by Micaela Heery1
Collective bargaining agreements are ubiquitous in the field of labor law. These agreements have allowed parties to overcome some of the inherent complexities of collective action and reconfigure the balance of power between employers and employees, often through union representation. Many collective bargaining agreements mandate private arbitration as the initial forum to resolve disputes.2 Perhaps because of the preference for arbitration, the case law is unsettled in situations in which parties bring claims that are related to the collective bargaining agreement to court, rather than to arbitration.
Plaintiffs, usually individual employees, sometimes sue in federal court over employment-related disputes, despite the presence of an arbitration clause in a collective bargaining agreement. That is, employees might try to claim that the collective bargaining agreement does not cover their claims. Employers, in their defense, often refer to the mandatory arbitration clause of the agreement.3 Section 301 of the Labor Management Relations Act provides federal jurisdiction and a federal body of common law to hear claims of this nature.4 But federal courts have divided on how to decide which claims are sufficiently distinct to be heard in court from those that must be arbitrated under the collective bargaining agreement.5 These decisions involve a common conflict of trying to establish judicially manageable standards.6
A complicating factor in this analysis is that section 301 of the Labor Management Relations Action allows collective bargaining agreements to preempt state law that interferes with the uniform interpretation of collective bargaining agreements.7 Thus, many courts have noted serious questions about the extent to which private bargaining agreements can supplant state law.8
This Contribution argues that courts considering whether collective bargaining agreements preempt state claims should standardize their analyses in the following way. First, courts should consider whether the claim is independent of, i.e. not covered by, the collective bargaining agreement. Independence should be evaluated with a two-prong inquiry: whether the right arises from an independent body of law (a state regulation, rather than the collective bargaining agreement, for example); and whether the claim depends on an interpretation of the collective bargaining agreement. If the plaintiff establishes that the claim is independent under this test, then the court should usually not find preemption of the claim.
However, this analysis can and often should include a consideration of the two overarching policy concerns that underlie these analyses. First, allowing preemption in some cases could potentially undermine a State’s police powers. Second, finding a claim not to be preempted may interfere with the development of a uniform nationwide standard of federal labor law. This in turn would reduce private parties’ abilities to predict how terms of collective bargaining agreements will be interpreted. This second layer of analysis could function as a tiebreaker. That is, if the initial independence inquiry is not clear, courts should use their discretion in light of evidence of either of the above concerns to determine preemption based on the weight of the competing concerns. This approach infuses what could be an overly formalistic inquiry of “independence” with prevalent concerns about federalism and a congressionally-supported federal arbitration regime.
Because of this, the consideration of these factors should not only be used in the event of “close calls.” Rather, courts should also infuse their analysis of independence with these considerations so as to prevent an overly formalistic inquiry into independence that results in abstract rules that bear no correlation to tangible concerns about the impossibility of complying with state rules or on the other hand a broad preemptive power.
* * * * *
In some labor disputes involving collective bargaining agreements, section 301 of the LMRA provides both federal jurisdiction and a body of federal law for the arbitration of those controversies.9 The mere fact that a dispute concerns a collective bargaining agreement is not sufficient to invoke the use of federal labor law through section 301 of the LMRA.10 For example, a collective bargaining agreement can be a relevant fact of a dispute without requiring its interpretation. In this area of law, there is no suggestion of field preemption, as Congress has never exercised authority to occupy the entire area of labor legislation.11
The Supreme Court has used the term “independence” to describe the necessary threshold a plaintiff must meet to avoid preemption of their claim. However, the Court at various times has described independence differently. In Allis-Chalmers v. Lueck, the Court presented two different ways of determining independence: either the state law provided nonnegotiable state rights (thus establishing independence), or the claim was “inextricably intertwined” with an interpretation of the terms of the contract itself.12
At times the Court has painstakingly determined the actual source of rights. In Allis-Chalmers, for example, an employee brought a tort action against his employer for bad faith handling of an insurance claim that was guaranteed as part of a collective bargaining agreement. Wisconsin tort law allowed this type of suit despite its origin in a collective bargaining agreement.13 Because the tort dispute could not be decided without determining the duties the collective bargaining agreement created, the claim was not independent.14 By contrast, in Lingle v. Norge Division of Magic Chef, Inc.,15 the Court found no preemption because the Illinois tort claim concerned purely factual questions about employer and employee conduct, and thus “d[id] not require construing the collective-bargaining agreement.”16 Moreover, even if the collective bargaining agreement did not exist between the parties, the plaintiff in Lingle would still have an independent claim under state law.17
The problem with this analysis is that the dichotomy does not always exist. It is possible to have a right established under state law that still involves interpretation of the contract.18 Thus, the either/or analysis will not answer all inquiries. In some cases, there may be an awkward fit between an independent state right and a seemingly complicated question of contractual interpretation. To clarify this analysis, courts should recognize that both the source of the right in question and the necessity of interpreting the collective bargaining agreement are part of the definition of independence. Non-independence on one ground may not result in the entire claim being non-independent. If a claim satisfies both senses of independence—if it arises under a body of law independent of the collective bargaining agreement, and if it does not turn on an interpretation of the collective bargaining agreement—the claim should probably not be preempted. If a claim does not satisfy either definition of independence, then the claim probably should be preempted.19 However, if it is unclear whether a claim is independent in both senses, a court should refer to other concerns to determine preemption: the states’ interest in regulation; and the parties’ interest in having collective bargaining agreements governed by consistent national standards.20
* * * * *
Courts should look to two different policy considerations to guide their decisions when an independence inquiry does not produce a clear outcome. Additionally, even in cases with a clear outcome according to independence may have extreme effects on the federal arbitration regime or states regulatory regimes that should be taken into account.
One concern in these cases is that private parties will be able to use collective bargaining agreements to avoid complying with state law regulations. In Allis-Chalmers, for example, the Court appears to limit the power to contract around law: “[c]learly, § 301 does not grant the parties to a collective-bargaining agreement the ability to contract for what is illegal under state law.”21 But section 301 does allow for collective bargaining agreements to preempt state law when it interferes with the uniform interpretation of these agreements, so this statement does not provide a clear sense of what parties cannot do. Perhaps the Allis-Chalmers Court meant that parties cannot use a collective bargaining agreement to hire individuals for murder, as that is against state criminal law. But outside such an extreme case, what is the limit? Could collective bargaining agreements contract around minimum wage?23 Because the section 301 preemption power lacks clear boundaries, it is a powerful one.24 Thus, one factor to consider is the effect that preemption would have on a State’s police powers.
The presumption against taking away States’ historic police power is especially strong in the area of labor law. The Supreme Court has ruled that “pre-emption should not be lightly inferred” in labor law, “since the establishment of labor standards falls within the traditional police power of the State.”25 Unless Congress has expressly indicated otherwise, courts generally assume that the police power is not preempted.26 It could be argued that Congress’ passage of section 301 of the Labor Management Relations Act speaks sufficiently to this issue in addition to a general shift towards encouraging arbitration.27 However, even with those consideration in mind, unbridled preemption in the field of labor law would fundamentally alter federalism in a way that we should not hastily presume without true clarity from Congress.28
Additionally, courts should consider the unique interests of employers and about the uniform interpretation of labor law. While employees may assert that their state rights are being preempted, employers may argue that parties freely agreed to this arrangement. Because of the inherent difficulty in creating collective bargaining agreements and creating uniform nationwide standards, in some cases the contract may represent the balance that state interests and private parties need to resolve labor disputes. If, for instance, a party brings evidence of conflicting state standards, that would be valuable evidence for the court to consider. A company with employees in multiple states might be unable in some cases to comply with every state regulation.29 Therefore, allowing that company to agree to a standard with its employees through a collective bargaining agreement would avoid conflict and create a manageable way to conduct business.
By considering these policy factors subsequent to the independence analysis, courts would best achieve the federalism balance Congress sought through section 301 of the Labor Management Relations Act. Consider, for example, the problem presented the Tulane Law School Mardi Gras Sports Law Invitational.30 In that case the definition of independence points more heavily towards not preempting the claim. The claim was brought under Minnesota law creating an independent, statutory right that would exist regardless of the collective bargaining agreement. Whether or not the claim required interpretation of the agreement is a closer call. However, a plausible argument can be made that only the behavior of the NHL had to be analyzed, rather than the collective bargaining agreement in its entirety. Therefore, the claim seems to be independent. Considering state’s police powers, as part of the second prong, also weighs in favor of finding no preemption. However, if the parties could present sufficient evidence about the impossibility of the NHL creating a nationwide standard—because of conflicting state law—for its competitive league, perhaps preemption would be advisable. The evidence, however, would have to be strong to overcome the presumption that the independence of the claim.
* * * * *
The current legal landscape for determining whether a claim is independent of a collective bargaining agreement is murky. Courts should clarify the doctrine surrounding these cases with two major adjustments. First, they should explicitly recognize that independence involves two separate considerations: whether the claim arises under body of law independent of the collective bargaining agreement, and whether the claim depends on interpreting the collective bargaining agreement. Second, if the question of independence is not clear or if parties demonstrate compelling reasons to do so, courts should consider factors such as a State right to regulate labor or the benefits of uniform nation standards.
Recommended Citation: Micaela Heery, Is This What We Bargained For?: Allowing the Preemption of State Law through Collective Bargaining Agreements, 2018 N.Y.U. Proceedings 8, http://proceedings.nyumootcourt.org/2018/03/is-this-what-we-bargained-for/.
1. Micaela Heery is a 2L at New York University School of Law. This piece is a commentary on the 2018 Problem at the Tulane Law School Mardi Gras Sports Law Invitational held in New Orleans, Louisiana. The issue in the problem presented facts similar to Williams v. NFL, 582 F.3d 863 (8th Cir. 2009), which involved the Williams brothers (amongst other players) and the Minnesota Vikings. In both the problem and the Williams case, players were employed under a collective bargaining agreement that detailed procedures for drug testing. However, the State of Minnesota has its own law concerning drug testing in the workplace. One issue presented was whether section 301 of the Labor Management Relations Act preempted the state claims. The full brief for the competition, written by Micaela Heery and her competition partner, John Muller, will be published in a forthcoming edition of Tulane’s Sport Law Journal as the “Best Brief” of the competition.
2. See Stuart M. Boyarsky, Not What They Bargained For: Directing the Arbitration of Statutory Antidiscrimination Rights, 18 Harv. Negotiation L. Rev. 221, 225–228 (2013) (describing the Supreme Court’s recognition of the critical role of arbitration and its industry status as the preferred method of resolving labor disputes).
3. See, e.g., NFL Players Ass’n v. NFL, 654 F. Supp. 2d 960 (D. Minn. 2009), aff’d, 582 F.3d 863 (8th Cir. 2009) (holding that section 301 of the Labor Management Relations Act did not preempt claims made under state law). But see Textile Workers Union v. Lincoln Mills, 353 U.S. 448 (1957) (compelling parties to use agreed-upon arbitration at the behest of the labor union).
4. See 29 U.S.C. § 185; Lincoln Mills, 353 U.S. at 456 (“We conclude that the substantive law to apply in suits under § 301(a) is federal law, which the courts must fashion from the policy of our national labor laws.”).
5. See, e.g., Trs. of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d 324, 330 (8th Cir. 2006) (holding that plaintiff’s claims of fraudulent and negligent misrepresentation about a failure to contribute to benefit plan were preempted because the scope of the obligations depended on the collective bargaining agreement). But see Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 412–13 (1988) (finding no preemption because the claim did not depend on the interpretation of the collective bargaining agreement; however, the Court recognized that although the contract might condone the retaliatory treatment alleged, that would not change the result).
6. See, e.g., Martinez v. Kaiser Found. Hosps., No. C-12–1824 EMC, 2012 U.S. Dist. LEXIS 93091, at *1 (N.D. Cal. July 5, 2012) (“‘[t]he demarcation between preempted claims and those that survive § 301’s reach is not … a line that lends itself to analytical precision’ — after all, “‘[s]ubstantial dependence’ on a CBA is an inexact concept.’” (quoting Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 691 (9th Cir. 2001) (en banc)).
7. See Lingle, 486 U.S. at 405–06 (1988) (“if the resolution of a state-law claim depends upon the meaning of a collective-bargaining agreement, the application of state law (which might lead to inconsistent results since there could be as many state law principles as there are States) is pre-empted and federal labor-law principles—necessarily uniform throughout the Nation—must be employed to resolve the dispute.”).
8. See, e.g., Cramer, 255 F.3d at 695 n.9 (“Consolidated argues that the terms of CBAs affecting employees in multiple states should supersede inconsistent state laws. This contention overreaches, however, because the LMRA certainly did not give employers and unions the power to displace any state regulatory law they found inconvenient.”). But cf. Barbieri v. United Techs. Corp., 255 Conn. 708, 717–18 (2001) (“the former is a species of the complete preemption doctrine … and it does not divest state courts of subject matter jurisdiction, but simply supplants state substantive law.”).
9. See Lincoln Mills, 353 U.S. at 450–51.
10. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985) (“Of course, not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is pre-empted by § 301 or other provisions of the federal labor law.”).
11. Id. at 208 (“Congress, however, has never exercised authority to occupy the entire field in the area of labor legislation. Thus the question whether a certain state action is pre-empted by federal law is one of congressional intent.” (footnote omitted)).
12. See id. at 213 (“whether the Wisconsin tort action for breach of the duty of good faith as applied here confers nonnegotiable state-law rights on employers or employees independent of any right established by contract, or, instead, whether evaluation of the tort claim is inextricably intertwined with consideration of the terms of the labor contract. If the state tort law purports to define the meaning of the contract relationship, that law is pre-empted.”).
13. Id. at 203.
14. Id. at 220.
15. 486 U.S. 399 (1988).
16. Id. at 407.
17. See id. at 408–10 (“even if dispute resolution pursuant to a collective-bargaining agreement, on the one hand, and state law, on the other, would require addressing precisely the same set of facts, as long as the state-law claim can be resolved without interpreting the agreement itself, the claim is ‘independent’ of the agreement for § 301 pre-emption purposes.”).
18. See, e.g., Atwater v. NFL Players Ass’n, 626 F.3d 1170, 1181 (11th Cir. 2010) (finding preemption of a state law negligence claim because the collective bargaining agreement defined “the scope of any duty” owed).
19. This test preserves the possibility that, even if the results of both inquiries point to a certain resolution, the extreme nature of others concerns mentioned infra might necessitate drawing a different conclusion about independence. Thus, the question of independence prior to a court’s undertaking the analysis described infra might function as a strong but rebuttable presumption.
20. The two interests will be referred to as “policy considerations” throughout this Contribution.
21. Allis-Chalmers, 471 U.S. at 212.
22. See, e.g., Dixon v. Borgwarner Diversified Transmission Prods., No. 1:03-cv-00945-SEB-VSS, 2005 U.S. Dist. LEXIS 4273, at *13 (S.D. Ind. Mar. 15, 2005) (finding preemption of claim of constructive termination); Lewis v. Local 382, IBEW, 335 S.C. 562, 568 (1999) (finding preemption of claim based on violation of state “Right to Work” law).
23. Consider, for example, the problem posed in 2018 Problem at the Tulane Law School Mardi Gras Sports Law Invitational. Finding for the petitioner would allow the rules of a collective bargaining agreement to preempt a state regulatory regime setting standards for employee drug testing. Thus, the private standards would supplant the state ones, allowing the collective bargaining agreement to effectively sanction violations of state law.
24. Some take the view that the limit to collective bargaining agreement’s “power of preemption” are “nonnegotiable state-law rights .…” See Allis-Chalmers, 471 U.S. at 213. Of course, this only raises questions about which rights are in fact “nonnegotiable.”
25. Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21 (1987); see also Hawaiian Airlines v. Norris, 512 U.S. 246, 252 (1994).
26. Wyeth v. Levine, 555 U.S. 555, 565 (2009) (“we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” (internal quotation marks omitted)).
27. See United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581 (1960) (“Arbitration is the means of solving the unforeseeable by molding a system of private law for all the problems which may arise and to provide for their solution in a way which will generally accord with the variant needs and desires of the parties. The processing of disputes through the grievance machinery is actually a vehicle by which meaning and content are given to the collective bargaining agreement.”).
28. For example, section 301 of the Labor Management Relations Act does not mention preemption at all. See 29 U.S.C. § 185; Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 507 (1962) (“The legislative history of the enactment nowhere suggests that, contrary to the clear import of the statutory language, Congress intended in enacting § 301(a) to deprive a party to a collective bargaining contract of the right to seek redress for its violation in an appropriate state tribunal.”).
29. See, e.g., The NFL Starcaps Case: Are Sports’ Anti-Doping Programs at a Legal Crossroads?: Hearing Before the Subcomm. on Commerce, Trade, and Consumer Prot. of the H. Comm. on Energy and Commerce, 111th Cong. 121–22 (2009) (discussing the potential difficulties of enforcing uniform drug testing standards at a national level if there were conflicting state standards).
30. See supra note 1.