No. 84-499 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

DALE IvlALQUIST , GEORGE BOHARSKI , GEORGE BELT and LOCAL 768, IBEW, 

Plaintiff and Appellant, 

HOWARD P. FOLEY, a District of Columbia 

Corporation; CITY ELECTRIC, a Montana 

Corporation, and R.L. PAYNE COMPANY, INC., 

A Montana Corporation, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable John S. Henson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Terry Wallace argued, Missoula, Montana 

For Respondent: 

Garlington, Lohn & Robinson; Charles E. McNeil argued, 

(Foley) , Missoula, Montana 

Corette, Smith, Pohlman & Allen; Lissa K. Swan argued, 

(City Electric), Butte, Montana 

Milodragovich, Dale & Dye; Karl H. Boehm, (co-counsel 

of City Electric) , Missoula, Montana 

Worden, Thane & Haines; Stacey Weldele-Wade argued, 

(Payne) , Missoula , Montana 

Filed: 

Submitted: December 10, 1985 

Decided: February 13, 1986 

FEB 13 1986 

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Clerk 
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of 

the Court. 

This is an appeal from an order of the Fourth Judicial 

District Court dismissing plaintiffs' complaint on the basis 

that the action was preempted by federal law and the State 

District Court lacked subject matter jurisdiction to 

adjudicate the controversy. We reverse and remand for trial. 

This action was instituted by plaintiffs Dale Malquist, 

George Roharski, George Belt and Local 768, IBEW. No issue 

has been raised on appeal concerning standing of Local 768, 

IBEW, to prosecute this tort action and therefore all 

plaintiffs will be treated as one. 

In 1979, Champion International, of Bonner, Montana, 

began construction of an expansion project on a packaging 

plant in Missoula County, Montana. Champion hired Matthews, 

McCracken and Rutland (MM&R) of Baton Rouge, Louisiana, to do 

the general electrical contracting work. In March of 1980, 

MM&R, Howard P. Foley Company, City Electric and R. L. Payne, 

Lnc., entered into a collective bargaining agreement with 

Local 768 of the International Brotherhood of Electrical 

Workers. Pursuant to the terms of the agreement signed by 

the parties, all electrical contractors on the project were 

to hire electricians through the Union referral books. 

Hiring could be from no other source unless labor was not 

available from the Union. Malquist, Boharski and Belt all 

placed their names in the referral book and were hired by 

MM&R until that company was terminated by Champion. At this 

time the three plaintiffs were laid off pursuant to a 

reduction in force and placed their names in the referral 

book for future employment. Plaintiffs were referred to 

defendants for employment, but were refused. 

In September of 1980, a meeting was held between Union 

officials and representatives of defendant employers. A 
Union business agent, Reg McMurdo, was shown a list of 20-30 

names allegedly blacklisted from the project. Plaintiffs 

were blacklisted. Thereafter the Local filed a complaint 

under the collective bargaining agreement. The 

Labor-Management Committee deadlocked on the issue by a 6-6 

vote, and the Union then dropped the complaint for the reason 

that the conduct complained of was not covered in the 

collective bargaining agreement, which only dealt with wages, 

hours and conditions of work. 

Plaintiffs then filed claims in the State District Court 

for the willful and malicious blacklisting of the plaintiffs, 

seeking both compensatory damages and punitive damages. Two 

of the three defendants, R. L. Payne and City Electric, moved 

for summary judgment, alleging federal preemption. The 

District Court denied the motions for summary judgment, but 

dismissed the complaint, holding that blacklisting is 

arguably prohibited by the National Labor Relations Act 

(NLRA) and thus the State District Court lacked subject 

matter jurisdiction. 

The issues presented on appeal are: 

1. Whether plaintiffs' claim grounded in tort is 

preempted by the National Labor Relations Act, thereby 

denying the State District Court subject matter jurisdiction? 

2. Whether plaintiffs failed to exhaust their 

administrative remedies? 

3. Whether the action is barred by the statute of 

limitations? 

Respondents place heavy reliance upon San Diego Building 

Trades Council v. Garmon (1959), 359 U.S. 236, 79 S.Ct. 773, 

3 L.Ed.2d 775. In Garmon, supra, the United States Supreme 

Court established guidelines for determining respective 

jurisdictions of the National Labor Relations Board and the 

states in labor management relations. The Court said: 
When it is clear or may fairly be assumed that the 

activities which a State purports to regulate are 

protected by 5 7 of the Natj-onal Labor Relations 

Act, or constitute an unfair labor practice under 

§ 8, due regard for the federal enactment requires 

that state jurisdiction must yield. To leave the 

States free to regulate conduct so plainly within 

the central aim of federal regulation involves too 

great a danger of conflict between power asserted 

by Congress and requirements imposed. by state law. 

359 U.S. at 244, 79 S.Ct. at 779, 3 L.Ed.2d at 782. 

In dismissing the complaint, the trial court placed 

emphasis upon the rule articulated by the Garmon court that 

the conduct need only be "arguably subject" to the NLFA. The 

language used by the Court in Garmon supports the trial 

court's position: 

. . . When an activity is arguably subject to 5 7 

or 5 8 of the Act, the States as well as the 

federal courts must defer to the exclusive 

competence of the National Labor Relations Board if 

the danger of state interference with national 

policy is to be averted. 

359 U.S. at 245, 79 S.Ct. at 780, 3 L.Ed.2d at 783. 

Respond.enl:s acknowled.ge that two subsequent cases 

modified the Garmon approach. In Sears, Roebuck & Company v. 

San Diego County District Council of Carpenters (1978), 436 

U.S. 180, 98 S.Ct. 1745, 56 L.Ed.2d 209, and Farmer v. United 

Brotherhood of Carpenters and Joiners of America, Local 25 

(1977), 430 U.S. 290, 97 S.Ct. 1056, 51 L.Ed.2d 338, the 

Supreme Court protected the states from federal preemption 

when the states were controlling conduct traditionally 

subject to state jurisdiction, especially where the state had 

a substantial interest in regulation of the conduct at issue 

and the state's interest was one that did not unduly 

interfere with federal regulation. The exception to federal 

preemption recognized by the United States Supreme Court has 

been primarily confined to a "violence" exception. Where the 

defendant's conduct may well have constituted an unfair labor 

practice but amounted to violence, the United States Supreme 

Court has decided that the state's interest in protecting its 
citizens from violence is sufficiently strong that the 

state's tort law will be allowed to regulate and punish such 

conduct. Farmer, 430 U.S. at 299, 97 S.Ct. at 1063, 51 

We do not find respondents' authority dispositive of the 

fact situation here at issue. Section 39-2-803, MCA, 

provides : 

Blacklisting Prohibited. If any company or 

corporation in this state authorizes or allows any 

of its agents to blacklist or any person does 

blacklist any discharged employee or attempts by 

word or writing or any other means whatever to 

prevent any discharged employee or any employee who 

may have voluntarily left the company's service 

from obtaining employment with another person . . . such company or corporation or person is liable in 

punitive damages to such employee so prevented from 

obtaining employment, to be recovered by him in a 

civil action . . . . 

The conduct proscribed by the state statute is 

"blacklisting" per se. There is no requirement that 

blacklisting be related to an unfair labor practice. If an 

employer blacklists an employee for any reason, that employer 

is subject to tort liability under S 39-2-803, MCA. 

In order for there to be a valid preemption in this 

case, we must find that blacklisting is protected by the 

NLRA. Section 7 of the NLRA, 29 U.S.C. S 157, relates to 

employee rights to self-organization, to bargain collectively 

and to engage in concerted activities for the purpose of 

bargaining collectively. The applicable provisions of S 8, 

specifically 29 U.S.C. S 8 (a) of the NLRA, define unfair 

labor practices as: restraining or coercing employees in 

exercise of S 7 rights; dominating or interfering with a 

union; d.i.scriminating in regard to hiring and tenure to 

encourage or discourage m.embership in unions; discharging or 

discriminating against an employee because he has filed 

charges or given testimony under the NLRA; refusing to 

bargain collectively. Nothing in these sections refers to 
blacklisting and clearly blacklisting would not be 

investigated by the Roard unless the blacklisting was done 

for some purpose prohibited by the NLRA. Blacklisting for 

any purpose is unlawful in Montana. 

The District Court felt that it should not inquire into 

the reasons for the blacklisting because "arguably" 

blacklisting was subject to the NLRA's proscriptions. In its 

order the District Court said: 

This court is not willing to invade the province of 

the Labor Board by staging an inquiry into 

blacklisting, this supposed list of electricians 

who were allegedly disapproved of and subsequently 

boycotted for, as yet, unknown reasons when they 

sought employment with the defendants. 

No one in this litigation contends that plaintiffs were 

blacklisted for labor-related activities. The reason for the 

blacklisting is unknown. Blacklisting per se is unlawful 

under Montana law, 5 39-2-803, MCA. 

Plaintiffs argue that preemption is not called for 

because: 

1. The underlying conduct, blacklisting, is not 

protected under the NLRA; 

2. There is an overriding state interest in protecting 

citizens from blacklisting and it's consequent harm. This 

interest has been manifested in a statute awarding punitive 

damages for blacklisting. 

3. There is no risk that this cause of action, in tort, 

will affect national labor policy. 

We find plaintiffs' argument compelling in light of the 

recent decision of the 9th Circuit Court of Appeals in 

Garibaldi v. Lucky Food Stores, Inc. (9th Cir. 1984), 726 

Garibaldi was employed by Lucky Food Stores as a truck 

driver until his discharge in October, 1980. Garibaldi filed 

an action in state court in California alleging he was 
wrongfully discharged for "whistle blowing." The case was 

removed to federal court a-nd the Federal District Court held 

that his discharge was preempted by the National Labor 

Management Relations Act. The Circuit Court of Appeals 

reversed and established guidelines for preemption which 

allow plaintiffs' claims in this case to go forward. 

In Garibaldi, supra, the Ninth Circuit placed. great 

emphasis upon a balancing of state and federal interests. 

The court quoted from the United States Supreme Court 

decision in Farmer, supra, wherein the Court stated: 

Our cases indicate, however, that inflexible 

application of the doctrine [of preemption in 

industrial relations] is to be avoided, especially 

where the State has a substantial interest in 

regulation of the conduct at issue and the State's 

interest is one that does not threaten undue 

interference with the federal regulatory scheme. 

Garibaldi, 726 F.2d at 1373, quoting Farmer, 430 U.S. at 302, 

S.Ct. at 1064, 51 L.Ed.2d at 351. 

The Ninth Circuit acknowledged that the United. States 

Supreme Court carefully tailored its holding to situations 

where the defendant1 s conduct was outra.geous and 

"particularly abusive." The Garibaldi court expanded the 

"violence" exception to embrace wrongful discharge conduct 

amounting only to a violation of California's public policy. 

While the discharge of Garibaldi may have constituted an 

unfair labor practice, yet it was significant that California 

had a paramount interest in regulating violations of public 

policy within its state. The court in Garibaldi, 726 F.2d at 

1374, said: 

Thus, it is clear that California's interest in 

providing a cause of action for violation of public 

policy or a statute is the enforcement of the 

underlying statute or policy, not the regulation of 

the employment relationship. 

Certiorari to the United States Supreme Court was denied at 
The case at bar is similar. Blacklisting per se is 

proscribed in Montana. The statute does not seek to regulate 

the relationship between the employer and the employee. 

Neither does the statute seek to regulate unfair labor 

practices treated in 5 7 or 5 8 of the NLRA, 29 U.S.C. 55 157 

and 158. 

We find the rationale in Garibaldi to be persuasive and 

adopt it as the basis for our decision here. The court said: 

A claim grounded in state law for wrongful 

termination for public policy reasons poses no 

significant threat to the collective bargaining 

process; it does not alter the economic 

relationship between the employer and employee. 

The remedy is in tort, distinct from any 

contractual remedy an employee might have under the 

collective bargaining contract. It furthers the 

state's interest in protecting the general 

public--an interest which transcends the employment 

relationship. (Citation omitted.) 

Garibaldi, 726 F.2d at 1375. 

The act of blacklisting per se does not constitute an 

unfair labor practice. Blacklisting sounds in either (1) 

intentional infliction of mental or emotional distress or (2) 

tortious interference with prospective or present contractual 

relationships. However, in light of the provisions of 

S 39-2-803, MCA, blacklisting itself constitutes tortious 

conduct giving rise to a civil remedy. We therefore hold 

that federal preemption does not exist. 

There is not an exhaustion question in this case. 

Administrative remedies are in the federal system. We here 

have an action grounded in tort under state law. The conduct 

complained of is, as we have held, not subject to NLRA 

proscription. The tortious conduct complained of in state 

court has no exhaustion component. 

Our holding that plaintiffs' claim constitutes a tort 

under state law requires the application of the three year 

statute of limitations applicable to tort actions in Montana, 

27-2-204, MCA. Because no specific statute of limitations 
is provided under state law for blacklisting, the tort of 

blacklisting is covered by the general tort statute of 

limitations and of course the same would be true for actions 

grounded in intentional. infliction of mental distress and 

tortious interference with contractual relationships. This 

cause was filed within two years of the incidents in question 

and is timely. 

We reverse and remand for trial in accordance with the 

views herein expressed. 

We concur: 

Chief Justice 
Mr. Justice L. C. Gulbrandson dissenting. 

I respectfully dissent. 

The majority holds that the conduct complained of is not 

subject to NLRA proscription. In effect, an exception to the 

preemption requirement has been created by labeling the 

action as one in tort under state law. An opposite result 

was reached in Campbell v. McLean Trucking Company (E.D.N.Y., 

1984), 592 F.Supp. 1560, 1564, where the court stated: 

A mere labeling of the conduct complained. 

of, however, does not satisfy the requirements necessary to avoid preemption. 

The Supreme Court in Lockridge, 403 U.S. 

at 292, 91 S.Ct. at 1920, said that it is 

the conduct and not the legal description 

that is important. This substance-form 

problem was recognized, for example, i.n 

Breitegger v. C.B.S., 43 Cal.App.3d 283, 

117 ~al.~~ty 699, 706 (1974), where an 

unfair labor practice within the Board's 

jurisdiction was not cognizable in State 

court merely by 1a.beling it an intentional tort. 

Section 8 of the NLRA clearly prohibits employment discrimination, and blacklisting is recognized as an unfair labor 

practice. 

Further, as indicated by Mount Desert 

Island Hospital and contrary to plaintiffs' State tort characterization, 

blacklisting has long been recognized as 

an unfair labor practice and, thus, 

prohibited by the Act. See NLRB v. 

Waumbec Mills, 114 F.2d 226,732-F(lst 

Cir. 1940) ; Cone Bros. Contracting - Co. , 135 N.L.R.B. 108 (1962). In short, - at 

- the least, plaintiffs' claim one is 

"'arguably subject to . . . the Act' . . . [citation omitted1 . . . and therefore come[s] within the primary jurisdiction of the . . . Board . . . ." Abrams 

- v. Carrier Corp., 434 F.2d 1234, 1253 (2d 

Cir.1970), cert. denied, 401 U.S. 1009, 

91 S.Ct. 1253, 28 L.Ed.2d 545 (1971). 

(Emphasis in original.) 

Campbell, supra, 592 F.Supp. at 1563. 

The majority opinion contains the following statement: 

No one in this litigation contends that 

plaintiffs were blacklisted for 

labor-related activities. 
In fact, plaintiff's counsel, in his brief filed Zuly 5, 

1984, with the trial court, declared as follows: 

When this case was presented to the 

Board, plaintiffs had to raise and prove 

to the Board that defendants' maintenance, circulation and other use of the 

blacklist was for the purpose of discriminating against plaintiffs for activites 

[sic] rela.ting to self-organization, 

collective bargaining, concerted actions 

or union affilitations [sic]. 29 USC 

S158 (a) (1) and (3). 

I also note that Local 768, International Brotherhood of 

Electrical Workers, is a party plaintiff in this action. 

I agree with the trial court's determination that the 

first issue to be decided. is whether blacklisting occurred, 

and if so, for what reasons. That issue is arguably within 

the jurisdiction of the NLRB and that Board should. be allowed 

to exercise its remesial authority if blacklisting activity 

is found. The trial court, in dismissing the ca.use conditionally without prejud.ice, clearly would entertain the 

plaintiff's action in tort if the NLRB found that hlacklisting occurred. 

I join in the foregoj..ng dissgnt of Mr. Justice L. C. 

Gulbrandson. 

Justice