional assumption that utilities were natural monopolies. Robert Kelter,

Peace, Love, Competition. An Initial Look at the

Restructuring of Illinois Residential Energy Markets, 33

Loy. U. Chi. L.J. 875, 875-76 (2002). To do away with legislatively-sanctioned monopolies and to increase competition, policymakers adopted laws which lowered barriers

to market entry in these industries. Thus, legislators hoped,

efficiency would increase, new products would be developed,

and prices would decrease. See 220 Ill. Comp. Stat. 5/16-

101A (2003). Spurred by such changes in the federal

regulatory scheme and in other states, the Illinois legislature adopted the ESL, its own attempt “to accommodate the

competition that could fundamentally alter the structure of

the electric services market.” Id. 

Increases in efficiency are, in part, the result of new

market entrants’ and existing participants’ utilization of

mergers, consolidations, and other transfers of ownership

to reap the benefits of economies of scale and relative competitive advantages. But such transfers in ownership also

typically result in the reduction of the workforce, at least as

the market adjusts to increased competition. Recognizing

this economic reality, the ESL sought to lessen the adverse

effect of deregulation on electric services workers. 220

Ill. Comp. Stat. 5/16-128(a)(3), (b). Hence, the Plaintiffs

are correct in their assertion that “the Illinois legislature

clearly indicated its intent to protect [utility workers.]”

(Appellant’s Br. at 8.) But they misapprehend both the basic
No. 03-1596 7

economics of deregulation, which predicts the elimination

of some jobs in the short run, and, more critically, the ESL’s

express acceptance of that reality. See 220 Ill. Comp. Stat.

5/16-128(a)(3), (b) (stating “the impacts on employees . . . of

any necessary reductions in the utility workforce . . . shall

be mitigated to the extent practicable through such means

as offers of voluntary severance, retraining, early retirement, outplacement, and related benefits.”) (emphasis

added). 

No provision of the ESL prohibits the reduction of

the workforce, prohibits agreed-upon demotions, or guarantees any specific type of severance or other benefit to

those employees that are laid off. If the ESL imposed such

obligations on the electric utilities, the economic rationale

supporting deregulation would be significantly diminished.

Although the structure of section 5/16-128 confuses its logic,

the obligations it does impose on utilities engaging in a

transfer of ownership are organized according to whom the

obligation is owed. In relevant part, the ESL states:

(b) . . . The General Assembly further finds that the

impacts on employees and their communities of any

necessary reductions in the utility workforce directly

caused by this restructuring of the electric industry

shall be mitigated to the extent practicable through such

means as offers of voluntary severance, retraining,

early retirement, outplacement, and related benefits.

Therefore, before any such reduction in the workforce

during the transition period, an electric utility shall

present to its employees or their representatives a

workforce reduction plan outlining the means by which

the electric utility intends to mitigate the impact of such

workforce reduction.

(c) In the event of a . . . transfer of ownership during

the mandatory transition period . . . the electric utility’s

contract and/or agreements with the acquiring entity or

persons shall require that the entity or persons hire a
8 No. 03-1596

sufficient number of non-supervisory employees to

operate and maintain [the utility]. . . by initially making

offers of employment to the non-supervisory workforce

. . . at no less than the wage rates, and substantially

equivalent fringe benefits and terms and conditions of

employment that are in effect at the time of transfer of

ownership . . . ; and said wage rates and substantially

equivalent fringe benefits and terms and conditions of

employment shall continue for at least 30 months . . .

unless the parties mutually agree to different terms

and conditions . . . . The utility shall offer a transition

plan to those employees who are not offered jobs by the

acquiring entity because that entity has a need for fewer

workers.

220 Ill. Comp. Stat. 5/16-128 (emphasis added). Hence,

the ESL required the Defendant utilities to: (1) present a

“workforce reduction plan” to all workers or their representatives prior to implementing layoffs, 5/16-128(b); (2) following the merger, offer a “transition plan” to employees

who would be laid off, 5/16-128(c); and (3) following the

merger, hire (i.e., continue to employ) enough non-supervisory employees necessary to “operate and maintain” the

utility (and who therefore would not be laid off), with the

same wages, fringe benefits, and terms of employment for

at least thirty months, unless the parties agree otherwise,

5/16-128(c). 

Stepping back to look at the bigger picture, given the

dynamic changes which occur as competition is introduced

to an industry, the ESL seeks to encourage labor and management interaction and negotiation during these transitions, so that market disruptions and negative employment

effects are kept to a minimum. As stated above, the

ESL essentially requires negotiation between labor and

management regarding the implementation of layoffs and

the benefits for employees who will be laid off. And for

employees whose employment will continue after the
No. 03-1596 9

merger, where agreement cannot otherwise be reached, the

legislation protects those employees by guaranteeing their

wages, benefits, and terms of employment for thirty

months. Had the Defendants offered no “workforce reduction plan” to employees, nor any “transition plan” to laid-off

employees, nor reached any agreements with employees

who continued to work after the merger (i.e., the demotion

agreements) while simultaneously refusing to honor their

existing employment arrangements, then the ESL clearly

would have been violated. And, as the Plaintiffs allege, the

district court would then have had no need to interpret the

CBA or any other agreements, their state law claim would

be independent of the CBA, and their claims would not have

been preempted by section 301 of the LMRA. Cf. Caterpillar, 482 U.S. at 395; Goetzke v. Ferro Corp., 280 F.3d 766,

779 (7th Cir. 2002) (state law retaliatory discharge claim

not preempted); Sprewell v. Golden State Warriors, 266 F.3d

979, 991 (9th Cir. 2001) (state law tortious interference

with contract claim not preempted); Voilas v. General

Motors Corp, 170 F.3d 367 (3d Cir. 1999) (state fraud claim

not preempted).

But instead, the Defendants did comply with the most

basic requirements of section 5/16-128 of the ESL on its

face. All of the Plaintiffs, through their Union, negotiated and reached three agreements with the Defendants:

the CBA, MOU, and UA. The layoffs and demotions at issue

here are covered by the CBA generally, and in greater

detail by the MOU, addressing the workforce reductions

described in section 5/16-128(b), and by the UA, addressing

severance packages for laid-off employees. Furthermore,

each individual Plaintiff who was offered a demotion was

free to reject that offer, and, assuming they were subsequently laid off, hold the Defendants to their obligations

under the CBA, MOU, and UA. If they chose to accept the

demotion to continue to work, then they reached an alternate agreement, as explicitly contemplated by the ESL in

section 5/16-128(c).
10 No. 03-1596

Therefore, whether the Defendants violated the ESL will

require a “substantive examination” of the CBA, MOU, and

UA to determine (1) if the agreements properly embodied

the directives of the ESL; and (2) if the Defendants failed to

comply with the terms of these agreements. Loewen, 65

F.3d at 1423-24. Admittedly, the Plaintiffs are correct

in their assertions that “the language of the ESL does not

reference a [CBA] at all,” and, assuming the ESL creates a

private right of action, a non-union employee could therefore file an action under the ESL. (Appellants’ Opening Br.

at 21-22.) But the employees in this case are covered by

collectively bargained agreements, two of which are the

direct result of the ESL’s requirements, and hence, the ESL

does not create any rights independent of those agreements.

As pointed out above, the state-law cause of action is

meaningless without reference to the agreements which

articulate the Defendants’ obligations toward these Plaintiffs. See Gibson v. AT&T Techs., Inc., 782 F.2d 686, 688

(7th Cir.), cert. denied, 477 U.S. 905 (1986); Dougherty v.

Am. Tel. and Tel. Co., 902 F.2d 201, 204 (2d Cir. 2001);

Commonwealth Edison Co. v. Int’l Brotherhood of Elec.

Workers, Local Union No. 15, 961 F. Supp. 1154, 1162 (N.D.

Ill. 1996). 

Whether the CBA, MOU, and UA properly incorporated

the directives of the ESL and whether Defendants respected

the employees’ rights as agreed to in those agreements—and therefore whether they did or did not violate

the ESL—will require analysis of, for example, the process

the Defendants used to lay off and rehire employees postmerger, pay severance and other benefits, recall laid-off

workers, and handle employee grievances. This requires

more than mere reference to the collectively bargained

agreements. The ESL, in this case, does not provide the

Plaintiffs with rights independent of the CBA, MOU, and

UA. Therefore, section 301 of the LMRA preempts the

Plaintiffs’ state law claims and the case was properly

removed to federal court.
No. 03-1596 11

III. Conclusion

For the foregoing reasons, we AFFIRM the district court’s

denial of the Plaintiffs’ motion to remand.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—4-27-04