Opinion ID: 3043800
Heading Depth: 2
Heading Rank: 2

Heading: Preemption of Breach of Contract Claim

Text: In addition to holding that it had no jurisdiction under Section 301(a), the district court determined sua sponte that Section 301 preempted Miner’s state law breach of contract claim. If the district court determines on remand that no valid CBA existed at the time of Miner’s termination, the issue of whether her breach of contract claim is preempted will arise. Therefore, we address the preemption issue here. Section 301 requires the creation of federal common law that preempts inconsistent state law. Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 104 (1962). Such preemption extends to “claims founded directly on rights created by a CBA and claims substantially dependent on analysis of a CBA.” Clark v. Kellogg Co., 205 F.3d 1079, 1082 n.2 (8th Cir. 2000) (citing Caterpillar Inc. v. Williams, 482 U.S. 386 (1987)). However, “not every dispute concerning employment or tangentially involving a provision of a CBA is preempted by Section 301.” Id. (citing Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985)). Rather, the crucial inquiry is whether “resolution of a state-law claim depends upon the meaning of a [CBA].” 7 We also abstain from addressing Local 373's argument that Miner’s action is barred because she did not exhaust her contractual remedies. It is settled that to bring an action under Section 301(a) an employee first “must exhaust any exclusive grievance and arbitration procedures established under [a] collective bargaining agreement.” Smegal v. Gateway Foods of Minneapolis, Inc., 763 F.2d 354, 358-59 (8th Cir. 1985) (citations omitted). If the lower court determines that the Addenda was invalid, then there were no grievance procedures for Miner to exhaust. If, on the other hand, the lower court determines that the Addenda was valid, Miner should be given the opportunity to exhaust the grievance procedures for which it provides. -15- Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 406 (1988). Without a valid CBA between the Locals, Section 301 does not preempt a claim for breach of an individual employment contract because there is no CBA upon which resolution of a state-law claim can depend. See Derrico v. Sheehan Emergency Hosp., 844 F.2d 22, 27 (2d Cir. 1988) (“[A]fter expiration of the CBA there is no contract subject to section 301 and there can be . . . no[] preemption under section 301.”); cf. Kidd v. Sw. Airlines, Co., 891 F.2d 540, 541, 543-45 (5th Cir. 1990) (claim for breach of supervisor’s employment contract a state law claim and not preempted even though contract allegedly incorporated terms of CBA covering non-supervisor employees).8 8 Neither the lower court nor the parties have addressed whether the NLRA would preempt Miner’s alternative breach of contract claim. Two preemption doctrines have developed under the NLRA. First, Garmon preemption “forbids state and local regulation of activities that are ‘protected by § 7 of the [NLRA], or constitute an unfair labor practice under § 8.’” Bldg. & Constr. Trades Council v. Assoc. Builders & Contractors of Massachusetts, 507 U.S. 218, 224 (1993) (quoting San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244 (1959)). Moreover, “Garmon pre-emption prohibits regulation even of activities that the NLRA only arguably protects or prohibits.” Id. (citing Wisconsin Dep’t of Indus. v. Gould Inc., 475 U.S. 282, 286 (1986)). Such preemption “protects the jurisdiction of the NLRB by displacing state jurisdiction over conduct which is arguably within the compass of § 7 or § 8 of the Act.” Williams v. Watkin Motor Lines, Inc., 310 F.3d 1070, 1072 (8th Cir. 2002) (citations and quotations omitted). Second, Machinists preemption, which is broader than Garmon preemption, “protects against state interference with policies implicated by the structure of the [NLRA] itself, by pre-empting state law and state causes of action concerning conduct that Congress intended to be unregulated.” Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 749 (1985). In other words, Machinists preemption “focuses on protecting the collective bargaining process from interference by the states.” Williams, 310 F.3d at 1072 (referring to Lodge 76, Int’l Ass’n of Machinists & Aerospace Workers v. Wisconsin Employment Relations Comm’n, 427 U.S. 132 (1976)). Here, Miner does not allege a defect in the bargaining process between the Locals that would arguably give rise to NLRB jurisdiction. Moreover, recognizing Miner’s breach of contract claim would not interfere with the collective bargaining (continued...) -16- Accordingly, if on remand the district court determines that the Addenda was not valid at the time of Miner’s discharge, the court should either exercise supplemental jurisdiction or dismiss the breach of contract claim without prejudice. III. CONCLUSION For the reasons stated, we reverse the district court’s grant of summary judgment in favor of defendants and remand for further proceedings consistent with this opinion. ______________________________ 8 (...continued) process. Specifically, assuming that the Locals validly terminated the Addenda and took no actions to negotiate a new CBA, there is no justification for the NLRA to preempt a state law breach of contract claim based upon actions taken by Local 373 and Miner outside of the collective bargaining process. -17-