Smith v. Houston Oilers Inc.

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 1, 1996
• Docket: 95-20073
• Status: Published

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 95-20073

SHERMAN SMITH; TRACY SMITH, Plaintiffs-Appellants Cross-Appellees,

versus

HOUSTON OILERS, INC., doing business as The Houston Oilers; FLOYD REESE; STEVE WATTERSON, Defendants-Appellees Cross-Appellants.

Appeal from the United States District Court for the Southern District of Texas

June 28, 1996

Before POLITZ, Chief Judge, and HIGGINBOTHAM and SMITH, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

Sherman Smith and Tracy Smith sued the Houston Oilers and

members of the Oilers' staff, alleging that the defendants required

their participation in an abusive rehabilitation program under

threats of being dismissed from the Oilers and blackballed from

other teams in the National Football League. The district court

dismissed the state claims based on the abusive rehabilitation

program on the ground that those claims were preempted by federal

labor law, but it remanded to state court related state claims of

intentional infliction of emotional distress to the extent that

those claims arose from the allegations of threatened blackballing. The players appeal the dismissal, and the Oilers cross-appeal the

order remanding to state court.

We conclude that all claims are preempted by federal labor

law. We affirm the dismissal, vacate the order remanding to state

court, and remand with instruction to dismiss those claims as well.

I.

Sherman Smith and Tracy Smith alleged the following facts, and

we accept them as true in the present posture of the case: Sherman

Smith and Tracy Smith each signed a one-year contract to play

professional football for the Houston Oilers. During preseason

training camp in the summer of 1994, Sherman broke his thumb and

Tracy tore a leg muscle. These injuries prevented them from

playing, and they were placed in a routine rehabilitation program

with other injured players. In the first week of required player

cuts, however, the Oilers sought to dismiss Sherman and Tracy. But

since the National Football League prohibits teams from terminating

football players while they are recovering from football-related

injuries, the Oilers offered to settle Sherman's and Tracy's

contracts for a "meager" sum if they left voluntarily. Sherman and

Tracy rejected these offers.

According to the Smiths’ allegations, Floyd Reese and Steve

Watterson of the Oilers responded by compelling Sherman and Tracy

to submit to severe abuse in a phony "rehabilitation" program

designed to coerce them into leaving the team. The abuse, they

allege, included: reduction of rehabilitation treatment previously

2 allowed, such as stretching and ice treatment; sleep deprivation

resulting from morning workouts beginning at 4:00 a.m. and evening

workouts ending at 11:00 p.m.; strenuous exercise that far exceeded

previous demands, including humiliating water-barrel-pulling

exercises; veiled threats of dismissal for noncompliance with

rehabilitation; intentional confusion as to workout schedules; and

threats to blackball Sherman and Tracy from playing for other NFL

teams in the future.

No other players participated in this abusive program. Three

days after Sherman and Tracy began the program, Sherman collapsed

during a 4:00 a.m. workout and was taken to the hospital. Later

that day, Tracy complained to the NFL Players Association, after

which the Oilers ceased the program.

Sherman Smith and Tracy Smith sued the Houston Oilers, Reese,

and Watterson in Texas state court, alleging state law claims of

coercion, duress, extortion, assault and battery, and intentional

infliction of emotional distress. The Oilers removed to federal

court on the ground that the claims were preempted by § 301 of the

Labor Management Relations Act, 29 U.S.C. § 185. The Oilers then

moved to dismiss all claims under Fed. R. Civ. P. 12(b)(6), arguing

that their resolution turned on an analysis of the collective

bargaining agreement between the NFL and the players union, and

that the claims therefore had to be resolved pursuant to the CBA's

arbitration provisions. The players moved to remand the case to

state court, arguing that the district court lacked subject matter

jurisdiction over their state-law claims.

3 The district court dismissed the claims based on the abusive

rehabilitation program, agreeing with the Oilers that those claims

were preempted by LMRA § 301 because their resolution would require

analysis of the CBA. The court remanded to state court, however,

the players' claims of intentional infliction of emotional distress

based on alleged blackballing threats, concluding that blackballing

threats "could not possibly be sanctioned by any labor contract."

The players appeal the dismissal of their non-blackballing claims.

The Oilers cross-appeal the order remanding the players' claims of

infliction of emotional distress based on threatened blackballing.

II.

The players bring two arguments. First, the players contend

that the district court erred in holding that their claims of abuse

were "inextricably intertwined" with the CBA and hence preempted by

§ 301 of the LMRA. Second, in the alternative, they argue that the

district court erred in deciding that the Oilers' alleged conduct

was not sufficiently outrageous to override § 301 preemption under

Farmer v. United Bhd. of Carpenters & Joiners, 490 U.S. 290 (1977).

We conclude that the district court properly dismissed the claims

based on the allegedly abusive rehabilitation program.

A.

Section 301 of the LMRA provides: "Suits for violation of

contracts between an employer and a labor organization representing

employees in an industry affecting commerce . . . may be brought in

any district court of the United States having jurisdiction of the

4 parties." 29 U.S.C. § 185. The Supreme Court has held that LMRA

§ 301 preempts state-law claims that are "substantially dependent

upon analysis of the terms of an agreement made between the parties

in a labor contract." Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,

220 (1985). Accordingly, "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 preempted and federal labor-law principles — necessarily

uniform throughout the nation — must be employed to resolve the

dispute." Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399,

405-06 (1988).

In considering a claim of intentional infliction of emotional

distress, we have stated that "the question of preemption turns on

whether the conduct upon which the claim is grounded is governed by

the CBA. If the agreement would not condone the activity, there is

no preemption. If the conduct arises out of activities covered in

the agreement, however, courts generally hold that the emotional

distress claim is preempted." Baker v. Farmers Elec. Coop., Inc.,

34 F.3d 274 (5th Cir. 1994). Thus, on this view, LMRA preemption

typically does not occur "where the allegedly tortious conduct

could not have been sanctioned by the CBA, for example in cases

concerning assault and battery or sexual harassment." Id. at 281;

see Reece v. Houston Lighting & Power Co., 79 F.3d 485, 487 (5th

Cir. 1996) (concluding that LMRA § 301 preempted state-law claims

of discrimination and intentional infliction of emotional distress

5 because resolution of claims would require interpretation of CBA

provisions on promotion, seniority, and training assignments).

The district court here concluded that LMRA § 301 preemption

applied because the CBA authorized NFL teams to require players to

participate in rehabilitation programs. The court explained:

In the instant matter, most of the alleged tortious conduct revolved around the required participation by the players in a rehabilitation program. Rehabilitation programs are condoned by the CBA and the individual player contracts. For example, paragraph 8 of the player contract states that the player warrants he will maintain excellent physical condition. Article [VIII] of the CBA further provides that `material failure to follow rehabilitation program prescribed by Club physician or trainer' can result in a maximum fine of $1,000. It is evident from these provisions that the underlying conduct of the team and the individual defendants could be permitted by the CBA. Accordingly, the Court determines that the causes of action which stem from the `abusive' rehabilitation program are inextricably intertwined with the CBA and are therefore preempted by § 301.

The players do not dispute that the CBA at issue here permits NFL

teams to require their players to participate in rehabilitation and

conditioning programs. Rather, the players urge that the district

court erred because the Oilers' demands in rehabilitation were so

egregious that the CBA could not possibly have condoned them.

The players contend with considerable force that LMRA § 301

preemption generally does not apply to claims based on certain

types of tortious conduct that a CBA could never condone, such as

physical battery. But such inquiry into whether a CBA "condoned"

a defendant's conduct is only a means for addressing the ultimate

question whether "resolution of a state-law claim depends upon the

meaning of a collective-bargaining agreement." Lingle 486 U.S. at

405-06. Where the complained-of actions consist entirely of an

6 employer's physical battery of an employee, there is no need for

reference to a labor agreement; in such cases, it typically makes

sense to say that, because the CBA at issue could not have condoned

such conduct, resolution of the plaintiff's claim for battery does

not depend on the meaning of the terms of the CBA. This comports

with an underlying appreciation that the employer's physical attack

on the employee is properly regarded as an issue of state law, not

a matter of federal labor concern.

Here, however, the alleged misconduct cannot be separated from

the underlying dispute between the players and the Oilers over the

adequacy of the Oilers’ offer of termination pay. That dispute is

fundamentally a labor dispute; indeed, the abuse complained-of by

the players occurred only because they wanted to remain with a team

that did not want them. There is no allegation that anyone from

the Oilers’ management or staff committed a direct act of physical

violence against Sherman Smith or Tracy Smith. Rather, the abuse

of the two players resulted from their compelled participation in

an ostensible rehabilitation program under threats of termination

or blackballing. The players could have avoided the abuse by

refusing to participate. In sum, the complained of conduct was the

Oilers' unreasonable negotiating position regarding termination,

not any infliction of violence upon the two players.

The players could have complained to the league office

earlier. The quick response to their complaint belies the effort

to distance the dispute over contract rights and excessive workout

schedules from the CBA. Indeed, since the labor dispute is at the

7 heart of the players' complaints, we think that those complaints

are not too peripheral a concern for the federal labor laws. In

short, because we are persuaded that the underlying labor dispute

over termination pay cannot be divorced from the Oilers' conduct in

forcing the players to choose between the terms of termination and

an excessively demanding rehabilitation program, we conclude that

resolution of the players claims in this case of professional

athletes is too dependent on an analysis of the CBA to escape § 301

preemption.

Another way of stating this is that we have here a case

involving contract rights, not condoned violence. That is to say,

players can legally consent to challenging workouts and rigorous

rehabilitation sessions. Whether the Oilers had a legal right to

require the players either to endure the workouts or quit is

therefore a question of contract law. As the contract at issue is

a CBA, federal, not state, law governs.

B.

The players contend in the alternative that if their claims

are otherwise preempted, they are nevertheless entitled to pursue

their claims in state court under an exception to federal

preemption where the defendants' "outrageous conduct" is merely a

peripheral concern of federal law. See Farmer v. United Bhd. of

Carpenters & Joiners, 430 U.S. 290 (1977). In Farmer, a union

officer claimed intentional infliction of emotional distress under

California law, alleging that other union officers had engaged in

"outrageous conduct, threats, intimidation, and words," causing him

8 "grievous mental and emotional distress as well as great physical

damage." Id. at 301. In deciding whether the claim was preempted,

the Supreme Court cautioned that "inflexible application of the

[preemption] doctrine is to be avoided, especially where the State

has a substantial interest in regulation of the conduct at issue

and the State's interest is one that does not threaten undue

interference with the federal regulatory scheme." Id. at 302; see

also San Diego Bldg. Trade Council v. Garmon, 359 U.S. 236, 243-44

(1959) (emphasizing that preemption does not occur where conduct

"was a merely peripheral concern of the [LMRA, . . . 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 State of the power

to act"). The Court concluded that the federal labor laws did not

preempt the union officer's emotional-distress claim, explaining

that "there is no federal protection for conduct on the part of

union officers which is `so outrageous that no reasonable man in a

civilized society should be expected to endure it.'" Id. at 303.

We agree with the district court that the Oilers' alleged

misconduct was not sufficiently outrageous to defeat preemption

under Farmer. That is, since we think it necessary to refer to the

CBA to determine the extent to which the Oilers' rehabilitation

demands were permissible, it is likewise necessary to measure the

outrageousness of their conduct by reference to what the CBA

authorizes. Cf. Reece, 79 F.3d at 487 (holding that LMRA § 301

preempted plaintiff's claim of intentional infliction of emotional

9 distress after observing that, "to evaluate whether [defendant's]

conduct was `outrageous,' the conduct must be measured against the

CBA").

III.

The Oilers argue on cross-appeal that the district court erred

in remanding to state court the players' claims of intentional

infliction of emotional distress resulting from the Oilers' alleged

blackballing threats. The Oilers contend that such claims based on

allegations of threatened blackballing are claims of unfair labor

practices, and as such are preempted by § 7 and § 8 of the National

Labor Relations Act, 29 U.S.C. § 151 et. seq. Though the Oilers

are asserting NLRA preemption for the first time on appeal, we may

consider the argument since NLRA preemption is an issue of subject

matter jurisdiction. See International Longshoremen's Ass'n, AFL-

CIO v. Davis, 476 U.S. 380, 389-93 (1986).

We agree that NLRA §§ 7 and 8 preempt the players' claims of

intentional infliction of emotional distress based on blackballing

threats. Section 8(a) of the NLRA provides, in relevant part, that

"[i]t shall be an unfair labor practice for an employer — (1) to

interfere with, restraint, or coerce employees in the exercise of

the rights guaranteed in [NLRA § 7]." 29 U.S.C. § 158(a). Section

7 of the NLRA in turn states:

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

10 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 section 158(a)(3) of this title.

29 U.S.C. § 157. "When an activity is arguably subject to § 7 or

§ 8 of the [NLRA], 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." Garmon, 359 U.S. at 245.

The players do not dispute that blackballing is an unfair

labor practice proscribed by § 7 and § 8 of the NLRA; rather, they

argue that because they did not engage in any "concerted activity"

as contemplated by NLRA § 7, the NLRA does not govern the Oilers'

blackballing threats, which were directed toward the players' non-

concerted activity. This argument lacks merit. See NLRB v. City

Disposal Sys., Inc., 465 U.S. 822, 840-41 (1984) (holding that

honest and reasonable invocation of collectively bargained right

constitutes "concerted activity" under § 7 of NLRA). We conclude

that § 7 and § 8 of the NLRA preempt the emotional-distress claims

based on the Oilers' blackballing threats.

IV.

We AFFIRM the district court's dismissal of the plaintiffs'

claims based on the abusive rehabilitation program. We VACATE and

REMAND to the district court its order remanding to state court the

claims of intentional infliction of emotional distress based on

blackballing threats with instructions to dismiss those claims.