Vera v. Saks & Co.

335 F.3d 109, 2003 WL 21545850
CourtCourt of Appeals for the Second Circuit
DecidedJuly 10, 2003
DocketDocket No. 02-9141
StatusPublished
Cited by176 cases

This text of 335 F.3d 109 (Vera v. Saks & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vera v. Saks & Co., 335 F.3d 109, 2003 WL 21545850 (2d Cir. 2003).

Opinion

PER CURIAM.

Plaintiff appeals from the judgment entered by the United States District Court for the Southern District of New York (Koeltl, J.). The District Court denied plaintiffs motion to remand the case to state court, granted defendant’s motion for summary judgment dismissing plaintiffs claims for failure to exhaust grievance and arbitration procedures under a collective bargaining agreement, and denied plaintiffs motion for summary judgment on his state law claim. For the reasons that follow, we affirm the judgment of the District Court.

I. Facts and Procedural Background

Defendant Saks & Company (“Saks”) operates a retail store commonly known as Saks Fifth Avenue. Plaintiff had been employed at a Saks store as a shoe salesperson whose salary was based at least in part on commissions earned on the sale of shoes. As a member of United Storework-ers, Local 2567, RWDSU, AFL-CIO (“the union”), plaintiff was subject to the terms of a collective bargaining agreement (“CBA”) between Saks and the union. Paragraph 7 of the CBA detailed how plaintiffs compensation would be calculated, including tiered commission percentages tied to aggregate sales. Paragraph 7 of the CBA also included procedures for charging shoe returns against a salesperson’s commissions. In addition, paragraph 23 required that “[a]ny dispute, claim, grievance or difference arising out of or relating to this Agreement which the Union and the Employer have not been able to settle, shall be submitted to arbitration” (“the arbitration clause”). Further, it provided that “[i]n any arbitration, the arbitrator shall be bound by the terms of this agreement and shall have no authority to add to, subtract from, change or modify any provision of the agreement” (“the ‘no-change-or-modification’ or ‘no-change’ clause”).

When customers return shoes to Saks without a receipt, Saks is unable to identify the Saks salesperson who had originally sold the shoes and thus earned a commission based on the sale. To account for these so-called “unidentified returns,” the union and employer negotiated paragraph 7(F) of the CBA, which provides:

Unidentified Returns. Effective June 1, 1998, on a monthly basis, all unidentified returns to the New York Store will be charged back against commissions by deducting from sales volume for each salespersons [sic] a prorated figure calculated by dividing the total of said returns among the employees based on each employee’s percentage of net sales for that month.

Plaintiff filed this purported class action in New York State Supreme Court, New York County, in June 2000, alleging that the unidentified returns policy as set forth in the CBA and defendant’s actions in compliance with this policy violate New York Labor Law section 193 and the common law. Section 193 provides, in pertinent part, that:

1. No employer shall make any deduction from the wages of an employee, except deductions which:
a. are made in accordance with the provisions of any law or any rule or regulation issued by any governmental agency; or
b. are expressly authorized in writing by the employee and are for the benefit of the employee; provided that such authorization is kept on file on the employer’s premises. Such authorized deductions shall be limited to payments for insurance premiums, pension or health and welfare benefits, .contributions to charitable organizations, payments for United States [113]*113bonds, payments for dues or assessments to a labor organization, and similar payments for the benefit of the employee.
2. No employer shall make any charge against wages, or require an employee to make any payment by separate transaction unless such charge or payment is permitted as a deduction from wages under the provisions of subdivision one of this section.

N.Y. Lab. Law § 193 (McKinney 2002). Plaintiff alleged that defendant’s practices consistent with the unidentified returns policy constituted impermissible wage deductions in violation of section 193 because section 193 prohibits deductions from wages for nonspecified items; unidentified returns deductions are not among the itemized deductions in section 193; and yet defendant reduced plaintiffs gross sales according to the unidentified returns policy. Plaintiff sought the amount of the commission reductions for unidentified returns, exemplary damages, an injunction prohibiting defendant from making further deductions for unidentified returns, and attorney’s fees.

Defendant timely removed plaintiffs action to federal court pursuant to 28 U.S.C. § 1441, arguing that the District Court had original jurisdiction over the case based on section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185 (2000), which preempted plaintiffs state claims. The District Court denied plaintiffs motion to remand the action to state court for lack of subject matter jurisdiction. It found, inter alia, that plaintiffs section 193 claim necessarily involved interpretation of the CBA and therefore was preempted by section 301.

The parties both moved for summary judgment. The District Court granted defendant’s motion, finding that because plaintiffs claims were arbitrable, his failure to exhaust grievance and arbitration procedures required dismissal of his claims. See Vera v. Saks & Co., 218 F.Supp.2d 490, 494 (S.D.N.Y.2002). It then denied plaintiffs cross-motion for summary judgment, given its holding that plaintiffs claims first had to be raised in accordance with the grievance and arbitration provisions of the CBA. Id. at 495.

This appeal followed.

II. Analysis

A. Motion to Remand

A district court must remand a case to state court “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c) (2000). We review de novo a decision denying a motion to remand an action to state court on the basis of preemption. See Foy v. Pratt & Whitney Group, 127 F.3d 229, 232 (2d Cir. 1997).

A defendant may remove an action originally filed in state court to federal court if the case originally could have been filed in federal court. See 28 U.S.C. § 1441(a) (2000). Absent diversity of citizenship, a case may be filed in federal court in the first instance “when a federal question is presented on the face of the plaintiffs properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Pursuant to this rule, commonly referred to as the well-pleaded complaint rule, removal generally is not permitted simply because a defendant intends to defend the case on the basis of federal preemption. See Foy, 127 F.3d at 232.

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335 F.3d 109, 2003 WL 21545850, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vera-v-saks-co-ca2-2003.