Kerschion v. Public Service Co.

2002 NMCA 045, 45 P.3d 59, 132 N.M. 119
CourtNew Mexico Court of Appeals
DecidedMarch 4, 2002
DocketNo. 21,284
StatusPublished
Cited by3 cases

This text of 2002 NMCA 045 (Kerschion v. Public Service Co.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kerschion v. Public Service Co., 2002 NMCA 045, 45 P.3d 59, 132 N.M. 119 (N.M. Ct. App. 2002).

Opinion

OPINION

ROBINSON, Judge.

{1} Public Service Company of New Mexico (PNM) appeals from the trial court’s $31,000 judgment in Appellee Richard Kerschion’s favor. Kerschion claimed that PNM, by its representatives, negligently misrepresented the terms of a severance package offered to him as an incentive to leave PNM’s employ, and in addition, breached contract terms, inflicted emotional distress, and committed a prima facie tort. PNM maintained that Kerschion was entitled only to the standard retirement plan, rather than severance pay and the special enhancement, because he failed to comply with the terms of the union-negotiated severance package offered to all employees. We hold that Kerschion’s state law claims are’preempted by federal labor law, and the district court erred in failing to dismiss them.

FACTUAL AND PROCEDURAL BACKGROUND

{2} Kerschion worked for PNM at the San Juan Generating Station, and was a member and former steward of the International Brotherhood of Electrical Workers Local Union No. 611 (Union). The Union had negotiated a series of collective-bargaining agreements that governed the terms and conditions of the employment of PNM employees, including Kerschion.1 In 1996, PNM determined that due to systemic changes, the San Juan Generating Station would require fewer employees in coming years. In order to smoothly effectuate the reduction in force, PNM and the Union came to a Mutual Agreement, which the Union ultimately ratified by vote. The Mutual Agreement provided a $5000 enhancement to the Collective Bargaining Agreement’s severance package for employees who volunteered for layoff within a particular window of time. Kersehion himself voted in favor of the Mutual Agreement.

{3} Specifically, the Mutual Agreement guaranteed that employees would receive notice ninety days before the layoff date, which would fall sometime after June 1, 1998. It also required that employees sign a release of claims against PNM. The severance package would be payable upon layoff. ■ In February 1997, Kersehion signed a declaration of intent to participate in the layoff program and sign the release. Subsequently, Kerschion became concerned that signing the release would prevent him from collecting on a pending workers’ compensation claim. He wrote a letter to a PNM representative dated April 8, 1997, requesting clarification. It is not clear from the record whether the release would have affected Kersehion’s workers’ compensation benefits, but the PNM representative reassured Kersehion by adding language to the Release Agreement that purported to insure that Kersehion would not be waiving any workers’ compensation claim by signing the agreement. However, the new language mistakenly was added to a prior, rejected version of the Release Agreement that contained a blank space for the termination date. Kersehion asked what he should write in that space and erroneously was told to insert “today’s date,” or April 10, 1997.

{4} Four days later, PNM realized its error and presented Kersehion with a corrected Release Agreement, in conformance with the version negotiated and settled upon by the Union and management. A Union representative told Kersehion that the document he had signed was not a legal document because it was not what the Union had agreed would be signed by all employees. Both PNM and the Union told Kerschion that he had to sign the corrected agreement in order to receive the severance money. Kersehion refused, and let lapse the forty-five day period allowed for signing to lapse. As a result, PNM told him that he was not entitled to any severance. Kerschion filed a grievance asserting PNM failed to comply with the rejected version of the Release Agreement and asserting PNM violated the severance section of the Collective Bargaining Agreement. PNM denied the grievance. The Union assisted Kerschion in appealing the denial. The appeal was denied in November 1997. The decision stated that Kerschion’s grievance was untimely, and therefore treated as a complaint, which PNM refused to honor.

{5} In December 1997, Kersehion gave written notice of his retirement, effective March 1, 1998. In February 1998, he filed a declaratory judgment action and complaint for breach of contract, breach of the covenant of good faith and fair dealing, and intentional or reckless infliction of emotional distress, requesting the enforcement of the non-standard Release Agreement he had signed. At a post-trial hearing, the court permitted Kerschion to amend his complaint to include a claim of negligent misrepresentation. The district court awarded Kersehion $31,000 in damages for negligent misrepresentation, which included $26,000 in accordance with the severance provision of the Collective Bargaining Agreement and the $5000 enhancement that was offered to employees at the San Juan site through the Mutual Agreement.

DISCUSSION

Federal Preemption

{6} Section 301(a) of the LMRA, 29 U.S.C. § 185(a) (1998), directs that “[sjuits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in 'any district court of the United States having jurisdiction of the parties.” Section 301 bears a preemptive effect upon claims raised in state court that require the interpretation or application of a collective-bargaining agreement. See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 394, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209-210, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). The purpose of Section 301(a) preemption is

to assure that the purposes animating § 301 will be frustrated neither by state laws purporting to determine “questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement,” nor by parties’ efforts to renege on their arbitration promises by “relabeling” as tort suits actions simply alleging breaches of duties assumed in collective-bargaining agreements.

Livadas v. Bradshaw, 512 U.S. 107, 122-23, 114 S.Ct. 2068, 129 L.Ed.2d 93 (1994) (citation omitted).

{7} Our Supreme Court in Self v. United Parcel Service, Inc., 1998-NMSC-046, 126 N.M. 396, 970 P.2d 582, addressed this issue, holding, in keeping with United States Supreme Court precedent, that claims which require interpretation of a collective-bargaining agreement are either “substantially dependent” on the analysis of the collective-bargaining agreement or “inextricably intertwined” with interpretation of its terms, and must be decided by federal law. Id. ¶ 12 (citations omitted). Therefore, the dispositive question in the instant case is whether Kerschion’s claims are substantially dependent or inextricably intertwined with the analysis or interpretation of the negotiated collective-bargaining agreements between the Union and PNM.

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Bluebook (online)
2002 NMCA 045, 45 P.3d 59, 132 N.M. 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kerschion-v-public-service-co-nmctapp-2002.