Court Opinion

ID: 2710494
Source: CourtListenerOpinion
Date Created: 2014-08-05 19:55:07.96059+00
Date Added: 2024-06-11T13:01:42.775053
License: Public Domain

Michigan Supreme Court
                                                                                             Lansing, Michigan
                                                                Chief Justice:         Justices:

Syllabus                                                        Robert P. Young, Jr.   Michael F. Cavanagh
                                                                                       Stephen J. Markman
                                                                                       Mary Beth Kelly
                                                                                       Brian K. Zahra
                                                                                       Bridget M. McCormack
                                                                                       David F. Viviano
This syllabus constitutes no part of the opinion of the Court but has been             Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader.               Corbin R. Davis

                                      HENRY v LABORERS’ LOCAL 1191
                                     RAMSEY v LABORERS’ LOCAL 1191

       Docket Nos. 145631 and 145632. Argued October 8, 2013 (Calendar No. 2). Decided May 5,
       2014.

               Anthony Henry and Keith White brought an action in the Wayne Circuit Court against
       Laborers’ Local 1191 (a labor union that represents construction workers), Michael Aaron (the
       union’s business manager), and Bruce Ruedisueli (the union’s president), alleging that their
       indefinite layoff from employment at the union was unlawful retaliation under the
       Whistleblowers’ Protection Act (WPA), MCL 15.361 et seq. Henry and White had worked as
       business agents for the union until their terminations. They alleged that defendants asked several
       union members to repair the façade of the Trade Union Leadership Council building. The union
       recorded payments for the work as picket duty even though the members did not engage in picket
       duty on those days. Henry and White believed that Aaron was involved in criminal activity,
       including fraud, an illegal kickback scheme, and misappropriation of union funds. They also
       believed that the union had required members to work without proper safety precautions and
       without receiving union wages. Henry circulated an unsigned open letter to the union’s
       leadership and distributed it to the union’s membership, the union’s parent leadership, and local
       news outlets. The letter asked why the union was paying members out of its picket fund to work
       on a for-profit establishment and suggested that Aaron had received illegal kickbacks from the
       council in exchange for providing the council free construction labor. Henry and White
       subsequently contacted the United States Department of Labor with their suspicions and
       informed the union of their decision to report the allegations. The Department of Labor
       investigated the allegations and interviewed several union employees and officials. It referred
       the matter to an assistant United States attorney, who declined to intervene. Aaron later notified
       Henry and White that they had been indefinitely laid off from employment at the union. During
       the pendency of Henry and White’s action, Michael Dowdy and Glenn Ramsey (also business
       agents for the union) were terminated from their employment. Dowdy and Ramsey filed a
       separate WPA action in the Wayne Circuit Court against the union, Aaron, and Ruedisueli,
       claiming that they had been terminated for their cooperation in the Department of Labor’s
       investigation and disclosing to investigators facts substantiating the allegations of criminal
       misconduct. Defendants moved for summary disposition in the Henry/White lawsuit and for
       partial summary disposition in the Dowdy/Ramsey lawsuit, alleging that the Labor-Management
       Reporting and Disclosure Act (LMRDA), 29 USC 401 et seq., preempted plaintiffs’ WPA claims
       and that, as a result, the court lacked subject-matter jurisdiction to hear them. The court, Jeanne
       Stempien, J., denied both motions, concluding that the WPA’s protection of an employee against

                                             ©2014 State of Michigan
an employer’s retaliatory employment actions does not contravene the LMRDA because the
LMRDA only protects from retaliation the rights afforded union members. Defendants appealed
in each case, reasserting their claim of LMRDA preemption and raising the new defense that the
National Labor Relations Act (NLRA), 29 USC 151 et seq., independently preempted the circuit
court from exercising subject-matter jurisdiction. The Court of Appeals, RONAYNE KRAUSE,
P.J., and SAAD and WILDER, JJ., consolidated the appeals and affirmed in an unpublished opinion
per curiam, issued July 3, 2012 (Docket Nos. 302373 and 302710), agreeing that plaintiffs had
not alleged any infringement of their membership rights and that, as a result, the LMRDA’s
protections did not cover their claims. The panel also held that the WPA did not undermine the
LMRDA’s purpose of giving elected union officials the discretion to implement policies that
reflect the wishes of union membership because claims of wrongful discharge for refusing to
commit or aid in committing a crime did not infringe the union leaders’ discretion Finally, the
panel held that the NLRA did not preempt plaintiffs’ claims because a claim for retaliatory
discharge arising out of an employee’s report of suspected illegal activity or participation in an
investigation of it is only of peripheral concern to the NLRA’s purpose of protecting employees’
rights to engage in concerted activities for the purpose of collective bargaining or other mutual
aid or protection. The Supreme Court granted defendants’ applications for leave to appeal. 493
Mich 934 (2013).

     In an opinion by Justice KELLY, joined by Chief Justice YOUNG and Justices CAVANAGH,
MARKMAN, MCCORMACK, and VIVIANO, the Supreme Court held:

        Neither the National Labor Relations Act nor the Labor-Management Reporting and
Disclosure Act preempts Whistleblowers’ Protection Act claims premised on retaliation for
reporting suspected criminal misconduct, and state courts have subject-matter jurisdiction over
those claims.

         1. Preemption is fundamentally a question of congressional intent. Congress can
preempt state law either explicitly or implicitly. In the absence of explicit statutory language,
state law is preempted when it regulates conduct in a field that Congress intended the federal
government to occupy exclusively or when it actually conflicts with federal law. There is no
single formula to apply preemption principles in all contexts. Rather, a court must examine
congressional intent to preempt state law in the specific context of the statute or statutes at issue,
in this case how the WPA operates against the background of the NLRA and the LMRDA.

         2. With respect to the NLRA, § 7 of that act, 29 USC 157, states that employees have the
rights to self-organization; form, join, or assist labor organizations; bargain collectively through
representatives of their own choosing; and engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection. Section 8(a)(1), 29 USC 158(a)(1), states
that it is an unfair labor practice for an employer to interfere with, restrain, or coerce employees
in the exercise of the rights guaranteed by § 7. The NLRA both creates federal rules regarding
labor relations and delegates enforcement of that policy to an administrative agency, the National
Labor Relations Board (NLRB). When an activity is arguably subject to § 7 or § 8 of the act, the
states and the federal courts must defer to the exclusive competence of the NLRB to avert the
danger of state interference with national policy. “Arguably subject” means that the party
asserting preemption must advance an interpretation of the act that is not plainly contrary to its

                                     ©2014 State of Michigan
language and has not been authoritatively rejected by the courts or the board. There are two
related exceptions to preemption of state law regulations that are arguably subject to § 7 or § 8.
The first is when the activity regulated is merely a peripheral concern of the NLRA. The second
is when the regulated conduct touches interests so deeply rooted in local feeling and
responsibility that in the absence of compelling congressional direction, a court could not infer
that Congress had deprived the states of the power to act. Courts must consider whether there
exists a significant state interest in protecting the citizen from the challenged conduct and
whether the exercise of state jurisdiction over the state claim entails little risk of interference
with the regulatory jurisdiction of the NLRB. When the conduct at issue in the state litigation is
arguably prohibited by the NLRA and thus within the exclusive jurisdiction of the NLRB, the
critical inquiry in determining whether an exception applies is whether the controversy presented
to the state court is identical with that which could be presented to the board. When it is
identical, states cannot subject violators to a supplemental sanction for violations of the NLRA.

         3. With respect to the LMRDA, 29 USC 411(a)(2) protects union members’ freedom of
expression and assembly by giving every member the right to meet and assemble freely with
other members; express any views, arguments, or opinions; and express at meetings the
member’s views on any business properly before the meeting. It also gives union members
procedural protections against discipline by the union. When a plaintiff has dual status as both
an employee and a member of the union, the LMRDA only provides protection from discipline
in the member’s capacity as a member, not in his or her capacity as an employee. This limitation
ensures the freedom of elected union leaders to choose staff whose views are compatible with
their own, which is an integral part of the LMRDA’s purpose of ensuring a union
administration’s responsiveness to the mandate of a union election. Because conduct protected
under the LMRDA does not extend to a union member’s rights as an employee, a state-law
retaliation claim brought by a union employee as an employee is preempted to the extent that it
conflicts with the LMRDA’s purposes. Likewise, the LMRDA preempts state law that would
unduly limit the discretion of union officials to select their employees. As a result, when a union
employee brings a state-law retaliation claim as an employee, a court must analyze whether the
claim conflicts with the LMRDA’s purpose and goal of protecting democratic processes in union
leadership. A state-law retaliation claim is not preempted when it does not conflict with the
purposes of the LMRDA. The discretion the LMRDA affords unions to choose their employees
is not limitless. The act does not preempt state wrongful-termination claims in cases in which
elected union officials attempt to use their discretion as a shield to hide alleged criminal
misconduct. Any other conclusion would undermine the explicit purpose of the LMRDA to
eliminate or prevent improper practices on the part of labor organizations, employers, labor-
relations consultants, and their officers and representatives. In fact, protecting union employees
from retaliation when they raise claims of criminal wrongdoing helps to protect the interests of
rank-and-file union members and safeguard union democracy and, as a result, achieve the
purposes of the LMRDA.

        4. The WPA specifically regulates an employer’s retaliation against employees who
report a violation or suspected violation of law. MCL 15.362 provides that an employer shall not
discharge, threaten, or otherwise discriminate against an employee regarding the employee’s
compensation, terms, conditions, location, or privileges of employment because the employee
reports or is about to report a violation or a suspected violation of a law or regulation or rule to a

                                     ©2014 State of Michigan
public body or because an employee is requested by a public body to participate in an
investigation, hearing, or inquiry held by that public body or a court action.

        5. When assessing claims of NLRA preemption, it is the conduct being regulated, not the
formal description of governing legal standards, that is the proper focus. The specific conduct
plaintiffs alleged in their WPA claims is that defendants unlawfully retaliated against them for
reporting suspected wrongdoing to the Department of Labor. Plaintiffs’ allegations of
wrongdoing fell into two general categories: (1) improper working conditions (that workers were
paid unfairly and were not provided with necessary safety precautions) and (2) criminality (that
defendants were engaged in fraud, embezzlement, and misuse of union funds). Basic to the right
guaranteed to employees in § 7 of the NLRA to form, join or assist labor organizations is the
right to engage in concerted activities to persuade other employees to join for their mutual aid
and protection. The mutual-aid-or-protection clause in § 7 protects employees from retaliation
by their employers when they seek to improve working conditions through resort to
administrative and judicial forums, among other activities intended to improve working
conditions. Similarly, the relevant inquiry when examining whether activity is concerted is
whether the employee acted with the purpose of furthering group goals.

        6. The NLRA preempted plaintiffs’ WPA claims related to improper working conditions.
Plaintiffs unquestionably acted with the purpose of furthering group goals when they disputed
the working conditions for union members. Their claims of unfair wages and an unsafe work
environment were prototypical issues of dispute under the NLRA. Therefore, plaintiffs’ conduct
to improve unfair wages and an unsafe work environment was arguably protected under § 7 of
the NLRA, and § 8 specifically prohibited defendants from retaliating against plaintiffs for
engaging in conduct protected under § 7. Neither of the two exceptions to NLRA preemption
applied to plaintiffs’ concerted activity regarding working conditions because those conditions
are of central, not peripheral, concern to the NLRA’s purposes. Because this protection has been
central to the NLRA’s purposes for nearly 80 years, the more recent attempt of the WPA to
regulate retaliation for an alleged unfair labor practice does not touch interests so deeply rooted
in local feeling and responsibility that a court could not infer that Congress intended the NLRB
to have exclusive jurisdiction over a state whistleblower claim arising out of complaints
regarding an employer’s improper working conditions.

         7. The NLRA did not preempt the WPA with respect to plaintiffs’ claims alleging
retaliation for reporting defendants’ criminal wrongdoing. While the NLRA regulates
employees’ concerted activities for their mutual aid or protection, it does not regulate the
reporting of federal and state crimes. Section 7 is not so broad that it protects all concerted
activities by employees. At some point the relationship between the concerted activity and the
employees’ interests as employees becomes so attenuated that an activity cannot fairly be
deemed to come within the mutual-aid-or-protection clause. The allegations of criminal
misconduct that plaintiffs communicated to the Department of Labor did not relate to the
employer’s labor practices. Rather, a state court can adjudicate the underlying allegations of
embezzlement and other criminal misconduct without having to consider an employer’s labor
practices or whether employees engaged in protected activity when reporting those allegations.
Moreover, Michigan has a deeply rooted and substantial interest in enforcing its criminal laws,
which the NLRB has no authority to enforce and which the WPA assists by protecting

                                    ©2014 State of Michigan
employees who report allegations of criminal misconduct, interests that are separate from the
interests articulated in the NLRA.

        8. Plaintiffs’ WPA claims premised on reporting defendants’ alleged criminal
misconduct also survived defendants’ assertion of LMRDA preemption. Although the LMRDA
does not provide union employees who have been terminated a cause of action for retaliation
taken against them as employees, states are not completely forbidden from restricting a union
leader’s discretion to terminate a union employee. If a union retaliates against a union employee
as an employee, any underlying state-law retaliation claim is preempted only to the extent that it
conflicts with the purposes of the LMRDA. States are afforded considerably more freedom to
supplement the LMRDA federal scheme as long as no conflict arises between state law and the
LMRDA. A union employer’s discretion in employment decisions must yield in cases in which
elected union officials attempt to use that discretion as a shield to hide alleged criminal
misconduct. As a result, the LMRDA allows state-law retaliation claims to proceed in state
courts.

       Affirmed in part and remanded.

         Justice ZAHRA, concurring in part and dissenting in part, joined the majority’s opinion in
Parts I, II, III(A), (C), (D), and IV(B), but dissented from Parts III(B) and IV(A) and the outcome
of the case. Justice ZAHRA agreed that the LMRDA did not preempt plaintiffs’ WPA claims but
disagreed with the majority’s conclusion that the NLRA did not preempt those claims. Conduct
is arguably prohibited by the NLRA if the underlying activity that is the subject matter of the
litigation is arguably subject to the protections of § 7 or the prohibitions of § 8. Plaintiffs’ WPA
claims were arguably subject to the NLRA because plaintiffs’ reporting of alleged wrongful
conduct was done to assist their labor organization by revealing that the organization’s assets
might be subject to depletion through fraud, embezzlement, and misuse of union funds. The
union officials, in their capacity as employers, were prohibited by the NLRA from discharging
their employees simply because the employees reported their suspicions of illegal activity that
would harm the union. Moreover, plaintiffs’ claims did not fall within what is effectively one
exception to NLRA preemption for deeply rooted state interests that are of peripheral concern to
the NLRA. In general, when courts determine the applicability of the exception, they effectively
presume that claims grounded in state law reflect deeply rooted state interests and inquire instead
whether the conduct at issue is of peripheral concern to the NLRA, engaging in a fact-intensive
inquiry to decide whether both the NLRA and the state statute, as applied, prohibit the
complained-of activity. When the NLRA and state law do not prohibit the same conduct, the
preemption exception will apply. Plaintiffs’ claims here sounded in retaliatory discharge. They
reported alleged criminal conduct that triggered protection under the WPA and simultaneously
assisted a labor organization, which entitled their activity to NLRA protection. Thus, both the
WPA and the NLRA prohibited discharge for the protected action, and the NLRA preempted the
WPA. In addition, plaintiffs’ WPA claims represented a classic example of unacceptable NLRA
circumvention through artful pleading. Justice ZAHRA would have reversed the judgment of the
Court of Appeals and dismissed plaintiffs’ WPA claims because they were preempted by the
NLRA.

                                    ©2014 State of Michigan
                                                                      Michigan Supreme Court
                                                                            Lansing, Michigan
                                                Chief Justice:           Justices:

Opinion                                         Robert P. Young, Jr. Michael F. Cavanagh
                                                                     Stephen J. Markman
                                                                     Mary Beth Kelly
                                                                     Brian K. Zahra
                                                                     Bridget M. McCormack
                                                                     David F. Viviano

                                                                 FILED MAY 5, 2014

                          STATE OF MICHIGAN

                                    SUPREME COURT

 ANTHONY HENRY and KEITH WHITE,

            Plaintiffs-Appellees,

 v                                                          No. 145631

 LABORERS’ LOCAL 1191, doing business
 as ROAD CONSTRUCTION LABORERS
 OF MICHIGAN LOCAL 1191, and
 MICHAEL AARON,

            Defendants-Appellants,

 and

 BRUCE RUEDISUELI,

            Defendant-Appellee.

 MICHAEL RAMSEY and GLENN
 DOWDY,

            Plaintiffs-Appellees,

 v                                                       No. 145632

 LABORERS’ LOCAL 1191, doing business
 as ROAD CONSTRUCTION LABORERS
OF MICHIGAN LOCAL 1191, and
MICHAEL AARON,

               Defendants-Appellants,

and

BRUCE RUEDISUELI,

               Defendant-Appellee.

BEFORE THE ENTIRE BENCH

KELLY, J.
         This case involves whether, and the extent to which, plaintiffs’ claims asserted

under the Michigan Whistleblowers’ Protection Act (WPA)1 are preempted by the

National Labor Relations Act (NLRA)2 and the Labor-Management Reporting and

Disclosure Act (LMRDA).3 Plaintiffs allege that defendants violated the WPA when

they discharged plaintiffs in retaliation for reporting to the United States Department of

Labor their suspicions of fraud, embezzlement, improper wages, and unsafe working

conditions or for participating in the Department of Labor’s ensuing investigation.

Defendants argue that the NLRA and LMRDA preempt plaintiffs’ WPA claims and, as a

result, the state court must dismiss those claims.

         Congress enacted the NLRA and the LMRDA to protect the rights of employees

and union members from infringement by employers and unions. The NLRA established

1
    MCL 15.361 et seq.
2
    29 USC 151 et seq.
3
    29 USC 401 et seq.

                                              2
the National Labor Relations Board (NLRB), which has exclusive jurisdiction over

activity “arguably subject” to §§ 74 and 85 of the NLRA.6 These provisions forbid an

employer from interfering with an employee’s right to engage in concerted activities for

the mutual aid or protection of employees.7 The LMRDA safeguards a union member’s

ability to elect union leadership, provides broad discretion for elected union officials to

implement their policies, and protects union members who exercise their freedom of

expression from retaliation by union officials.8 More recently, the Michigan Legislature

enacted the WPA to protect employees from retaliation for reporting violations or

suspected violations of laws and regulations to a public body.9

         We hold that neither the NLRA nor the LMRDA preempts WPA claims premised

on reporting suspected criminal misconduct. The NLRA does not cover the reporting of

suspected criminal misconduct, while the LMRDA does not provide a union official with

discretion to cover up suspected criminal misconduct by retaliating against employees

who report their allegations. However, plaintiffs’ allegations of retaliation for their

reporting of improper wages and an unsafe work environment cover conduct “arguably

4
    29 USC 157.
5
    29 USC 158.
6
 San Diego Bldg Trades Council v Garmon, 359 US 236, 245; 79 S Ct 773; 3 L Ed 2d
775 (1959).
7
    29 USC 157; 29 USC 158(a)(1).
8
    29 USC 411(a)(1), (2), and (5).
9
    MCL 15.362.

                                            3
prohibited” by the NLRA and, as a result, must be litigated exclusively before the NLRB.

Accordingly, we affirm in part the decision of the Court of Appeals and remand this case

to the Wayne Circuit Court for further proceedings consistent with our opinion.

                       I. FACTS AND PROCEDURAL HISTORY

        Defendant Laborers’ Local 1191 is a Wayne County labor union that represents

construction workers. At all times relevant to these consolidated appeals, the union’s

member-elected leadership included its president (defendant Bruce Ruedisueli) and its

business manager (defendant Michael Aaron).            The union also employed several

unelected business agents who serve at the pleasure of the business manager. Plaintiffs

Anthony Henry and Keith White (Docket No. 145631) and Michael Ramsey and Glenn

Dowdy (Docket No. 145632) all worked as business agents until their terminations.

        While the facts leading up to plaintiffs’ terminations are contested, it is undisputed

that in September 2009, defendants asked several Local 1191 members to repair the

crumbling façade of the Trade Union Leadership Council (TULC) building.10 The work

lasted for two days, and each member received $30 a day. Although Local 1191 recorded

these payments as “picket duty” on the memo line of the checks used for payment and in

the union’s treasury, it admits that its members did not engage in picket duty on those

days.

10
  The parties dispute the nature of the TULC. Defendants characterize the TULC as a
“community-focused, non-profit entity” that provides training for laid-off employees,
while plaintiffs claim that it is a “private entity separate and distinct from Local 1191”
that “is licensed to sell liquor.”

                                              4
      Henry witnessed the work. He and the three other plaintiffs suspected that Aaron

was involved in criminal activity, including fraud, an illegal kickback scheme, and

misappropriation of union funds. They also believed that Local 1191 required members

to work without proper safety precautions and without receiving union wages. As a

result, on September 25, 2009, Henry circulated an unsigned open letter to Local 1191’s

leadership and distributed that letter to union membership, the union’s parent leadership,

and local news outlets. In the letter, Henry asked why Local 1191 was paying members

out of its picket fund to work on a for-profit establishment (the TULC) and suggested that

Aaron had received illegal kickbacks from the TULC in exchange for providing the

TULC with free construction labor. The letter also complained that union members

received only $60 for two full days of work.

      In October 2009, Henry and White contacted the United States Department of

Labor with their suspicions and informed the union of their decision to report the

allegations.11 The Department of Labor investigated the allegations and interviewed

several union employees and officials.12           It subsequently referred the matter to an

Assistant United States Attorney, who declined to intervene.13

11
   Henry and White also claim that they contacted the Michigan Department of Labor,
although the lower court record only contains a formal report from the United States
Department of Labor.
12
   Defendants frame plaintiffs’ conduct in this case as primarily focused on working
conditions, not about alleged criminal misconduct. However, the record belies this
assertion and confirms that plaintiffs reported alleged criminal behavior to a public body.
Indeed, the Department of Labor report focuses on the alleged criminal misconduct.
13
  Although major portions of the Department of Labor report are redacted in the record
presented to this Court, including the reason that the Assistant United States Attorney

                                               5
        On November 11, 2009, Aaron notified Henry and White that they were

indefinitely laid off from employment at Local 1191.        The letters claimed that the

“extremely difficult economic climate” necessitated the layoffs.        Henry and White

disputed that stated rationale and, instead, filed a complaint in the Wayne Circuit Court

against Local 1191 as an entity and against Aaron and Ruedisueli individually, in which

they alleged unlawful retaliation under the WPA.

        During the pendency of that initial action, Dowdy and Ramsey were terminated

from their employment at Local 1191.        Dowdy and Ramsey claim that they were

terminated for their cooperation in the Department of Labor investigation and for

disclosing to investigators facts substantiating the allegations of criminal illegality.14

They also filed a separate WPA complaint against Local 1191 as an entity and against

Aaron and Ruedisueli individually.

        Defendants moved for summary disposition in the Henry/White lawsuit and for

partial summary disposition in the Dowdy/Ramsey lawsuit,15 alleging that the LMRDA

preempted plaintiffs’ WPA claims and that, as a result, the circuit court lacked subject-

matter jurisdiction to hear them.16    The court denied the motions from the bench,

declined to intervene, the report indicates that the Department of Labor considers the
matter closed.
14
   Ramsey also claimed that Ruedisueli asked him to lie at a deposition in the
Henry/White lawsuit and that his refusal to do so constituted another reason for his
termination.
15
   Defendants did not seek summary disposition on Ramsey’s allegation that he was
terminated for refusing to lie at his deposition. As a result, it is not part of the appeal
before this Court.
16
     MCR 2.116(C)(4).

                                            6
concluding that the WPA’s protection of an employee against an employer’s retaliatory

employment actions does not contravene the LMRDA because the LMRDA only protects

from retaliation the rights afforded union members.

          On appeal, defendants reasserted their claim of LMRDA preemption and raised

the new defense that the NLRA independently preempted the circuit court from

exercising subject-matter jurisdiction. The Court of Appeals affirmed the circuit court’s

ruling in an unpublished opinion.17 The Court agreed with the circuit court that plaintiffs

“have not alleged any infringement on their membership rights” and that, as a result, the

LMRDA’s protections did not cover plaintiffs’ claims.18         The Court also examined

whether the WPA undermined the LMRDA’s democratic purpose to give elected union

officials the discretion to implement policies that reflect the wishes of union membership.

The Court concluded that plaintiffs’ claims did not infringe union leaders’ discretion

“where a union employee claims wrongful discharge for refusing ‘to commit or aid in

committing a crime’ . . . .”19 Finally, the Court held that the NLRA did not preempt

plaintiffs’ claims because “[a] claim for retaliatory discharge arising out of an employee’s

report of suspected illegal activity or participation in investigation thereof is only of

peripheral concern to the NLRA’s purpose of protecting employees’ rights to engage in

17
   Henry v Laborers Local 1191, unpublished opinion per curiam of the Court of Appeals,
issued July 3, 2012 (Docket Nos. 302373 and 302710).
18
     Id. at 5.
19
  Id. at 3, quoting Packowski v United Food & Commercial Workers Local 951, 289
Mich App 132, 146; 796 NW2d 94 (2010).

                                             7
‘concerted activities for the purpose of collective bargaining or other mutual aid or

protection.’ ”20

       This Court granted defendants’ applications for leave to appeal and requested that

the parties brief

       (1) whether, regardless of the public body involved, the National Labor
       Relations Act (NLRA), 29 USC 151 et seq., or the Labor Management
       Reporting and Disclosure Act (LMRDA), 29 USC 401 et seq., preempt
       Michigan’s Whistleblowers’ Protection Act (WPA), MCL 15.361 et seq., if
       the challenged conduct actually or arguably falls within the jurisdiction of
       the NLRA or the LMRDA; (2) whether a union employee’s report to a
       public body of suspected illegal activity or participation in an investigation
       thereof is of only peripheral concern to the NLRA or the LMRDA so that
       the employee’s claims under the WPA are not preempted by federal law;
       and, (3) whether the state’s interest in enforcing the WPA is so deeply
       rooted that, in the absence of compelling congressional direction, courts
       cannot infer that Congress has deprived the state of the power to act.[21]

                             II. STANDARD OF REVIEW

       Defendants assert that federal law preempts plaintiffs’ WPA claims and precludes

Michigan courts from exercising subject-matter jurisdiction over them. As a result, they

argue, they are entitled to summary disposition pursuant to MCR 2.116(C)(4).

       Jurisdictional questions under MCR 2.116(C)(4), including whether federal

statutory law preempts state law,22 are questions of law that we review de novo.23 In

20
 Henry, unpub op at 6, citing Roussel v St Joseph Hosp, 257 F Supp 2d 280, 285 (D
Maine, 2003).
21
  Henry v Laborers Local 1191, 493 Mich 934, 934-935 (2013). Only Local 1191 and
Aaron appealed the Court of Appeals’ decision.
22
    Whether federal statutory law preempts state law is a question of statutory
interpretation. Detroit v Ambassador Bridge Co, 481 Mich 29, 35; 748 NW2d 221
(2008).

                                             8
deciding whether to grant a motion for summary disposition pursuant to MCR

2.116(C)(4), a court must consider “[t]he affidavits, together with the pleadings,

depositions, admissions, and documentary evidence then filed in the action or submitted

by the parties . . . .”24

                                       III. ANALYSIS

                            A. GENERAL PREEMPTION PRINCIPLES

         In McCulloch v Maryland, Chief Justice John Marshall addressed the relationship

between the federal and state governments in our constitutional republic:

                 If any one proposition could command the universal assent of
         mankind, we might expect it would be this—that the government of the
         Union, though limited in its powers, is supreme within its sphere of action.
         This would seem to result, necessarily, from its nature. It is the government
         of all; its powers are delegated by all; it represents all, and acts for all.
         Though any one state may be willing to control its operations, no state is
         willing to allow others to control them. The nation, on those subjects on
         which it can act, must necessarily bind its component parts. But this
         question is not left to mere reason: the people have, in express terms,
         decided it . . . .[25]

To this end, the Framers of the Constitution drafted, and the people ratified, the

Supremacy Clause, which states the core principle of preemption:

                This Constitution, and the Laws of the United States which shall be
         made in Pursuance thereof; and all Treaties made, or which shall be made,
         under the Authority of the United States, shall be the supreme Law of the

23
     Travelers Ins Co v Detroit Edison Co, 465 Mich 185, 205; 631 NW2d 733 (2001).
24
     MCR 2.116(G)(5).
25
     McCulloch v Maryland, 17 US (4 Wheat) 316, 405; 4 L Ed 579 (1819).

                                              9
         Land; and the Judges in every State shall be bound thereby, any Thing in
         the Constitution or Laws of any State to the Contrary notwithstanding.[26]

Justice Cooley observed that the Supremacy Clause requires “[a] State law [to] yield to

the supreme law, whether expressed in the Constitution of the United States or in any of

its laws or treaties, so far as they come in collision . . . .”27 However, because a state’s

traditional police powers are broad, the United States Supreme Court has explained that

“[c]onsideration of issues arising under the Supremacy Clause ‘start[s] with the

assumption that the historic police powers of the States [are] not to be superseded by . . .

Federal Act unless that [is] the clear and manifest purpose of Congress.’ ”28

         Preemption “fundamentally is a question of congressional intent . . . .”29 Congress

can preempt state law either explicitly or implicitly.30 “[I]n the absence of explicit

statutory language, state law is pre-empted where it regulates conduct in a field that

Congress intended the Federal Government to occupy exclusively”31 or when “it actually

26
     US Const, art VI, cl 2.
27
     Cooley, Constitutional Law (1880), p 32.
28
  Cipollone v Liggett Group, Inc, 505 US 504, 516; 112 S Ct 2608; 120 L Ed 2d 407
(1992), quoting Rice v Santa Fe Elevator Corp, 331 US 218, 230; 67 S Ct 1146; 91 L Ed
1447 (1947).
29
     English v Gen Electric Co, 496 US 72, 78-79; 110 S Ct 2270; 110 L Ed 2d 65 (1990).
30
   Id. Of course, “when Congress has made its intent known through explicit statutory
language, the courts’ task is an easy one.” Id. at 79.
31
   Id. Determining whether Congress intended the federal government to occupy an
entire field requires examining whether “ ‘the federal interest is so dominant that the
federal system will be assumed to preclude enforcement of state laws on the same
subject.’ ” Id., quoting Rice, 331 US at 230.

                                                10
conflicts with federal law.”32 Nevertheless, “[i]n the final analysis, there can be no one

crystal clear distinctly marked formula” to apply preemption principles in all contexts.33

Rather, we must examine congressional intent to preempt state law in the specific context

of the statute or statutes at issue—in this case, how the Michigan WPA operates against

the background of the NLRA and the LMRDA.

                                      B. THE NLRA

         Congress enacted the National Labor Relations Act in 1935 after it concluded that

“[t]he denial by some employers of the right of employees to organize and the refusal by

some employers to accept the procedure of collective bargaining lead to strikes and other

forms of industrial strife or unrest . . . .”34    The NLRA’s enactment “marked a

fundamental change in the Nation’s labor policies.”35 Congress replaced “[t]he earlier

notion that union activity was a species of ‘conspiracy’ and that strikes and picketing

were examples of unreasonable restraints of trade” with “an unequivocal national

32
  English, 496 US at 79. The Court had held that federal law conflicts with state law
“where it is impossible for a private party to comply with both state and federal
requirements,” or “where state law ‘stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.’ ” Id., quoting Hines v
Davidowitz, 312 US 52, 67; 61 S Ct 399; 85 L Ed 581 (1941).
33
     Hines, 312 US at 67.
34
     29 USC 151.
35
  Sears, Roebuck & Co v San Diego Co Dist Council of Carpenters, 436 US 180, 190; 98
S Ct 1745; 56 L Ed 2d 209 (1978).

                                            11
declaration of policy establishing the legitimacy of labor organization and encouraging

the practice of collective bargaining.”36

         Section 7 of the NLRA states that “[e]mployees shall have the right to self-

organization, to form, join, or assist labor organizations, to bargain collectively through

representatives of their own choosing, and to engage in other concerted activities for the

purpose of collective bargaining or other mutual aid or protection . . . .”37 Section 8(a)(1)

states that it is an unfair labor practice for an employer “to interfere with, restrain, or

coerce employees in the exercise of the rights guaranteed in section 7,”38 while § 10(a)

empowers the National Labor Relations Board “to prevent any person from engaging in

any unfair labor practice . . . affecting commerce.”39

         The structure of the NLRA not only creates federal rules of decision regarding

labor relations, but also delegates enforcement of that policy to an administrative agency.

The United States Supreme Court has acknowledged this dual purpose of the NLRA:

                [T]he unifying consideration of our decisions has been regard to the
         fact that Congress has entrusted administration of the labor policy for the
         Nation to a centralized administrative agency, armed with its own
         procedures, and equipped with its specialized knowledge and cumulative
         experience:

36
  Id. The Court upheld the constitutionality of the NLRA against a Commerce Clause
challenge in NLRB v Jones & Laughlin Steel Corp, 301 US 1; 57 S Ct 615; 81 L Ed 893
(1937).
37
     29 USC 157.
38
     29 USC 158(a)(1).
39
     29 USC 160(a).

                                             12
                           . . . Congress evidently considered that centralized
                   administration of specially designed procedures was
                   necessary to obtain uniform application of its substantive
                   rules and to avoid these diversities and conflicts likely to
                   result from a variety of local procedures and attitudes towards
                   labor controversies. . . . A multiplicity of tribunals and a
                   diversity of procedures are quite as apt to produce
                   incompatible or conflicting adjudications as are different rules
                   of substantive law.[40]

Indeed, the Court has explained that “nothing could serve more fully to defeat the

congressional goals underlying the Act than to subject, without limitation, the

relationships it seeks to create to the concurrent jurisdiction of state and federal courts

free to apply the general local law.”41

          San Diego Building Trades Council v Garmon is the “watershed” case analyzing

“the extent to which the maintenance of a general federal law of labor relations combined

with a centralized administrative agency to implement its provisions necessarily

supplants the operation of the more traditional legal processes in this field”—that is, state

regulation.42 In Garmon, the Court explained:

                 When it is clear or may fairly be assumed that the activities which a
          State purports to regulate are protected by § 7 of the National 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. Nor has it

40
  Garmon, 359 US at 242-243, quoting Garner v Teamsters, Chauffeurs & Helpers
Local Union No 776, 346 US 485, 490-491; 74 S Ct 161; 98 L Ed 228 (1953).
41
 Amalgamated Ass’n of Street, Electric R & Motor Coach Employees v Lockridge, 403
US 274, 286; 91 S Ct 1909; 29 L Ed 2d 473 (1971).
42
     Id. at 276.

                                                 13
           mattered whether the States have acted through laws of broad general
           application rather than laws specifically directed towards the governance of
           industrial relations.[43]

Moreover, even when it is unclear “whether the particular activity regulated by the States

was governed by § 7 or § 8 or was, perhaps, outside both these sections,” the Court held

that “[i]t is essential to the administration of the Act that these determinations be left in

the first instance to the National Labor Relations Board.”44          Therefore, “[w]hen an

activity is arguably subject to § 7 or § 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.”45

           The Court subsequently clarified the “arguably subject” standard to mean that “the

party claiming pre-emption is required to demonstrate that his case is one that the Board

could legally decide in his favor.”46 In other words, “a party asserting pre-emption must

advance an interpretation of the Act that is not plainly contrary to its language and that

has not been ‘authoritatively rejected’ by the courts or the Board.”47

           Nevertheless, the Court “has been unwilling to ‘declare pre-empted all local

regulation that touches or concerns in any way the complex interrelationships between

43
     Garmon, 359 US at 244.
44
     Id. at 244-245.
45
     Id. at 245.
46
  Int’l Longshoreman’s Ass’n v Davis, 476 US 380, 395; 106 S Ct 1904; 90 L Ed 2d 389
(1986).
47
     Id.

                                               14
employees, employers, and unions . . . .’ ”48 To this end, Garmon recognized two related

exceptions to preemption of state law regulations that are “arguably subject” to §§ 7 or 8

of the NLRA. The exceptions each “examin[e] the state interests in regulating the

conduct in question and the potential for interference with the federal regulatory

scheme.”49

           The first Garmon exception is “where the activity regulated [is] a merely

peripheral concern” of the NLRA.50        For example, even though the NLRA permits

employers to hire replacement workers during a strike, the Court allowed a replacement

worker’s breach of contract and misrepresentation claims to proceed against the

employer.51      In explaining that the agreements between employers and replacement

workers were only peripheral concerns of the NLRA, the Court concluded that the NLRA

did not require courts “to hold that either the employer or the union is . . . free to injure

innocent third parties without regard to the normal rules of law governing those

relationships.”52

           The second, and related, Garmon exception is “where the regulated conduct

touch[es] interests so deeply rooted in local feeling and responsibility that, in the absence

48
  Farmer v United Brotherhood of Carpenters & Joiners, 430 US 290, 295-296; 97 S Ct
1056; 51 L Ed 2d 338 (1977), quoting Lockridge, 403 US at 289.
49
     Farmer, 430 US at 297.
50
     Garmon, 359 US at 243.
51
     Belknap, Inc v Hale, 463 US 491, 500; 103 S Ct 3172; 77 L Ed 2d 798 (1983).
52
     Id.

                                             15
of compelling congressional direction, we could not infer that Congress had deprived the

States of the power to act.”53 Courts must consider whether “there exist[s] a significant

state interest in protecting the citizen from the challenged conduct” and whether “the

exercise of state jurisdiction over the [state] claim entail[s] little risk of interference with

the regulatory jurisdiction of the [NLRB].”54 Under this exception, the Court has held,

for example, that the NLRA does not preempt certain state law claims alleging intentional

torts—including threats of violence,55 trespass,56 intentional infliction of emotional

distress,57 malicious interference with a lawful occupation,58 and malicious libel.59

         When the conduct at issue in the state litigation is “arguably prohibited” by the

NLRA and thus within the exclusive jurisdiction of the NLRB, the critical inquiry in

determining whether an exception applies “is whether the controversy presented to the

state court is identical with that which could be presented to the Board.”60 When it is

53
     Garmon, 359 US at 244.
54
     Sears, Roebuck, 436 US at 196.
55
     Youngdahl v Rainfair, Inc, 355 US 131, 139; 78 S Ct 206; 2 L Ed 2d 151 (1957).
56
     Sears, Roebuck, 436 US at 207.
57
     Farmer, 430 US at 302.
58
     UAW v Russell, 356 US 634, 646; 78 S Ct 932; 2 L Ed 2d 1030 (1958).
59
  Linn v United Plant Guard Workers, 383 US 53, 62; 86 S Ct 657; 15 L Ed 2d 582
(1966).
60
   Belknap, 463 US at 510. Of course, a conclusion that the NLRA preempts a state law
claim does not require the claim to have been presented to the NLRB. Rather, the claim
is preempted if it could have been presented there and neither of the exceptions applies.
Moreover, even if a claim is preempted, the NLRB may decide not to exercise its
jurisdiction on a particular claim. Nevertheless, whether the NLRB will exercise its

                                              16
identical, the Court has determined that states cannot subject violators to “a supplemental

sanction for violations of the NLRA . . . .”61

                                     C. THE LMRDA

         Congress enacted the Labor-Management Reporting and Disclosure Act in 1959 as

“the product of congressional concern with widespread abuses of power by union

leadership.”62 The United States Supreme Court explained that “allegations of union

wrongdoing led to extended congressional inquiry” and resulted in “enlarged protection

for members of unions paralleling certain rights guaranteed by the Federal Constitution;

not surprisingly, these amendments . . . were introduced under the title of ‘Bill of Rights

of Members of Labor Organizations.’ ”63

         The LMRDA’s Bill of Rights of Members of Labor Organizations protects union

members’ freedom of expression and assembly:

                Every member of any labor organization shall have the right to meet
         and assemble freely with other members; and to express any views,
         arguments, or opinions; and to express at meetings of the labor organization
         his views, upon candidates in an election of the labor organization or upon

jurisdiction (or has been given an option to exercise its jurisdiction) is distinct from
whether the NLRB has jurisdiction over the claim. Calabrese v Tendercare of Mich, Inc,
262 Mich App 256, 264; 685 NW2d 313 (2004).
61
  Wisconsin Dep’t of Indus, Labor & Human Relations v Gould Inc, 475 US 282, 288;
106 S Ct 1057; 89 L Ed 2d 223 (1986).
62
   Finnegan v Leu, 456 US 431, 435; 102 S Ct 1867; 72 L Ed 2d 239 (1982). The
LMRDA is also known as the Landrum-Griffin Act. Black’s Law Dictionary (9th ed),
p 957. One of the LMRDA’s principal coauthors, then Representative Robert P. Griffin,
served on this Court from 1987 to 1994.
63
     Finnegan, 456 US at 435.

                                             17
         any business properly before the meeting, subject to the organization’s
         established and reasonable rules pertaining to the conduct of meetings[.][64]

It also provides union members with procedural protections against discipline by the

union:

                No member of any labor organization may be fined, suspended,
         expelled, or otherwise disciplined except for nonpayment of dues by such
         organization or by any officer thereof unless such member has been (A)
         served with written specific charges; (B) given a reasonable time to prepare
         his defense; (C) afforded a full and fair hearing.[65]

“Any person whose rights secured by the [Bill of Rights of Members of Labor

Organizations] have been infringed by any violation of this title may bring a civil action

in a district court of the United States for such relief (including injunctions) as may be

appropriate.”66

         In Finnegan v Leu, the Supreme Court explained that “[i]t is readily apparent, both

from the language of these provisions and from the legislative history . . . , that it was

64
     29 USC 411(a)(2).
65
     29 USC 411(a)(5).
66
  29 USC 412. The LMRDA also contains two saving provisions. The title containing
the Bill of Rights specifies that “[n]othing contained in this title shall limit the rights and
remedies of any member of a labor organization under any State or Federal law or before
any court or other tribunal, or under the constitution and bylaws of any labor
organization.” 29 USC 413. Additionally, the LMRDA generally states:

                Except as explicitly provided to the contrary, nothing in this Act
         shall reduce or limit the responsibilities of any labor organization or any
         officer, agent, shop steward, or other representative of a labor organization,
         or of any trust in which a labor organization is interested, under any other
         Federal law or under the laws of any State, and, except as explicitly
         provided to the contrary, nothing in this Act shall take away any right or
         bar any remedy to which members of a labor organization are entitled under
         such other Federal law or law of any State. [29 USC 523(a).]

                                              18
rank-and-file union members—not union officers or employees, as such—whom

Congress sought to protect.”67 The Court explained that when plaintiffs have “dual status

as both employees and members of the Union,”68 the LMRDA only provides a

member/employee with protection from discipline in his or her capacity as a member, not

in his or her capacity as an employee:

                  [T]he term “discipline” . . . refers only to retaliatory actions that
           affect a union member’s rights or status as a member of the union. . . . In
           contrast, discharge from union employment does not impinge upon the
           incidents of union membership, and affects union members only to the
           extent that they happen also to be union employees.[69]

This limitation ensures “the freedom of an elected union leader to choose a staff whose

views are compatible with his own.”70 This is “an integral part” of the LMRDA’s

purpose “of ensuring a union administration’s responsiveness to the mandate of the union

election.”71

           Finnegan did not examine the LMRDA in the context of preemption—no

Supreme Court decision has—but several lower courts have done so. Because conduct

protected under the LMRDA does not extend to a union member/employee’s rights as an

employee, a state-law retaliation claim brought by a union employee as an employee is

preempted to the extent that it conflicts with the LMRDA’s purposes. Because “the

67
     Finnegan, 456 US at 436-437.
68
     Id. at 437.
69
     Id. at 437-438.
70
     Id. at 441.
71
     Id.

                                               19
courts have been reluctant to interfere with the right of elected union officers to select

their own administrators,”72 which is protected under the LMRDA, we likewise hold that

the LMRDA preempts state law that would unduly limit the discretion of union officials

to select their employees.

         As a result, when a union employee brings a state-law retaliation claim as an

employee, we must analyze whether the claim conflicts with the LMRDA’s “purpose and

goal of protecting democratic processes in union leadership.”73 In Packowski v United

Food & Commercial Workers Local 951, for example, the Court of Appeals explained

that “[i]f union members cannot choose their leaders, or if the chosen leaders cannot

implement the policies they were elected to implement, then the rights of union members

(as represented by their elected leaders) would be thwarted, or at least diminished.”74

         Nevertheless, a state-law retaliation claim is not preempted when it does not

conflict with the purposes of the LMRDA. Indeed, courts have recognized that the

discretion the LMRDA affords unions to choose their employees is not limitless. In

Bloom v Gen Truck Drivers, Office, Food & Warehouse Union, the United States Court

of Appeals for the Ninth Circuit held that the LMRDA did not preempt a state claim for

wrongful discharge after a union employee refused to illegally alter the minutes of a

72
     Cehaich v UAW, 710 F2d 234, 239 (CA 6, 1983).
73
     Packowski, 289 Mich App at 149.
74
  Id. Because the instant WPA claims implicate allegations of criminal wrongdoing not
existing in Packowski, we need not—and do not—determine the validity of the LMRDA
preemption doctrine used by the Court of Appeals in Packowski.

                                            20
union meeting.75 The court balanced the state’s interest in deterring crime with the

purpose of the LMRDA, explaining that “[i]f federal labor law preempts such a cause of

action, the deterrent effect is lost and nothing prevents unscrupulous employers from

forcing employees to choose between committing crimes and losing their jobs.”76

Furthermore, “[t]he kind of discharge alleged, retaliation for refusal to commit a crime

and breach a trust, is not the kind sanctioned by the Act” to further the goals and policies

of elected union officials.77 Rather, “[p]rotecting such a discharge by preempting a state

cause of action based on it does nothing to serve union democracy or the rights of union

members; it serves only to encourage and conceal such criminal acts and coercion by

union leaders.”78

         We adopt the exception to LMRDA preemption articulated in Bloom and related

cases.     Accordingly, we hold that the LMRDA does not preempt state wrongful-

termination claims in cases in which elected union officials attempt to use their discretion

as a shield to hide alleged criminal misconduct. To hold otherwise would undermine the

explicit purpose of the LMRDA “to eliminate or prevent improper practices on the part of

75
  Bloom v Gen Truck Drivers, Office, Food & Warehouse Union, 783 F2d 1356 (CA 9,
1986).
76
     Id. at 1361
77
     Id. at 1362.
78
   Id. Similarly, two years after Bloom, the Colorado Court of Appeals held that the
LMRDA did not preempt a state-law wrongful-discharge claim “insofar as [the plaintiff]
allege[d] that he was discharged because he refused to aid [the union’s business manager]
in his alleged criminal misuse of union funds.” Montoya v Int’l Brotherhood of
Electrical Workers Local Union III, 755 P2d 1221, 1224 (Colo App, 1988).

                                            21
labor organizations, employers, labor relations consultants, and their officers and

representatives . . . .”79 In fact, protecting union employees from retaliation when they

raise claims of criminal wrongdoing helps to protect the interests of rank-and-file union

members and safeguard union democracy and, as a result, achieve the purposes of the

LMRDA.

                                       D. THE WPA

       The Legislature enacted the WPA in 1980 to “ ‘provide protection to employees

who report a violation or suspected violation of state, local, or federal law . . . .’ ”80 The

WPA “remove[s] barriers that may interfere with employee efforts to report those

violations or suspected violations, thus establishing a cause of action for an employee

who has suffered an adverse employment action for reporting or being about to report a

violation or suspected violation of the law.”81

       MCL 15.362 specifically regulates an employer’s retaliation against employees

who report a violation or suspected violation of law:

              An employer shall not discharge, threaten, or otherwise discriminate
       against an employee regarding the employee’s compensation, terms,
       conditions, location, or privileges of employment because the employee, or
       a person acting on behalf of the employee, reports or is about to report,

79
   29 USC 401(c). See also 29 USC 401(b) (finding that “there have been a number of
instances of breach of trust, corruption, disregard of the rights of individual employees,
and other failures to observe high standards of responsibility and ethical conduct”).
80
  Whitman v City of Burton, 493 Mich 303, 312; 831 NW2d 223 (2013), quoting the title
of 1980 PA 469.
81
  Whitman, 493 Mich at 312, citing Dolan v Continental Airlines/Continental Express,
454 Mich 373, 378-379; 563 NW2d 23 (1997).

                                             22
         verbally or in writing, a violation or a suspected violation of a law or
         regulation or rule promulgated pursuant to law of this state, a political
         subdivision of this state, or the United States to a public body, unless the
         employee knows that the report is false, or because an employee is
         requested by a public body to participate in an investigation, hearing, or
         inquiry held by that public body, or a court action.

         Defendants argue that federal law preempts plaintiffs’ WPA claims. Because

courts examine preemption under the NLRA separately from preemption under the

LMRDA, as shown earlier, we will likewise consider each federal statute separately in

determining whether federal law preempts plaintiffs’ WPA actions.82

                                    IV. APPLICATION

                                 A. NLRA PREEMPTION

         In assessing claims of NLRA preemption, the Supreme Court has clarified that

“[i]t is the conduct being regulated, not the formal description of governing legal

standards, that is the proper focus of concern.”83       The specific conduct alleged in

plaintiffs’ WPA claims is that defendants unlawfully retaliated against them for their

reporting of suspected wrongdoing to the United States Department of Labor. Plaintiffs’

allegations of wrongdoing fall into two general categories: (1) improper working

conditions—that workers were paid unfairly and were not provided with necessary safety

precautions—and (2) criminality—that defendants were engaged in fraud, embezzlement,

82
   Although defendants raised this issue of NLRA preemption for the first time before the
Court of Appeals, preemption is a question of subject-matter jurisdiction. As such, this
Court must consider it. Davis, 476 US at 393 (“A claim of Garmon pre-emption is a
claim that the state court has no power to adjudicate the subject matter of the case, and
when a claim of Garmon pre-emption is raised, it must be considered and resolved by the
state court.”).
83
     Lockridge, 403 US at 292.

                                             23
and misuse of union funds.        Because a court may separate preempted claims from

nonpreempted claims,84 we will examine each category of claims separately in

determining whether the NLRA preempts plaintiffs’ claims.

         As stated, the threshold inquiry in determining whether the NLRA preempts state-

law claims is to determine whether “an activity is arguably subject to § 7 or § 8 of the

Act . . . .”85 Among other protections, § 7 of the NLRA provides employees the right “to

form, join, or assist labor organizations” and “engage in . . . concerted activities for the

purpose of collective bargaining or other mutual aid or protection . . . .”86 These rights

are intertwined: “Basic to the right guaranteed to employees in § 7 to form, join or assist

labor organizations, is the right to engage in concerted activities to persuade other

employees to join for their mutual aid and protection.”87 Defendants claim that all of

plaintiffs’ activities are “arguably subject” to § 7.

         The Court has held that the “mutual aid or protection clause” in § 7 “protects

employees from retaliation by their employers when they seek to improve working

conditions through resort to administrative and judicial forums,” among other activities

84
   See Farmer, 430 US at 301-302 (noting that a rigid application of Garmon might
support the conclusion that the “entire action was preempted by federal law” but in this
case allowing only a claim of intentional infliction of emotional distress to proceed in
state court).
85
     Garmon, 359 US at 245.
86
     29 USC 157.
87
  NLRB v Drivers, Chauffeurs, Helpers, Local Union No 639, 362 US 274, 279; 80 S Ct
706; 4 L Ed 2d 710 (1960).

                                              24
intended to improve working conditions.88 Similarly, the relevant inquiry in examining

whether activity is “concerted” within the meaning of the NLRA is “whether the

employee acted with the purpose of furthering group goals.”89

         Plaintiffs unquestionably acted with the purpose of furthering group goals when

they disputed the working conditions for union members. Their claims of unfair wages

and an unsafe work environment are prototypical issues of dispute under the NLRA.90

As a result, plaintiffs’ conduct to improve unfair wages and an unsafe work environment

is arguably protected under § 7 of the NLRA. Furthermore, § 8 specifically prohibits

defendants from retaliating against plaintiffs for engaging in conduct protected under § 7.

Accordingly, plaintiffs’ conduct regarding working conditions satisfies the initial

Garmon threshold, such that federal law would preempt state law unless one of the two

exceptions applies.91

88
     Eastex, Inc v NLRB, 437 US 556, 566; 98 S Ct 2505; 57 L Ed 2d 428 (1978).
89
     Compuware Corp v NLRB, 134 F3d 1285, 1288 (CA 6, 1998).
90
   See Platt v Jack Cooper Transp, Co, Inc, 959 F2d 91, 94 (CA 8, 1992) (“Platt’s claim
that he was discharged in retaliation for making safety complaints satisfies the threshold
test for Garmon preemption.”).
91
   Plaintiffs argue that union members were not employees within the meaning of the
NLRA and that, as a result, they were not engaging in concerted activities. Rather,
plaintiffs characterize the union members who worked on the TULC project as volunteers
who are not protected by the NLRA. Indeed, the NLRB has stated that unpaid volunteers
are not employees within the meaning of the NLRA because “there is no economic aspect
to their relationship with the Employer, either actual or anticipated.” WBAI Pacifica
Foundation and United Electrical, Radio & Machine Workers of America, 328 NLRB
1273, 1275 (1999). Nevertheless, we reject this argument as it applies to plaintiffs. The
union members who worked on the TULC project did have an economic aspect to their
relationship with the union—they were engaged in work for hire and “receive[d]
compensation for labor or services” in the amount of $30 a day. Id. More importantly,

                                            25
         Moreover, neither of the two exceptions to the NLRA applies to plaintiffs’

concerted activity regarding working conditions. First, working conditions are of central,

not peripheral, concern to the NLRA’s purposes. As stated, the NLRA specifically

sought to protect the right of employees to organize to improve their working conditions.

Relatedly, because this protection has been central to the NLRA’s purposes for nearly 80

years, the more recent attempt of the WPA to regulate retaliation for an alleged unfair

labor practice does not “touch[] interests so deeply rooted in local feeling and

responsibility”92 that the Court could not infer that Congress intended the NLRB to have

exclusive jurisdiction over a state whistleblower claim arising out of complaints

regarding an employer’s improper working conditions. Indeed, allowing plaintiffs’ WPA

claim regarding defendants’ working conditions would amount to “a supplemental

sanction for violations of the NLRA,” which the NLRA prohibits.93

         Nevertheless, in addition to their claims of retaliation for reporting working

conditions, plaintiffs also make independent assertions that defendants retaliated against

them for reporting allegations of criminal misconduct.94       Plaintiffs reported to the

Department of Labor and reiterated in the instant WPA complaints that union members

there is no question that plaintiffs were employees within the meaning of the NLRA and
that they were allegedly retaliated against for complaining to their employer about its
labor practices.
92
     Garmon, 359 US at 244.
93
     Gould, 475 US at 288.
94
   These assertions are independent in the sense that they do not rely on the working-
condition assertions for their validity and, accordingly, can be assessed separately from
them.

                                           26
were receiving money “paid out of the Union treasury . . . attributed to ‘Picket line’ duty

when that clearly was not the case” and that they reported “their suspicions of fraud and

illegal activity on the part of their employer.”95 Indeed, in recognizing the potential

illegal nature of the union officials’ actions, the Department of Labor referred the matter

for investigation by an Assistant United States Attorney.

         While the NLRA regulates employees’ concerted activities for their mutual aid or

protection, it simply does not regulate the reporting of federal and state crimes.96

Section 7 is not so broad as to protect all employees’ concerted activities. “[A]t some

point the relationship” between the concerted activity and the “employees’ interests as

employees . . . becomes so attenuated that an activity cannot fairly be deemed to come

within the ‘mutual aid or protection’ clause.”97 The NLRB has explained that protection

under § 7 “can be lost whenever employee communications to third parties do not relate

95
  The Department of Labor’s investigation report corroborates this claim and states that
the department investigated allegations that Aaron “stole or misused strike/picket funds.”
96
   That the Department of Labor referred the matter to the United States Attorney’s office
corroborates this claim. While the partial dissent correctly identifies 29 USC 501(c), the
federal law prohibiting embezzlement from a union, as relevant to this case, its
significance as a criminal offense outside the NLRA shows why reporting a suspected
violation of 29 USC 501(c) does not arguably fall within the protections of the NLRA.
Significantly, while the NLRB “is empowered . . . to prevent any person from engaging
in any unfair labor practice,” 29 USC 160(a), the power of the NLRB does not extend to
enforce 29 USC 501(c) or, indeed, any criminal law. See Republic Steel Corp v NLRB,
311 US 7, 10; 61 S Ct 77; 85 L Ed 6 (1940) (stating that the NLRA “does not carry a
penal program declaring the described unfair labor practices to be crimes” and “does not
prescribe penalties or fines in vindication of public rights or provide indemnity against
community losses as distinguished from the protection and compensation of employees”).
97
     Eastex, 437 US at 567-568.

                                            27
to [the] labor practices of the employer . . . .”98 The allegations of criminal misconduct

that plaintiffs communicated to the Department of Labor do not relate to the employer’s

labor practices.   Rather, a state court can adjudicate the underlying allegations of

embezzlement and other criminal misconduct without having to consider an employer’s

labor practices or whether employees engaged in protected activity in reporting those

allegations.99 By contrast, the relationship between allegations of improper working

conditions and employees’ protected activity gets to the heart of the employer’s labor

practices.

       The crux of the partial dissent’s disagreement with our analysis is over whether

plaintiffs’ assertions of defendants’ violations of the federal laws regarding their

fiduciary obligations toward the union and protecting union funds from embezzlement

are arguably within the right of an employee under § 7 to “assist labor organizations.”

Courts ordinarily have examined the phrase “form, join, or assist labor organizations” in

98
   Handicabs, Inc and Trail, 318 NLRB 890, 896 (1995). The fact that the NLRB
provided nonexclusive examples of unprotected conduct when stating this rule does not
render the rule any less relevant to this circumstance—there must be a relationship
between the communication and the employees’ interests as employees.
99
   Indeed, one hypothetical scenario suffices to illustrate why this is so. Suppose that
plaintiffs’ claim of improper wage and unsafe working conditions simply did not exist
and, instead, that defendants paid union members a bargained-for wage and the members
repaired the TULC building under safe working conditions. In this scenario, plaintiffs
would still be able to allege that defendants misappropriated union funds for unlawfully
paying those union members their bargained-for wage out of the picket fund when the
members did not actually engage in picket duty and that defendants received illegal
kickbacks from the TULC. By stripping away plaintiffs’ claims of unsafe working
conditions and unfair wages that are preempted by the NLRA, it becomes clear that
plaintiffs’ criminal-misconduct claims exist independently.

                                           28
§ 7 its entirety, suggesting a continuum of protections. Yet when the term “assist” has

been given independent force, it appears in the context of a nonmember’s assistance to

the labor organization.100     Furthermore, even when interpreting the term “assist”

independently, courts have examined it in the context of the phrase “mutual aid or

protection,”101 perhaps because assisting a labor organization is supposed to be for the

mutual aid or protection of the employees that it represents. For all these reasons, the

partial dissent’s focus on the phrase “assist[ing] labor organizations” without reference to

the “mutual aid or protection” analysis is unpersuasive.

         Even if the underlying allegations of criminal misconduct brought to light by

concerted activity arguably relate to an employer’s labor practices, enforcement of well-

established criminal law is at the heart of a state’s police power and is “so deeply rooted

in local feeling and responsibility”102 that we cannot infer that Congress intended when it

enacted the NLRA to relieve states from enforcing that well-established criminal law or

100
    Southern Greyhound Lines and Anderson, 169 NLRB 627, 628 (1968) (“It is well
settled that Section 7 of the Act protects an employee in his right to assist a labor
organization regardless of whether he is eligible for membership in it . . . .”). See also
Signal Oil & Gas Co v NLRB, 390 F 338, 343 (CA 9, 1968) (affirming the trial
examiner’s finding that the employee’s prounion speech “ ‘may be regarded as an
expression of support for the proposed union activity of his fellow employees, made in
anticipation that he or his group might receive similar support should the occasion
arise’ ”).
101
   NLRB v Rockaway News Supply Co, 197 F2d 111, 113 (CA 2, 1952) (stating that a
nonmember’s refusal to cross a picket line “is frequently of assistance to the labor
organization whose picket line is respected, and it is in a broad but very real sense
directed to mutual aid or protection”), aff’d 345 US 71 (1953) (emphasis added).
102
      Garmon, 359 US at 244.

                                            29
protecting from retaliation employees who report allegations of criminal wrongdoing.103

A state’s prohibition of adverse employment actions resulting from the reporting of

suspected criminal misconduct does not “ ‘frustrate effective implementation of the Act’s

processes.’ ”104 Moreover, when there are “discrete concerns of the federal scheme and

the state tort law, that potential for interference is insufficient to counterbalance the

legitimate and substantial interest of the State in protecting its citizens.”105 In this case,

the state has a deeply rooted and substantial interest in enforcing its criminal law,106

which the NLRB has no authority to enforce107 and which the WPA assists by protecting

employees who report allegations of criminal misconduct.108 Because these interests are

103
   See, e.g., Metro Life Ins Co v Massachusetts, 471 US 724, 756; 105 S Ct 2380; 85 L
Ed 2d 728 (1985) (holding that the NLRA does not preempt state police power even to
the extent that the police power prescribes minimum labor standards applicable to
employers).
104
   Int’l Ass’n of Machinists & Aerospace Workers v Wisconsin Employment Relations
Comm, 427 US 132, 148; 96 S Ct 2548; 49 L Ed 2d 396 (1976), quoting Brotherhood of
R Trainmen v Jacksonville Terminal Co, 394 US 369, 380; 89 S Ct 1109; 22 L Ed 2d 344
(1969).
105
      Farmer, 430 US at 304.
106
   In addition to alleging violations of federal criminal statutes, plaintiffs also alleged
violation of MCL 750.174, the state-law crime of embezzlement.
107
    Republic Steel, 311 US at 10 (“[The NLRA] does not prescribe penalties or fines in
vindication of public rights or provide indemnity against community losses as
distinguished from the protection and compensation of employees.”).
108
    The partial dissent cites Kilb v First Student Transp, LLC, 157 Wash App 280; 236
P3d 968 (2010), for the proposition that the NLRA preempted a state-law retaliation
claim alleging that the plaintiff was discharged for attempting to assist a union.
However, the retaliation in Kilb did not implicate the state’s interest in enforcing its
criminal law. Rather, the plaintiff claimed that he was discharged from his supervisory
position for refusing to undertake antiunion tactics and that “his discharge violated the

                                             30
separate from the interests articulated in the NLRA, we hold that the NLRA does not

preempt the WPA with respect to plaintiffs’ claims alleging retaliation for reporting

defendants’ criminal wrongdoing.

                                 B. LMRDA PREEMPTION

         Defendants also assert that the LMRDA preempts plaintiffs’ WPA claims.109 As

stated, the LMRDA safeguards union democracy by protecting union members’ right to

free expression and by providing democratically elected union leaders wide discretion in

pursuing the policies that they were elected to accomplish. The Supreme Court held in

Finnegan that “the freedom of an elected union leader to choose a staff whose views are

compatible with his own” is “an integral part” of the LMRDA’s protections because an

elected union leadership must be responsive “to the mandate of the union election.”110

However, Finnegan does not stand for the proposition that the LMRDA gives an elected

union leader unfettered discretion with respect to employment matters. Although the

LMRDA does not provide union employees who have been terminated a cause of action

right of employees to organize and form unions, . . . in contravention of Washington
State’s clearly established public policy against interfering with these rights.” Id. at 284
(citation omitted). Unlike here, then, the conduct at issue in Kilb was directly within the
NLRA’s protections. Id. at 288 (“An employer’s discharge of a supervisor for refusing to
commit unfair labor practices is, at least arguably, a violation of [29 USC 158(a)(1)].”).
109
   Because we hold that the NLRA preempts plaintiffs’ WPA claims to the extent that
they allege defendants’ unfair labor practices related to working conditions, we need not
examine those preempted claims within the context of the LMRDA. Accordingly, our
analysis of the LMRDA focuses only on plaintiffs’ claims relating to their allegations of
defendants’ criminal activity.
110
      Finnegan, 456 US at 441.

                                            31
for retaliation taken against them as employees, this does not lead to the conclusion that

states are completely forbidden from restricting a union leader’s discretion to terminate a

union employee. Rather, if a union retaliates against a union employee as an employee,

then any underlying state-law retaliation claim is only preempted to the extent that it

conflicts with the purposes of the LMRDA. The LMRDA is contrasted against the more

expansive federal preemption doctrine of the NLRA—states are afforded considerably

more freedom to supplement the LMRDA federal scheme as long as no conflict arises

between state law and the LMRDA.111 Moreover, although the saving clauses of the

LMRDA do not directly apply to save plaintiffs’ civil action, they do support a finding

that the LMRDA both recognizes a strong state interest in protecting against criminal

misconduct and implicitly approves plaintiffs’ cause of action.112

         Accordingly, the exception to a union employer’s discretion for allegations of

criminal misconduct is conclusive in this case.        A union employer’s discretion in

employment decisions must yield in cases in which elected union officials attempt to use

that discretion as a shield to hide alleged criminal misconduct. Of course, while Bloom

involved union employees who claim that they were fired for refusing to commit crimes

themselves, this case involves union employees who claim that they were fired for

reporting union officials’ alleged crimes. This distinction is without a difference because,

111
    We also note that, unlike the NLRA, the LMRDA does not create a separate
administrative board to consider violations of its provisions. Rather, it creates a cause of
action that a union member may pursue in a district court of the United States. 29 USC
412.
112
      See Bloom, 783 F2d at 1361-1362.

                                            32
in both cases, the relationship between the state-law claim and the LMRDA is identical:

the union employer is retaliating against employees and, in doing so, trying to shield

alleged criminal misconduct from union rank-and-file membership and the public.

Moreover, in both cases, the state-law claims are consistent with the LMRDA’s expressly

stated purposes of abating union corruption and breaches of trust. As a result, the

LMRDA allows state-law retaliation claims to proceed in state courts. Therefore, we

hold that plaintiffs’ WPA claims premised on their reporting of defendants’ alleged

criminal misconduct survive defendants’ assertion of LMRDA preemption.

                                   V. CONCLUSION

       The Court of Appeals correctly determined that federal law did not preempt

plaintiffs’ WPA claims premised on their allegations of criminal misconduct. However,

the court did not distinguish these WPA claims from plaintiffs’ claims involving

defendants’ working conditions. As a result, we affirm the Court of Appeals’ decision

only in part. Going forward, plaintiffs may only pursue in state court their WPA claims

involving retaliation for their reporting of alleged illegal conduct to a public body or

bodies.113

       Because neither the NLRA nor the LMRDA preempts plaintiffs’ WPA claims to

the extent that they allege retaliation for reporting criminal misconduct such as fraud and

embezzlement, state courts have subject-matter jurisdiction over those claims.

113
   As stated, this decision does not involve Ramsey’s separate and individual allegation
that he was terminated for refusing to perjure himself.

                                            33
Accordingly, we affirm in part the decision of the Court of Appeals and remand this case

to the Wayne Circuit Court for further proceedings consistent with our opinion.

                                                       Mary Beth Kelly
                                                       Robert P. Young, Jr.
                                                       Michael F. Cavanagh
                                                       Stephen J. Markman
                                                       Bridget M. McCormack
                                                       David F. Viviano

                                           34
                         STATE OF MICHIGAN

                                   SUPREME COURT

ANTHONY HENRY and KEITH WHITE,

           Plaintiffs-Appellees,

v                                                  No. 145631

LABORERS’ LOCAL 1191, doing business
as ROAD CONSTRUCTION LABORERS
OF MICHIGAN LOCAL 1191, and
MICHAEL AARON,

           Defendants-Appellants,

and

BRUCE RUEDISUELI,

           Defendant-Appellee.

MICHAEL RAMSEY and GLENN
DOWDY,

           Plaintiffs-Appellees,

v                                                  No. 145632

LABORERS’ LOCAL 1191, doing business
as ROAD CONSTRUCTION LABORERS
OF MICHIGAN LOCAL 1191, and
MICHAEL AARON,

           Defendants-Appellants,

and

BRUCE RUEDISUELI,

           Defendant-Appellee.
ZAHRA, J. (concurring in part and dissenting in part).
         Though I join the majority’s opinion in Parts I, II, III(A), (C), and (D), and IV(B),

I write separately to dissent from Parts III(B) and IV(A) and the outcome of the case. I

agree with the majority’s conclusion that the Labor-Management Reporting and

Disclosure Act1 does not preempt plaintiffs’ Whistleblowers’ Protection Act (WPA)2

claims. But I respectfully dissent from the majority’s conclusion that the National Labor

Relations Act (NLRA)3 does not preempt plaintiffs’ WPA claims.               I conclude that

plaintiffs’ WPA claims are arguably subject to the NLRA because plaintiffs’ reporting of

alleged wrongful conduct was done to assist their labor organization. I further conclude

that plaintiffs’ WPA claims do not fall within any preemption exception. Finally, I

conclude that plaintiffs’ WPA claims represent a classic example of unacceptable NLRA

circumvention through artful pleading. I would reverse the judgment of the Court of

Appeals and dismiss plaintiffs’ WPA claims because they are preempted by the NLRA.

         I. APPLICABLE LAW: NLRA PREEMPTION AND ITS EXCEPTIONS

         I am in agreement with the general legal propositions stated by the majority with

regard to NLRA preemption and its exceptions. As noted by the majority, San Diego

Bldg Trades Council v Garmon4 is the seminal case governing the extent of NLRA

1
    29 USC 401 et seq.
2
    MCL 15.361 et seq.
3
    29 USC 151 et seq.
4
  San Diego Bldg Trades Council v Garmon, 359 US 236; 79 S Ct 773; 3 L Ed 2d 775
(1959).

                                               2
preemption. Garmon provides the following preemption rule: “When an activity is

arguably subject to § 7[5] or § 8[6] of the [NLRA], the States as well as the federal courts

must defer to the exclusive competence of the National Labor Relations Board.”7 But I

also find guidance from the United States Supreme Court’s subsequent case, Local 100,

United Ass’n of Journeymen & Apprentices v Borden, in which the Court stated:

                [I]n the absence of an overriding state interest . . . , state courts must
         defer to the exclusive competence of the National Labor Relations Board in
         cases in which the activity that is the subject matter of the litigation is
         arguably subject to the protections of § 7 or the prohibitions of § 8 of the
         National Labor Relations Act.[8]

         The standard for “arguably subject” is permissive. An activity that is the subject

matter of the litigation at hand is “arguably subject” to the protections of § 7 or the

prohibitions of § 8 if it “is not plainly contrary to [the NLRA’s] language and . . . has not

been ‘authoritatively rejected’ by the courts or the Board.”9

         The majority relies on Belknap, Inc v Hale for the proposition that conduct is

“arguably prohibited” by the NLRA when “the controversy presented to the state court is

identical with that which could be presented to the Board.”10 While this is a correct

5
    29 USC 157.
6
    29 USC 158.
7
    Garmon, 359 US at 245.
8
 Local 100, United Ass’n of Journeymen & Apprentices v Borden, 373 US 690, 693; 83
S Ct 1423; 10 L Ed 2d 638 (1963) (emphasis added).
9
  Int’l Longshoreman’s Ass’n v Davis, 476 US 380, 395, 106 S Ct 1904, 90 L Ed 2d 389
(1986).
10
     Belknap, Inc v Hale, 463 US 491, 510; 103 S Ct 3172; 77 L Ed 2d 798 (1983).

                                                3
statement of the law, I take issue with the majority’s interpretation of this passage as

whether the “state law claim . . . could have been presented [to the NLRB].”11 This is, in

my view, an incorrect interpretation. The more precise interpretation is whether the

underlying “activity that is the subject matter of the litigation is arguably subject to the

protections of § 7 or the prohibitions of § 8”12—the same inquiry as in Garmon.

         After a court determines that certain activity is arguably subject to the protections

of § 7 or the prohibitions of § 8 of the NLRA, the matter will only be preempted if it is

also determined that no exception to NLRA preemption applies. A claim arising from an

“activity” that is “arguably subject” to the NLRA may be adjudicated by a state or federal

court if the

         activity that otherwise would fall within the scope of Garmon . . . was a
         merely peripheral concern of the [NLRA] or touched interests so deeply
         rooted in local feeling and responsibility that, in the absence of compelling
         congressional direction, we could not infer that Congress had deprived the
         States of the power to act.[13]

                    II. APPLICATION OF THE LAW TO THE FACTS

                         A. “ARGUABLY SUBJECT” TO THE NLRA

         Unlike the majority, I conclude that plaintiffs’ WPA claims are “arguably subject”

to the NLRA. I start my analysis by reviewing the activity that is the subject matter of

11
     Emphasis altered.
12
     Borden, 373 US at 693 (emphasis added).
13
   Farmer v United Brotherhood of Carpenters & Joiners, 430 US 290, 296-297; 97 S Ct
1056; 51 L Ed 2d 338 (1977) (emphasis added) (quotation marks, citation, and original
alterations omitted).

                                               4
this litigation—plaintiffs’ claims that they were wrongfully discharged for reporting their

suspicions of wrongdoing to the United States Department of Labor (USDOL).

Accepting as true plaintiffs’ assertions of wrongdoing, plaintiffs were assisting their labor

organization, Laborers’ Local 1191, by exposing that the organization’s assets might be

subject to depletion through fraud, embezzlement, and misuse of union funds.               By

exposing this conduct, plaintiffs clearly hoped to bring an end to this activity, thereby

preserving the integrity, effectiveness, and financial assets of their union.

         The provisions of the NLRA clearly give plaintiffs the right to engage in the

conduct that they did. That right may be found in § 7 of the NLRA, which states that all

“[e]mployees shall have the right to . . . assist labor organizations . . . .”14 Additionally,

employers are prohibited from engaging in “unfair labor practice[s]” by § 8 of the NLRA,

which bars “interfer[ing] with, restrain[ing], or coerc[ing] employees in the exercise of

the rights guaranteed in section 7[.]”15 These two NLRA provisions apply in this case.

Plaintiffs are undoubtedly employees of the labor union, entitled to the protections of

14
     29 USC 157. Section 7 states in full:

                 Employees shall have the right to self-organization, to form, join, or
         assist labor organizations, to bargain collectively through representatives of
         their own choosing, and to engage in other concerted activities for the
         purpose of collective bargaining or other mutual aid or protection, and shall
         also have the right to refrain from any or all of such activities except to the
         extent that such right may be affected by an agreement requiring
         membership in a labor organization as a condition of employment as
         authorized in [29 USC 158(a)(3)].

15
     29 USC 158(a)(1).

                                               5
§ 7.16 The labor union, in its relationship to plaintiffs as their employer, is clearly subject

to the restrictions in the NLRA.17 Plaintiffs’ discharges, if the allegations are true, would

violate the NLRA.

         The majority opinion erroneously asserts that when the term “assist” has been

given independent legal force, it has only been in the context of a nonmember’s

assistance to the labor organization. But its own citation demonstrates that this is not so.

The majority cites Southern Greyhound Lines and Anderson, which states: “It is well-

settled that Section 7 of the Act protects an employee in his right to assist a labor

organization regardless of whether he is eligible for membership in it . . . .”18 This

quotation implies that both members and nonmembers may assist a union and be

protected under § 7. Furthermore, in United States Dep’t of Justice, INS, Border Patrol v

Fed Labor Relations Auth, the court noted that the right to assist any labor organization

“confer[s] the right to wear a union lapel pin . . . .”19 Border Patrol did not distinguish

16
  See, e.g., Rider v MacAninch, 424 F Supp 2d 353, 359 (D RI, 2006) (holding that the
defendants in that case, one of whom was a union business agent and one of whom was
the union’s secretary/treasurer, were “employees” of the union). Indeed, this Court
unanimously agrees that plaintiffs were employees of the labor union entitled to the
protections of § 7.
17
  Office Employees Int’l Union, Local 11 v NLRB, 353 US 313, 316; 77 S Ct 799; 1 L Ed
2d 846 (1957) (holding that, when a union acts as an employer, it is deemed an employer
within the meaning of the NLRA and subject to the jurisdiction of the NLRB).
18
     Southern Greyhound Lines and Anderson, 169 NLRB 627, 628 (1968).
19
  United States Dep’t of Justice, INS, Border Patrol v Fed Labor Relations Auth, 955
F2d 998, 1003 (CA 5, 1992).

                                              6
between members who wear a pin and nonmembers who may choose to do the same, nor

would it be sensible to do so.

        It is of no legal consequence that plaintiffs have not specifically asserted their

right to assist their labor organization under § 7 because reporting suspected criminal

activity to the USDOL is per se “assist[ance] [to a] labor organization[].”20

        Specifically, plaintiffs based their claims of criminal activity on 29 USC 501(a)

and (c), which detail the fiduciary responsibilities of officers of labor organizations.21

29 USC 501(a) states that “officers . . . of a labor organization occupy positions of trust in

relation to such organization and its members as a group” and that each officer therefore

has a duty “to account to the organization for any profit received by him in whatever

capacity in connection with transactions conducted by him or under his direction on

behalf of the organization.” Similarly, 29 USC 501(c) prohibits an officer of a labor

organization from embezzling, stealing, or converting any “assets of a labor organization

of which he is an officer . . . .” To point out when a union officer may not be complying

with his or her fiduciary responsibilities is, without question, “assist[ing] a union,”

irrespective of how plaintiffs characterize their complaints. The NLRA not only protects

20
     29 USC 157.
21
   See U.S. Department of Labor, Office of Inspector General, Investigative Report,
File No 52-803C-0005-LC-J (February 8, 2010), Appellants’ Appendix, p 1099a
(investigating Local 1191’s leaders for a violation of 29 USC 501(c)); Plaintiffs’ Answers
to Defendants’ First Set of Interrogatories, Appellants’ Appendix, p 56a (answering a
request that plaintiffs “[s]pecifically identify by citation every Federal law, regulation
and/or rule upon which Plaintiffs based their ‘suspicions of fraud and illegal activity’ ”).

                                              7
employees who assist unions in their formation, but also those employees who help

unions continue to exist for the benefit of the union members.22

         Likewise, employees who notice and report corruption of union leadership,

particularly when that corruption suggests embezzlement from the union itself or gaining

an unfair profit at the union’s expense, assist the union by enabling the members to be

well represented in a manner consistent with the members’ best interests.           In this

consolidated case, the union officials, in their capacity as employers, were prohibited by

the NLRA from discharging their employees simply because the employees reported their

suspicions of illegal activity that would harm the union. To permit the employer to do

otherwise would “interfere with . . . employees in the exercise of the rights guaranteed in

section 7[.]”23

         The majority, in my view, errs by calling plaintiffs’ claims of criminal misconduct

“independent assertions” because this implies that those assertions of criminal

misconduct had nothing to do with unions or union assistance. It then states that “[w]hile

the NLRA regulates employees’ concerted activities for their mutual aid or protection, it

simply does not regulate the reporting of federal and state crimes.” The majority focuses

on the wrong activity. The issue is not whether the NLRA regulates the reporting of

federal and state crimes. Rather, the issue is whether reporting a federal or state crime in

this instance would fall under the protections of the NLRA.24 Because the purpose of

22
     See, e.g., Eastex, Inc v NLRB, 437 US 556, 570; 98 S Ct 2505; 57 L Ed 2d 428 (1978).
23
     29 USC 158(a)(1).
24
 The majority states that the NLRB has no authority to enforce the penal aspects of 29
USC 501(c). This is correct, but beside the point. In this case, when plaintiffs filed their

                                              8
reporting the federal and state crimes was to aid or assist the union, the activity falls

under § 7 of the NLRA.25

         Likewise, the majority’s focus on Eastex, Inc v NLRB26 is misplaced. The Eastex

case focuses on the provision in § 7 that states, “Employees shall have the right . . . to

engage in other concerted activities for the purpose of collective bargaining or other

mutual aid or protection . . . .”   In determining the scope of “other mutual aid or

protection, Eastex states that “at some point the relationship” between concerted activity

and the “employees’ interests as employees . . . becomes so attenuated that an activity

cannot fairly be deemed to come within the ‘mutual aid or protection’ clause.”27 Though

Eastex guides us with regard to the meaning of “mutual aid and protection,” it does not

aid us in determining what activities “assist” a labor union.

         I also conclude that the majority has erroneously applied Handicabs, Inc and

Trail28 to the case at hand. True enough, Handicabs states that protection under § 7 “can

be lost whenever employee communications to third parties do not relate to [the] labor

complaints in the Michigan circuit court, they did not seek enforcement of any criminal
statute. All they sought was relief for their wrongful discharge. This claim—wrongful
discharge—is the selfsame claim that plaintiffs could have and therefore should have
brought before the NLRB.
25
   Certainly, the mere reporting of a suspected crime by one’s employer would not fall
under the NLRA in all cases. But in this case, the employees did so for the protection of
the union and its members, as indicated by plaintiffs’ interrogatories, listing violations of
a federal duties-of-union-officials statute.
26
     Eastex, 437 US 556.
27
     Id. at 567-568.
28
     Handicabs, Inc and Trail, 318 NLRB 890 (1995).

                                             9
practices of the employer . . . .”29   But the majority omits two important details of

Handicabs that suggest that its rule does not apply in the instant case. First, Handicabs

addresses the “mutual aid or protection” aspect of § 7, not its provision related to

“assist[ing]” a labor organization.30 Second, the portion quoted by the majority truncates

language that is not superfluous, but is important to an understanding of the quotation’s

context; Handicabs states that NLRA “protection can be lost whenever employee

communications to third parties do not relate to labor practices of the employer, such as

disparaging the employer’s reputation or quality of its product, or whenever those

communications are maliciously motivated.”31 The employee complaints described in

Handicabs are a far cry from those in the case at hand, in which the employees reported

that the union manager was violating his federal, statutorily created fiduciary duties to the

union and its members.

29
     Id. at 896.
30
   The majority argues that communications to third parties do not “assist a labor
organization” within the meaning of § 7 unless there is a “relationship between the
communication and the employees’ interests as employees.” (Emphasis omitted.) The
majority then concludes that speaking out about union leadership’s embezzling union
funds does not have any connection to the employees’ interests as employees. But
existing caselaw calls into question either the majority’s premise or its conclusion. For
example, in American Federation of Government Employees v Fed Labor Relations Auth,
278 US App DC 358, 363; 878 F2d 460 (1989), the court stated that “an employee’s
broad ‘right to . . . assist’ a labor organization” “includes the right to speak out on union-
management issues, without fear of reprisal[.]”
31
     Handicabs, 318 NLRB at 896 (emphasis added).

                                             10
                           B. THE PREEMPTION EXCEPTIONS

         Controversies that would otherwise be preempted by the NLRA are not preempted

when a plaintiff’s claim reflects “deeply rooted” state interests or are matters of

“peripheral concern” to the NLRA.32 Thus, the issue is whether Michigan has a deeply

rooted state interest in applying the WPA in plaintiffs’ cases or whether the claims are of

peripheral concern to the NLRA.

         Though these appear to be two exceptions, in application they amount to one. In

practice, courts effectively presume that claims grounded in state law reflect deeply

rooted state interests.33 Thus, the critical inquiry is whether the conduct at issue is of

peripheral concern to the NLRA. Generally speaking, courts make this determination by

engaging in a fact-intensive inquiry to decide whether the NLRA and the state statute, as

applied, prohibit the same activity. When the NLRA and state law do not prohibit the

same conduct, the preemption exception will apply.

         The United States Supreme Court case Farmer v United Brotherhood of

Carpenters & Joiners34 is instrumental in demonstrating how to apply the NLRA

preemption exception. In Farmer, to determine whether a state-law claim for intentional

infliction of emotional distress (IIED) was exempt from NLRA preemption, the Court

focused on whether the NLRA’s prohibitions protected the plaintiff from the same

32
     Farmer, 430 US at 296-297 (quotation marks and citation omitted).
33
     See, generally, notes 50-58 of this opinion and accompanying text.
34
     Farmer, 430 US 290.

                                             11
complained-of conduct as the state-law IIED claim.35 The Court contrasted the plaintiff’s

IIED claim, which protected the plaintiff from conduct that no reasonable person in

civilized society should be required to endure, with the plaintiff’s potential NLRA claim,

which would ask whether the alleged employer conduct rose to the level of an unfair

labor practice under § 8.36 The Court noted that the two inquiries would be different

because the NLRA did not punish outrageous conduct as outrageous conduct, but merely

insofar as the conduct would have constituted an unfair labor practice.37 The Court

wrote: “No provision of the National Labor Relations Act protects the ‘outrageous

conduct’ complained of by petitioner . . . . [T]here is no federal protection for conduct

on the part of union officers which is so outrageous that ‘no reasonable man in civilized

society should be expected to endure it.’ ”38 Therefore, the Court determined that the

NLRA preemption exception applied to the plaintiff’s claim for IIED because “the state-

35
  See id. at 294 (“[T]he National Labor Relations Board would not have jurisdiction to
compensate petitioner for injuries such as emotional distress, pain and suffering, and
medical expenses, nor would it have authority to award punitive damages.”).
36
   Id. at 304 (“[T]he focus of any unfair labor practice proceeding would be on whether
the statements or conduct on the part of Union officials discriminated or threatened
discrimination . . . . Whether the statements or conduct . . . also caused [the complainant]
severe emotional distress and physical injury would play no role in the Board’s
disposition of the case, and the Board could not award [the complainant] damages for
pain, suffering, or medical expenses.”).
37
     Id.
38
     Id. at 302 (citation omitted).

                                            12
court tort action [could] be adjudicated without resolution of the ‘merits’ of the

underlying labor dispute.”39

           The United States Supreme Court clarified this rule in Sears, Roebuck & Co v San

Diego Co Dist Council of Carpenters, pronouncing that the preemption exception

depends upon whether the “controversy presented to the state court is identical to . . . or

different from . . . that which could have been, but was not, presented to the Labor

Board.”40 The Court’s rationale for this rule was that “it is only [when the controversy

would be identical] that a state court’s exercise of jurisdiction necessarily involves a risk

of interference with the unfair labor practice jurisdiction of the Board . . . .”41

           In this case, plaintiffs’ claims sound in retaliatory discharge.       As discussed

previously, I conclude that the alleged retaliatory discharges are not only prohibited by

the WPA but also by the NLRA.            Plaintiffs reported alleged criminal conduct that

triggered protection under the WPA and simultaneously assisted a labor organization,

which entitles plaintiffs’ activity to NLRA protection. Thus, both the WPA and the

NLRA prohibit discharge for the protected action. For this reason, ours is a much weaker

case for the preemption exception than any other United States Supreme Court case

granting the exception. As noted by the majority, the Court has excepted from the

NLRB’s exclusive purview causes of action for IIED,42 threats of violence,43 trespass,44

39
     Id. at 304.
40
  Sears, Roebuck & Co v San Diego Co Dist Council of Carpenters, 436 US 180, 197; 98
S Ct 1745; 56 L Ed 2d 209 (1978).
41
     Id.
42
     Farmer, 430 US at 302.

                                               13
malicious interference with a lawful occupation,45 and malicious libel.46 Beyond this, the

Supreme Court, lower federal courts, and other state courts have consistently held that

one type of wrongful-discharge case is not preempted—wrongful discharge for claiming

workers’ compensation benefits.47 But in most other cases that involve union activity,

claims for wrongful discharge are preempted.

         The wrongful-discharge cases in which courts have found no NLRA exception

more closely resemble the case at hand than those in which they have found an exception.

Courts have extended preemption to cases alleging wrongful discharge under state

constitutions, state statutes, state common law, and violations of state public policy. In

some, if not all, of these cases, the state has an interest in regulating the conduct at

issue.48 However, the prevailing consideration is not whether the state has an interest in

43
     Youngdahl v Rainfair, Inc, 355 US 131, 139; 78 S Ct 206; 2 L Ed 2d 151 (1957).
44
     Sears, 436 US at 207.
45
     UAW v Russell, 356 US 634, 646; 78 S Ct 932; 2 L Ed 2d 1030 (1958).
46
  Linn v United Plant Guard Workers, 383 US 53, 62; 86 S Ct 657; 15 L Ed 2d 582
(1966).
47
  See Lingle v Norge Div of Magic Chef, Inc, 486 US 399, 108 S Ct 1877; 100 L Ed 2d
410 (1988); Peabody Galion v Dollar, 666 F2d 1309 (CA 10, 1982); Veal v Kerr-McGee
Coal Corp, 682 F Supp 957 (SD Ill, 1988) (holding that three of four claims of wrongful
discharge were preempted by the NLRA, excepting only wrongful discharge for
exercising rights under workers’ compensation law); Ruiz v Miller Curtain Co, Inc, 702
SW2d 183 (Tex, 1985).
48
     Indeed, in some of these cases, the state’s interests may be considered deeply rooted.

                                               14
protecting a plaintiff from some employer action, but whether that interest is distinct from

the actions the NLRA guards against.49

         Courts have held that wrongful-discharge claims are preempted by the NLRA

despite strong state interests in regulating the conduct. Consider, for example, that at

least one federal court and several state courts have held that claims of wrongful

discharge in violation of public policy are preempted by the NLRA.50 In one of these

violation-of-public-policy cases, Lontz v Tharp, the factual background was similar to

this case insofar as plaintiffs in both cases allege facts that demonstrate that they had tried

to assist unions.51 Additionally, one federal court has held that a claim for wrongful

discharge based in the common law of contracts was preempted by the NLRA.52 In that

case, Morris v Chem-Lawn Corp, the court looked through the plaintiff’s breach-of-

employment-contract claim and held that it was preempted because the substance of the

49
   Cf. Sears, 436 US at 197 (asking whether the “controversy presented to the state court
is identical to . . . or different from . . . that which could have been, but was not, presented
to the Labor Board”); Farmer, 430 US at 294 (deciding that “the National Labor
Relations Board would not have jurisdiction to compensate petitioner for injuries such as
emotional distress, pain and suffering, and medical expenses, nor would it have authority
to award punitive damages”).
50
  See Hussaini v Gelita USA, Inc, 749 F Supp 2d 909 (ND Iowa, 2010); Robbins v
Harbour Indus, Inc, 150 Vt 604; 556 A2d 55 (1988); Lontz v Tharp, 220 W Va 282; 647
SE2d 718 (2007).
51
  See, e.g., Lontz, 647 SE2d at 722 (holding as preempted an employee’s claim that she
was wrongfully discharged for refusing to have a union organizer arrested, in violation of
public policy).
52
     See Morris v Chem-Lawn Corp, 541 F Supp 479 (ED Mich, 1982).

                                              15
claim was that she had been discharged for supporting a union.53 In another case similar

to this one, a state appeals court held that the NLRA preempted a state statutory claim for

wrongful discharge.54 That case, Kilb v First Student Transp, LLC, is akin to our case

both because it presents a conflict between the NLRA and a state statutory claim and

because it is a case in which the plaintiff was discharged for attempting to assist a

union.55 Finally, at least one federal court has held as preempted a claim for wrongful

discharge in violation of the most deeply rooted state interest of all, a state constitutional

right.56 In that case, Veal v Kerr-McGee Coal Corp, the court went out of its way to

explain that NLRA preemption did not depend on how strong the state’s interest was in

protecting its citizens.57 Rather, the cases governing the NLRA preemption exception

base their holdings on whether the state constitution and the NLRA governed the same

conduct. Because the two laws attempted to govern the same employer conduct, the claim

was preempted because permitting any tribunal but the NLRB to adjudicate the claim

presented a great risk that the state constitutional right would conflict with the “federal

regulatory scheme.”58

53
     Id. at 483.
54
     See Kilb v First Student Transp, LLC, 157 Wash App 280; 236 P3d 968 (2010).
55
   Id. at 283-284 (holding as preempted the plaintiff’s claim that he was wrongfully
discharged for refusing to discharge pro-union employees and refusing to engage in the
employer’s anti-union efforts, in violation of state law).
56
     Veal, 682 F Supp at 957.
57
     Id. at 960-961.
58
   Id. at 960 (“While it cannot be seriously argued that the interest of the State of Illinois
in protecting its workers from wrongful discharge for exercising their state constitutional

                                             16
       This case bears a greater resemblance to the aforementioned no-exception cases

than to the cases that find a preemption exception. In this case, plaintiffs were employees

of a union who noticed that certain union officials were incorrectly reporting the union

members’ activities for the purpose of paying them out of the strike fund when the

members had actually been making repairs on a building. Alarmed, plaintiffs reported to

the USDOL, on the union members’ behalf, that a union official might have embezzled

union funds or otherwise violated his statutory duty not to profit from his position as a

union official.59 This was an attempt to assist the union members; the fact that the claims

were criminal in nature is immaterial. The unfair labor practice in this case is not the

alleged criminal actions—embezzlement or breach of fiduciary duty. Plaintiffs never

alleged a cause of action for embezzlement or breach of fiduciary duty in the circuit

court; therefore, the employer’s alleged criminal conduct does not constitute the unfair

labor practice.   The unfair labor practice here is the wrongful discharge of these

employees. In this case, the claim for wrongful discharge under the WPA essentially

prohibits the same employer conduct as a claim of unfair labor practices under § 8 of the

NLRA. An employer may not discharge an employee for attempting to assist a labor

organization. Thus, because the conduct of the employer would be prohibited by the

NLRA in the same way that it would be prohibited under Michigan law, Michigan has no

right to association deserves little weight, it is manifest that this Court’s judicial
recognition of that interest poses a serious threat of interference with the federal
regulatory scheme embodied by Congress’ creation of the NLRB . . . .”).
59
  See Plaintiffs’ Answers to Defendants’ First Set of Interrogatories, Appellants’
Appendix, p 56a.

                                            17
deeply rooted interest in hearing plaintiffs’ WPA claims, which allege the very same

unlawful conduct as an unfair-labor-practice claim under the NLRA.60 And because the

employer’s discharge of plaintiffs for protected activities is a preeminent rather than a

peripheral concern of the NLRA, any claims arising from the wrongful discharge must

“be left in the first instance to the National Labor Relations Board.”61

          Though the majority is correct that Michigan’s WPA statute protects important

state interests that are often different than the NLRA’s main concerns, this is not the

question that we must answer. This case is not about whether the WPA protects an area

of law that is of peripheral concern to the NLRA; indeed, if it did not, it would be

completely preempted by the NLRA. Instead, the issue is whether the controversy is of

peripheral concern to the NLRA. Because a discharge for assisting a labor union would

be an unfair labor practice under the NLRA, Michigan has no deeply rooted state interest

in deciding that controversy for its citizens, and the NLRA will provide the relevant

relief.

                III. ANTICIRCUMVENTION AND NLRA PREEMPTION

          Plaintiffs’ WPA claims represent a classic example of unacceptable NLRB

circumvention by artful pleading. Courts adjudicating NLRA preemption are rightfully

60
   Compare Farmer, 430 US at 304, which held that the plaintiff’s IIED claim was not
preempted because the state court would not have to reach the “merits of the underlying
labor dispute.” (Quotation marks omitted.) In this case, the WPA wrongful-discharge
claim jeopardizes the NLRB’s exclusive jurisdiction over labor disputes because of the
risk that the WPA would adjudicate the same, federally protected and prohibited conduct
differently.
61
     Garmon, 359 US at 244-245.

                                             18
concerned about circumvention, which would undermine the NLRB’s exclusive

jurisdiction over labor disputes. One example of circumvention through artful pleading

that courts have struck down is the identical-elements test, under which plaintiffs

incorrectly allege that, because the elements of their state-law claim and the elements of

unfair labor practices under the NLRA are not identical, their state-law claim should not

be preempted.      Courts reject the identical-elements test because it undermines the

NLRB’s exclusive jurisdiction. For example, in Hussaini v Gelita USA, Inc, the United

States District Court for the Northern District of Iowa stated that there was no identical-

elements test because an “NLRB proceeding and a state-law cause of action will, by

definition, deal with different claims and if this lack of identity were conclusive, state

claims would never be preempted.”62 Likewise, the court in Robbins v Harbour Indus,

Inc eschewed formalism in holding that “[t]he characterization of the claim under state

law has little, if any, bearing on the outcome of the preemption issue. Rather, cases

applying the exception for conduct which is only of peripheral concern to the NLRA

almost always involve an analysis of the facts underlying the state action” to determine

whether the “controversy presented to the state court is identical to . . . or different from”

the controversy that could have been presented to the NLRB.63 It does not matter what

terms a plaintiff’s state claim is couched in when the “basis of [the plaintiff’s] claim, as

revealed [by discovery], is that [the] employer discharged [the employee] because of [the

62
     Hussaini, 749 F Supp 2d at 921.
63
     Robbins, 556 A2d at 57, quoting Sears, 436 US at 197 (quotation marks omitted).

                                             19
employee’s] support of” a union64—whether that be aid in its formative stages or

assistance sometime down the road.

         The majority’s ruling enables plaintiffs to circumvent the exclusive jurisdiction of

the NLRB simply because they alleged criminal conduct to the USDOL. In doing so, the

majority overlooks the fact that plaintiffs alleged that the criminal conduct violated a

federal labor statute, 29 USC 501(a) and (c), which leads to the key conclusion that

plaintiffs took the steps that they did to assist the members of the labor union. Labor

union members are in need of this type of assistance because any right to bargain for the

members’ collective good might be undermined by corrupt union leadership that

embezzles union funds or prioritizes its own profit over the interests of the members.

Because the NLRA preempts plaintiffs’ WPA claims in full, I dissent.

                                                          Brian K. Zahra

64
     Morris, 541 F Supp at 482.

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