Court Opinion

ID: 8293346
Source: CourtListenerOpinion
Date Created: 2022-10-17 10:54:09.421422+00
Date Added: 2024-06-11T16:43:55.921401
License: Public Domain

CURETON, Judge
(dissenting):
I respectfully dissent from the majority’s holding and conclude that neither the LMRA nor ERISA preempts Lewis’s cause of action. I also would hold that Lewis’s allegations properly state a cause of action under South Carolina’s Right to Work Act, S.C.Code Ann. § 41-7-10 et. seq. (1986).
I. LMRA PREEMPTION
Section 301 of the LMRA is the provision authorizing actions based on contracts between employers, unions, local unions, and employees. In order for an action to fall within the purview of § 301, it must either be: (1) an action for violations of a contract between an employer and a labor organization which represents employees in an industry affecting commerce, or (2) an action for violations of a contract between such labor organizations. Wooddell v. Int'l Bhd. of Elec. Workers, 502 U.S. 93, 98, 112 S.Ct. 494, 498, 116 L.Ed.2d 419 (1991). Admittedly, the reach of § 301 preemption is broad. Because of concern about conflicting interpretations of labor-oriented contracts, § 301 preempts state law claims if “the resolution of the state law claim depends upon the meaning of a collective bargaining agreement.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 405-6, 108 S.Ct. 1877, 1881, 100 L.Ed.2d 410 (1988). See also Hayden v. Reickerd, 957 F.2d 1506 (9th Cir.1992) (noting that preemption is appropriate only when provisions of a § 301 contract must be interpreted). The proper test for § 301 preemption asks:
... whether the [state-law cause of action] confers nonnegotiable state-law rights on employers or employees indepen*433dent of any right established by contract, or, instead, whether evaluation of the [state law] claim is inextricably intertwined with consideration of the terms of the labor contract. If the state tort law attempts to define the meaning of the contract relationship, that law is preempted.
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213, 105 S.Ct. 1904, 1912, 85 L.Ed.2d 206 (1985), cited in Nash v. AT & T Nassau Metals, 298 S.C. 428, 381 S.E.2d 206 (1989). However, “not every dispute concerning employment, or tangentially involving a provision of the collective bargaining agreement, is pre-empted by § 301 or other provisions of federal labor law.” Lueck, 471 U.S. at 211, 105 S.Ct. at 1911. The United States Supreme Court also has held that union constitutions are contracts between labor organizations under § 301, so the above stated preemption rules apply to interpretation of union constitutions as well as interpretation of collective bargaining agreements. Cf. Wooddell, 502 U.S. at 98-101, 112 S.Ct. at 498-500 (holding that a union member may sue a local union for violation of the national union’s constitution);1 United Ass’n of Journeymen and Apprentices of the Plumbing and Pipefitting Indus. v. Local 334, 452 U.S. 615, 101 S.Ct. 2546, 69 L.Ed.2d 280 (1981) (extending the jurisdictional reach of § 301 to union constitutions).
However, Lewis’s claim that the local union’s actions violated the South Carolina Right to Work Act does not present a case which falls under the admittedly broad preemption doctrine pursuant to § 301. First, the right to work statute cannot be superseded by agreement; the rights created therein are non-negotiable and thus meet that portion of the Lueck test. See S.C.Code Ann. § 41-7-10 el seq. (1986) (stating that violations of the statute are against the public policy of South Carolina). Second, Lewis does not allege any sort of claim that the local union violated the IBEW constitution. Thus, Lewis’s claim is not based directly on rights created by the union constitution; instead, it is based on rights created by South Carolina’s right to work law. Third, Lewis’s claim does not depend on any sort of interpretation of the union constitution. The record does not reflect any dispute among the *434parties at trial as to the only issues that could possibly involve interpretation of the union’s constitution: (1) whether United Electrical was properly determined to be in difficulty, (2) whether Lewis was fined and suspended in accordance with the union’s rules and constitution, and (3) whether Lewis eventually would have been entitled to pension benefits but for his membership lapse.2 Thus, § 301 preemption is not applicable.
The majority contends that § 301 preempts Lewis’s action because the union’s constitution must be interpreted to determine whether Lewis had a property interest in pension benefits at the time of the union’s alleged wrongful actions. However, the pension benefits are only referred to in this action as a measure of Lewis’s damages, and it is undisputed that Lewis, had he continued his membership of 38 years, would have been entitled to benefits upon his retirement but for the actions by the local union. Moreover, whether Lewis had a property interest in the pension benefits is irrelevant to the use of his expectancy in the benefits as a yardstick to measure his damages. Lewis does not have to show a property interest in the pension benefits in order to claim the loss of them as the measure of damages.3 See Midgett v. Sackett-Chicago, Inc., 105 Ill.2d 143, 85 Ill.Dec. 475, 480, 473 N.E.2d 1280, 1285 (1984), cert. denied, 474 U.S. 909, 106 S.Ct. 278, 88 L.Ed.2d 243 (1985) (holding that a plaintiff may claim loss of unvested pension benefits as a element of damages in a workers’ compensation retaliatory discharge case). See also 22 Am. Jur.2d Damages § 115 (1988). In any event, mere reference *435to or consideration of the terms of a union constitution is not the equivalent of interpreting the meaning of the terms. Ramirez v. Fox Television Station, Inc., 998 F.2d 743, 749 (9th Cir.1993) (holding that the provisions relating to promotion in a collective bargaining agreement did not require preemption of an action based on discrimination in promotion). Thus, Lewis’s right to work action does not require an interpretation of the terms of the union constitution. I would hold that § 301 of the LMRA does not preempt Lewis’s claim. Cf. Baldwin v. Pirelli Armstrong Tire Corp., 927 F.Supp. 1046 (M.D.Tenn.1996) (holding that for purposes of removal, § 301 does not completely preempt a retaliatory discharge claim based on the Tennessee right to work statute).
II. ERISA PREEMPTION
I would also hold that ERISA does not preempt Lewis’s right to work claim. Congress expressly enacted a provision which preempts any state cause of action which “relate[s] to” an employee benefit plan, and the United States Supreme Court has held that the “relate to” phrase should be given a broad, common sense meaning as “connection with or reference to.” 29 U.S.C. § 1144(a); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). However, the United States Supreme Court recently held that “relate to” cannot “extend to the furthest stretch of its indeterminacy,” and that a court should “look instead to the objectives of the ERISA statute as a guide to the scope of state' law that Congress understood would survive.” New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 656, 115 S.Ct. 1671, 1677, 131 L.Ed.2d 695 (1995), cited in Medical Park OB/GYN v. Ragin, 321 S.C. 139, 467 S.E.2d 261 (Ct.App.1996). Congress intended ERISA to set the standards of conduct, responsibilities, and obligations for plan fiduciaries. 29 U.S.C. § 1001(b). Congress further intended the preemption clause to “avoid a multiplicity of regulation in order to permit the nationally uniform administration of employee benefit plans.” Travelers, 514 U.S. at 657, 115 S.Ct. at 1677-78.
In interpreting the ERISA preemption statute, a number of courts have applied these standards to hold that mere reference to pension benefits as a measure of damages is not *436enough for a state cause of action to “relate to” the employee benefit plan. In Pizlo v. Bethlehem Steel Corp., 884 F.2d 116 (4th Cir.1989), employees sued their employer for terminating them after the employer allegedly represented that it would not fire any employee before the age necessary to avoid an early retirement penalty. The Pizlo court held that ERISA did not preempt the employees’ claims for breach of contract, promissory estoppel, and negligent misrepresentation. In doing so, the court stated:
The claims here would not submit [the employer] to “conflicting employer obligations and variable standards of recovery”, “determine whether any benefits are paid” nor “directly affect the administration of benefits under the plan.” The claims do not bring into question whether Plaintiffs are eligible for plan benefits, but whether they were wrongfully terminated from employment after an alleged oral contract of employment for a term. In their state law claims, the Plaintiffs seek from the corporation compensatory damages for wages and pension, health, life and disability benefits that they would have been entitled to had the alleged contract to work until age 62 not been breached. If the Plaintiffs prevail, the damages would be measured in part by the lost pension benefits the Plaintiffs would have received, but the pension trust itself would not be liable and the administrators of the pension plan would not be burdened in any way.
Pizlo, 884 F.2d at 120-21 (citations omitted). In Hospice of Metro Denver, Inc. v. Group Health Ins. of Oklahoma, Inc., 944 F.2d 752 (10th Cir.1991), a hospice sued an insurer on a promissory estoppel theory because the insurer refused to pay a claim after repeatedly assuring the hospice that payment would be forthcoming. Similarly, the Hospice court held that ERISA does not preempt the hospice’s cause of action. In doing so, the Hospice court stated:
Hospice has not alleged any conduct on the part of [the insurer] which relates to the administration of the plan, to the processing of any covered claim, or which impinges on any employee’s ERISA rights____ [M]erely because [Hospice’s] damages would be based upon the amount of potential plan benefits does not implicate the administration of the plan, and is not consequential enough to connect the *437action with, or relate the action to, the plan. The payment of the judgment would be a one time, lump-sum amount and would not further burden the plan, either financially or administratively____ An action brought by a health care provider to recover promised payment from an insurancé carrier is distinct from an action brought by a plan participant against the insurer seeking recovery of benefits due under the terms of the insurance plan. Preemption in this case would stretch the “connected with or related to” standard too far. Therefore, we hold that Hospice’s action is not preempted by ERISA.
Hospice, 944 F.2d at 755-56 (emphasis added) (citations omitted).4 Admittedly, Hospice does not involve suit by former beneficiaries of a ERISA plan, but Pizlo does. Both cases hold unequivocally that ERISA does not preempt state causes of action merely because damages are measured by lost benefits. See also Howard v. Indiana Michigan Power Co., 812 F.Supp. 135 (S.D.Ind.1992) (finding no ERISA preemption when the pension benefits relate to damages, not liability); Schlenz v. United Airlines, Inc., 678 F.Supp. 230 (N.D.Cal.1988) (holding that ERISA does not preempt a wrongful discharge claim because the damage award, which is based partly on lost employee benefits, will be nothing more than a one-time lump-sum payment triggered by employer’s conduct); Totton v. New York Life Ins. Co., 685 F.Supp. 27 (D.Conn. 1987) (ruling that ERISA does not preempt claim for breach of an employment contract even though lost pension benefits are sought as damages, in part because the plan will not pay the one-time lump-sum judgment). Cf. Morstein v. National Ins. Serv., Inc., 93 F.3d 715 (11th Cir.1996) (en banc) (holding that ERISA does not preempt a company president’s suit *438against an insurance agent for fraudulently and negligently inducing her to purchase a replacement policy with a preexisting condition clause); Custer v. Sweeney, 89 F.3d 1156 (4th Cir.1996) (holding that ERISA does not preempt a legal malpractice claim against an attorney concerning his representation of an employee benefit plan because the claim does not affect “the structure, the administration, or the type of benefits provided by the ERISA plan”).5
In this case, Lewis’s claim involves none of the ERISA concerns, and his claim clearly falls within the persuasive holdings in Pizlo, Hospice, and the myriad of federal district court cases. Lewis’s action does not raise the potentiality of conflicting regulation of an ERISA plan. Lewis does not attempt to subject the plan or its administrator to any liability, and he does not allege any conduct “which relates to the administration of the plan, to the processing of any covered claim, or which impinges on [his] ERISA rights.” Hospice, 944 F.2d at 755. He does not claim that, pursuant to the plan, he is a beneficiary who was unfairly prevented from claiming his benefits. Instead, Lewis claims that Local 382 of the *439IBEW unlawfully attempted to prevent him from working for United Electrical, Inc., and that, merely as a result, Lewis lost his membership and pension benefits. Lewis does not deny that he is no longer a beneficiary under the terms of the union’s pension plan. Thus, there is a distinction between one who claims as an actual beneficiary under an employee benefit plan, and one who claims as a nonbeneficiary “whose damages might be measured by the plan’s formula.” Howard, 812 F.Supp. at 137. Moreover, these damages will be paid by the local union in a one-time lump-sum payment, and not by the plan in pension-style monthly installments. For the foregoing reasons, I would hold that Lewis’s right to work claim is not preempted by ERISA.
III. RIGHT TO WORK ACT
The majority holds that the right to work act cannot be interpreted broadly enough to encompass Lewis’s claim. I disagree pursuant to the South Carolina Supreme Court’s precedent in Layne v. International Bhd. of Elec. Workers, Local 882, 271 S.C. 346, 247 S.E.2d 346 (1978). Layne involved an extraordinarily similar factual situation in which a former union member claimed he lost “the benefit of monies paid [the union] over thirty-five years” because the union expelled him for working on a job with non-union members.6 Layne clearly held that Layne stated a cause of action pursuant to the right to work act. Id. Admittedly, Layne held that the tortious violation was the “attempt to coerce the plaintiff from engaging in the particular employment by means of threatening his expected retirement benefits.”7 Id. at 350, *440247 S.E.2d at 348. However, even if Layne is read as suggested by the majority, and even if Lewis did not have a vested interest in the pension benefits, there was certainly “intimidation ... directed against [Lewis’s] person or property” in the union’s actions and fine of $2,000 levied against him. S.C.Code Ann. § 41-7-70 (1986). In any event, Layne does not hold that a threatening of vested benefits is necessary in order for a plaintiff to state a right to work tort; in fact, the court refers to Layne’s “expectancy of retirement benefits.” Layne, 271 S.C. at 350, 247 S.E.2d at 348. Therefore, I would hold that Layne clearly supports Lewis’s cause of action pursuant to the right to work act.
IV. CONCLUSION
I would hold that neither the LMRA nor ERISA preempts Lewis’s claim. I would further hold that Lewis stated a cause of action pursuant to the South Carolina Right to Work Act. Thus, I would affirm the jury’s verdict against the local union.

. I agree with the majority that Wooddell would change the result in Nichols v. Amalgamated Clothing and Textile Workers Union, 305 S.C. 323, 408 S.E.2d 237 (1991).

. There was testimony at trial about the proper procedure for putting an employer "in difficulty" with the union. However, the record reflects no conflicting testimony about whether the union properly put Lewis’s employer “in difficulty.”

. The majority distinguishes Layne v. International Bhd. of Elec. Workers, Local 382, 271 S.C. 346, 247 S.E.2d 346 (1978), because Layne involved a demurrer which required the court to accept the allegations in the pleadings as true. However, since I would hold that Lewis did not need to prove his pension benefits had vested in order to claim them as a measure of damages, I would further hold that Layne is applicable and binding. In any event, the Layne opinion is unclear as to whether Layne’s benefits had vested, and the court referred to the “plaintiff’s expectancy of retirement benefits.” Id. at 350, 247 S.E.2d at 348 (emphasis added). Moreover, Lewis argues there are other elements of the damages award, i.e. emotional distress, humiliation, etc.

. In Baker Hospital v. Isaac, 301 S.C. 248, 391 S.E.2d 549 (1990), the South Carolina Supreme Court held that ERISA preempted a hospital’s contract, promissory estoppel, negligence, and misrepresentation claims. Like Hospice, the hospital sued after the insurer promised that a patient was covered, and then the insurer refused to pay. Id. However, Isaac’s finding of preemption was based on stipulations by the parties at oral argument that ERISA preempted the common-law causes of action. Id. Isaac also noted that it followed the "clear majority rule.” Id. In this case, however, the parties disputed preemption. This case also occurs after the trend to narrow ERISA preemption in Hospice, Travelers, and the other authorities cited. Therefore, I do not think that Isaac changes the reasoning in this dissent.

. In Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990), the United States Supreme Court held that ERISA preempted an employee's claim that, four months before his benefits vested, his employer fired him with the express purpose to avoid "contributing to or paying [employee] benefits." However, IngersollRand is distinguishable from the present case. In Ingersoll-Rand, the preempted claim was that the employer’s principal reason for termination was to prevent vesting of benefits. The Supreme Court held the claim was preempted partly because an action pursuant to ERISA § 510 already exists for “interfering with [the] attainment of any right ... under the plan." Ingersoll-Rand, 498 U.S. at 142-43, 111 S.Ct. at 485. However, Lewis does not allege that the union's activities were for the express purpose of preventing him from claiming his benefits; thus, his action does not fall within either the Ingersoll-Rand rule or ERISA § 510. See Howard v. Indiana Michigan Power Co., 812 F.Supp. 135, 137-38 (S.D.Ind.1992); Tippett v. Old Kent Bank, 134 F.R.D. 159, 160-61 (W.D.Mich.1991) (both cases distinguishing Ingersoll-Rand on this basis, in employee claims for lost pension benefits as damages). Unlike Ingersoll-Rand, the court's inquiry in this case does not have to be directed toward the plan as to whether the union had a legitimate or pension-defeating motive. Finally, Ingersoll-Rand was decided before the Supreme Court’s narrowing of ERISA preemption in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995). After Travelers, I do not think the Supreme Court would extend Ingersoll-Rand to the present situation.

. The Layne court interpreted Layne’s claim of damage as "inferentially the loss of the expectancy of drawing retirement benefits____” Layne, 271 S.C. at 349, 247 S.E.2d at 348.

. As noted before, termination of an employee or union member for the express purpose of preventing the vesting of benefits might be preempted under Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990). However, there is an obvious difference between the Ingersoll-Rand -type situation of a primary motive to terminate someone in order to prevent vesting, and the Layne-type situation of attempting to use pension benefits as leverage in order to achieve compliance with union rules or decisions. The former situation involves an economic decision to avoid ultimately having to pay benefits by firing shortly before vesting; however, in the latter situation *440the union or employer ordinarily would not care if a compliant beneficiary obtained his benefits. Therefore, even Layne's statement of that case’s tort is not preempted.