Opinion ID: 2581073
Heading Depth: 1
Heading Rank: 6

Heading: Preemption Is Mandated Where Resolution of the Employees' Claim Is Based on an Interpretation of the Collective Bargaining Agreement

Text: The majority's erroneous view that use of a per hour formula to induce ratification ipso facto triggers the MWA misinterprets the necessary step of calculating the regular rate at which [the employee] is employed, the threshold inquiry for determining how much overtime compensation is owed. See supra pp. 110-11. To answer this inquiry we must examine the two pertinent collective bargaining agreements which governed the relationship between Todd and its employees to determine whether the payment clause at issue modified the collective bargaining agreement which governed the wage rates. Such examination, however, is forbidden by federal law.
Section 301 of the Labor Management Relations Act (LMRA) [9] (hereinafter Section 301) preempts an employee's state law claim if resolution of the claim hinges on the court's interpretation of a CBA. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988). Preemption in this context means the employee's claim is governed by the terms of the CBA and must be resolved by resorting to federal rules of law to interpret the CBA, which would generally occur under the CBA's arbitration procedures. Id. at 404, 411 & n. 11, 108 S.Ct. 1877. [10] In Lingle the plaintiff brought a retaliatory discharge claim based on Illinois law after the employer terminated her for allegedly filing a false workers' compensation claim. Id. at 401, 108 S.Ct. 1877. In addition to the state law remedy, the CBA which governed the plaintiff's employment provided a separate remedy for retaliatory discharge. Id. at 402, 108 S.Ct. 1877. The Seventh Circuit Court of Appeals held the claim was preempted, but the United States Supreme Court reversed, holding the state law claim was not preempted even though it arose out of the same facts as her claim under the CBA. Id. at 402-03, 408-410, 108 S.Ct. 1877. The Court held: [I]f the resolution of a state-law claim depends upon the meaning of a collective-bargaining agreement, the application of state law (which might lead to inconsistent results since there could be as many state-law principles as there are States) is pre-empted and federal labor-law principles  necessarily uniform throughout the Nation  must be employed to resolve the dispute. Id. at 405-06., 108 S.Ct. 1877 In Commodore v. University Mechanical Contractors, Inc., 120 Wash.2d 120, 130-31, 839 P.2d 314 (1992), we first considered the scope of Lingle to hold interpretation of a CBA is not necessary, thereby preventing Section 301 preemption, if the Washington right allegedly violated is either a nonnegotiable right or an independent negotiable right. In so doing we reversed a trial court's dismissal of an employee's racial discrimination claim, reasoned the employee's claim based on his statutory right to be free from racial discrimination in the workplace [11] could have been brought in the absence of a CBA. Id. at 132, 839 P.2d 314. [12] The majority holds Hisle's MWA claims are not preempted because it involve[es] the nonnegotiable state right to overtime. Majority at 114. This conclusion oversimplifies the case. Certainly any employee is entitled to overtime compensation so long as he or she is not exempted from the overtime requirement. See RCW 49.46.130(2). But simply because a nonnegotiable right is involved does not displace the necessity to interpret the CBA at issue to resolve the claim. Lingle expressly recognized such a scenario: Petitioner points to the fact that the Illinois right to be free from retaliatory discharge is nonnegotiable and applies to unionized and nonunionized workers alike. While it may be true that most state laws that are not pre-empted by § 301 will grant nonnegotiable rights that are shared by all state workers, we note that neither condition ensures nonpre-emption. It is conceivable that a State could create a remedy that, although nonnegotiable, nonetheless turned on the interpretation of a collective-bargaining agreement for its application. Such a remedy would be pre-empted by § 301. Similarly, if a law applied to all state workers but required, at least in certain instances, collective-bargaining agreement interpretation, the application of the law in those instances would be pre-empted. Lingle, 486 U.S. at 408, 108 S.Ct. 1877 n. 7. [13] This case does not concern whether these employees are entitled to overtime benefits required under RCW 49.46.130(1), as the issue is not whether their employment exempts them from application of the statute's overtime requirements. See RCW 49.46.130(2). An example of such a case would involve an employee's MWA lawsuit that queried the court whether or not the employee was a [s]easonal employee[ ] who [is] employed at concessions and recreational establishments, RCW 49.46.130(2)(d), or was exempted pursuant to RCW 49.46.010(5), RCW 49.46.130(2)(a). Preemption would be completely inappropriate in those cases, as was true in both Lingle and Commodore. To the contrary Hisle's claim turns on the critical question of what the mutually negotiated wage was between Todd and Todd's employees. Determination of this wage turns on an interpretation of the CBA in question, which is illustrated by the majority's justification in addition to its hourly rate rationale to apply the MWA to this payment. The majority claims the payment is subject to the MWA overtime requirements because the 1997 CBA makes no indication that the payment is a ratification inducement [and] lists the hourly retroactive payment increases under the heading `Wage and Fringe Increase.' Majority at 113 (quoting Clerk's Papers (CP) at 232). This rationale assumes the parties' failure to include the precise nomenclature ratification inducement signals their intent to increase the regular rate at which [the employee] is employed. RCW 49.46.130(1). Moreover the majority assumes the specific location of the clause under the heading `Wage and Fringe Increase', CP at 232, implies contractual intent to alter the employees' regular rate, as if locating the clause under another heading would change the substantive effect of the contractual language. For example, if this clause had appeared under section 3.5, entitled Seniority, CP at 214, would this payment apply only to those employees with seniority despite clear language indicating payment should be made to  all non-Washington State Ferry Project employees that were actively employed on the execution date of the contract or had seniority rights as of the execution date of the contract, CP at 232 (emphasis added)? I doubt it. But regardless of how that question should be answered, the analysis to resolve the inquiry rests on interpreting the provision. This is precisely what Section 301 prohibits. Lingle, 486 U.S. at 413, 108 S.Ct. 1877. Because this case does not involve an inquiry into whether Todd's employees are entitled to overtime  a proposition no one disputes  but instead whether a certain payment modified the determinative factor needed to calculate how much overtime is owed, i.e., regular rate at which [the employee] is employed, RCW 49.46.130(1), we are forced to examine and interpret the CBA. Federal law therefore preempts Hisle's claim.
Though interpretation of the CBA is forbidden under Section 301, the facts of this case demonstrate the regular rate of pay which governed the relationship during the pertinent time frame did not increase. Prior to execution of the 1997 CBA the relationship between Todd and its employees was governed by a previously executed and ratified CBA that took effect in 1993 (1993 CBA). The 1993 CBA established standard wages which increased annually and varied according to the respective job, as specified in wage scales on which the employee's compensation was based. CP at 34; see also CP at 48 (Schedule A wage scale). For example as of April 1, 1996, a Carpenter Journeyman made $15.25 per hour, an Op Engineer Journeyman made $15.85 per hour, and a Laborer-On Shipboard Work made $14.25 per hour, to name a few. See CP at 48. Wages also increased every three months commensurate with cost of living changes. See CP at 44. Though the 1993 CBA was set to expire by its terms on July 31, 1996, it was to continue in full force ... from and for year to year thereafter, unless either party shall ... notify the other party in writing of any desire to make changes in or to terminate this Agreement.  CP at 47 (emphasis added). Thus, until the new CBA was executed and took effect, the 1993 CBA between Todd and its employees governed the relationship, rights, and  most importantly  wages. Negotiations for a replacement CBA commenced in February 1996 but did not finalize until the arbitrator's order resolving the impasse between Todd and PSTMC, resulting in the execution of the 1997 CBA which by its own terms did not take effect until late November 1997. [14] Thus the operative CBA prior to that effective date was the 1993 CBA. To sustain the majority's position, therefore, one must conclude the one-time payment modified the 1993 CBA and the hourly rates it established. The basis for this alleged modification of the wage rates as enumerated in the 1993 CBA provides as follows: Wage and Fringe Increase Effective 8-1-98 $.61/hour Wage/Fringe This increase will be applied to all Schedule A rates listed above except Firewatch. Retroactive payments of $.60 for each non-Washington State Ferry Project attendance hour from August 1, 1996 until the execution date of the contract (less applicable employee deductions) shall be made to all non-Washington State Ferry Project employees that were actively employed on the execution date of the contract or had seniority rights as of the execution date of the contract. CP at 232 (emphasis added). The only express language alluding to a wage increase appears in the header and the first paragraph referencing the Schedule `A' rates. Id. This undoubtedly references the wage schedule immediately preceding the clause at issue, which lists all of the different positions  and the respective wage thereto  an employee could hold while working for Todd. The ultimate question becomes whether the above quoted provision in the 1997 CBA altered the previously established wages specified in the 1993 CBA. In other words, did the retroactive payment clause cited above increase the wages established under the 1993 CBA by $.60 per hour? For this payment to modify the previous CBA it necessarily would have to apply across the board, meaning every employee whose wages were governed by the 1993 CBA and who worked overtime hours between August 1, 1996 and execution date of the 1997 CBA would be entitled to overtime compensation, regardless of whether those employees were covered by the 1997 CBA. Yet the record suggests the contrary. There is no indication the 1993 CBA applied selectively to one group of employees (those persons still employed when the new CBA was executed), but not others (those persons covered by the 1993 CBA but no longer employed on the execution date the replacement CBA). Counsel for Hisle readily conceded this at oral argument, admitting no employee would be entitled to such retroactive payment  even if that employee worked overtime hours after August 1, 1996  unless the employee was still employed at the time the new CBA was executed. The express language of the retroactive payment clause affirms this, as the only employees entitled to such payment had to be actively employed on the execution date of the contract or had seniority rights as of the execution date of the contract.  CP at 232 (emphasis added). Nevertheless the majority holds this $.60 per hour one-time payment retroactively altered the wages established under the 1993 CBA, despite that agreement's protection of employees until the new CBA was executed. Thus under the majority's holding an employee is denied a raise specified in an allegedly modified CBA despite that agreement's protection of his employment and governance of his regular rate. RCW 49.46.130(1). While both he and his colleagues perform the same services during the same hours for the same employer, only his colleagues are enjoying the fruits of an additional $.60 per hour. This result is unacceptable. The majority's conclusion is also entirely inconsistent with the facts of this case. The bargaining representatives from both sides of this CBA testified the payment was intended to induce the employees to ratify the proposed CBA, not retroactively increase the employees' wages. Michael Marsh, Todd's secretary and general counsel, testified by declaration that: In addition, as an inducement to convince the employees to ratify the tentative agreement, Todd had agreed to pay a lump sum to eligible employees, calculated by multiplying $.60 by each employee's non-Washington State Ferry Project attendance hours (meaning the hours that the employee was at Todd performing work on something other than one of the Washington State ferries) between August 1, 1996 until the contract was executed. CP at 15 (emphasis added). The testimony of Robert Scott, representative for PSTMC, corroborated Marsh's account: Q. This lump sum payment that was paid upon ratification of the  excuse me, not upon ratification but upon the signing of the 1997 contract, did you feel that that was  when that amount was being negotiated that that was necessary to induce the bargaining unit members to vote to ratify the contract? A. Yes. Q. Was that a critical part of your thinking? A. Yes. Like I said, the holidays were coming and people  yeah. CP at 156 (emphasis added). According to Mr. Scott, the payment was made not only to induce ratification, but it was a term necessary to effect ratification. Id. Both representatives expressly rejected the notion the payment was intended to retroactively increase the employees' wages. See CP at 15-16, 153. Nowhere in the record is any indication to the contrary. Because the wage rates provided in the 1993 CBA did not increase by $.60 per hour for every employee protected by that agreement, it in no way altered those employees'regular rate at which [they were] employed. RCW 49.46.130(1). As a matter of law then, the employees were rightfully paid every cent of overtime compensation owed pursuant to the MWA.