Washington v. Union Carbide Corp.

870 F.2d 957, 1989 WL 26490

• Court: Court of Appeals for the Fourth Circuit
• Decided: March 27, 1989
• Docket: No. 88-3957
• Status: Published

Opinions

WILKINSON, Circuit Judge:

This case raises questions about the proper method of resolving claims that a state-law cause of action is preempted under § 301 of the Labor Management Relations Act. We hold that it lies within the discretion of a federal district court, in an appropriate case, to address the state claim on the merits before resolving the § 301 preemption inquiry.

Thomas E. Washington brought this action in federal district court after being fired from his position at Union Carbide’s facility in South Charleston, West Virginia. He alleged, inter alia, that Union Carbide violated the public policy of West Virginia by discharging him in retaliation for filing safety complaints with the company. The district court granted Union Carbide’s motion for summary judgment holding that Washington’s state-law claims were preempted by § 301 of the Labor Management Relations Act of 1947. The district court also found that Washington had failed to establish a violation of West Virginia public policy upon which to base a cause of action for retaliatory discharge. We agree that Washington failed to allege a valid cause of action for retaliatory discharge under West Virginia law and therefore find it unnecessary to address the question of § 301 preemption. We affirm the grant of summary judgment in favor of Union Carbide.

I.

Thomas E. Washington worked for Union Carbide from November 29, 1976 until his discharge on July 29, 1985. He was a member of the International Association of Machinists and Aerospace Workers, and its Local 598, which was the exclusive bargaining agent for all hourly employees at the Union Carbide facility. Union Carbide and Local 598 were parties to a collective bargaining agreement that prohibited termination of employees “without just cause” and established a comprehensive grievance and arbitration procedure for the resolution of disputes under the collective bargaining agreement. The collective bargaining agreement also contained provisions on employee health and safety. It encouraged employees to report unsafe working conditions to Union Carbide and to suggest ways in which safety could be improved.

Washington was discharged by Union Carbide on July 29, 1985. He was advised that his employment was being terminated because of his insubordinate behavior, his departures from the job site without supervisory approval, and his past citations for inadequate job performance. Washington filed a grievance pursuant to the collective bargaining agreement challenging his discharge. He claimed that Union Carbide fired him because he filed numerous safety complaints with the company. His grievance was rejected by Union Carbide and was heard by an arbitration panel on December 16, 1985. The panel denied Washington’s grievance on March 3, 1986, finding that he was discharged with just cause.

On February 5, 1987, Washington brought suit against Union Carbide, the International Association of Machinists and Aerospace Workers, and its Local 598. He claimed, as a matter of federal law, that Union Carbide breached its contractual duty not to terminate his employment without just cause, that his termination violated Title VII of the Civil Rights Act of 1964, that the Union breached its duty to fairly represent him, that the arbitration decision was erroneous as a matter of law and procedure. He also claimed that Union Carbide violated federal and West Virginia public policy by discharging him in retaliation for filing numerous safety complaints with the company. Union Carbide replied in part that Washington’s state claims were preempted by federal law.

On November 10, 1987, the district court dismissed Washington’s claims that Union Carbide breached the collective bargaining agreement and violated Title VII of the Civil Rights Act of 1964. The district court also dismissed Washington’s claims against the Union.

On February 1, 1988, the district court granted summary judgment in favor of Union Carbide. It did so for two reasons. It held, as an initial matter, that Washington’s alleged cause of action in tort for retaliatory discharge was actually a suit against Union Carbide for breach of the collective bargaining agreement. As such, Washington’s state-law claims were preempted by § 301 of the Labor Management Relations Act of 1947. The district court found, in the alternative, that there was no right of action premised on West Virginia public policy protecting Washington from discharge for filing safety complaints. Washington appeals from the grant of summary judgment in favor of Union Carbide.

II.

Section 301 of the Labor Management Relations Act of 1947 (LMRA) provides in pertinent part that:

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 parties ....

29 U.S.C. § 185(a). Section 301 was enacted with the understanding that federal labor law doctrines would uniformly prevail over inconsistent state law, Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-04, 82 S.Ct. 571, 576-77, 7 L.Ed.2d 593 (1962), and authorizes courts to fashion a body of federal law for the enforcement of collective bargaining agreements. Textile Workers v. Lincoln Mills, 353 U.S. 448, 451, 77 S.Ct. 912, 915, 1 L.Ed.2d 972 (1957). The application of state law is therefore preempted in favor of federal labor law if resolution of a state-law claim requires interpretation of a collective bargaining agreement. Lingle v. Norge Div. of Magic Chef, Inc., — U.S. -, 108 S.Ct. 1877, 1885, 100 L.Ed.2d 410 (1988); Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985).

In order to determine the preemptive effect of § 301, however, a court must first examine the elements of the purported state-law remedy. See, e.g., Lingle, 108 S.Ct. at 1881-83 (Illinois tort of retaliatory discharge for filing a workers’ compensation claim); International Brotherhood of Electrical Workers v. Hechler, 481 U.S. 851, 107 S.Ct. 2161, 2167-68, 95 L.Ed.2d 791 (1987) (Florida action for tortious breach-of-contract); Allis-Chalmers, 471 U.S. at 216-19, 105 S.Ct. at 1914-15 (Wisconsin tort for the bad-faith handling of an insurance claim). A colorable state-law cause of action is a predicate to a § 301 preemption claim.

As discussed above, the district court’s dismissal of Washington’s federal claims against Union Carbide left only Washington’s state-law claim for retaliatory discharge to be resolved. The district court did not err, however, in addressing whether Washington had stated a valid cause of action under state law. State claims which are wholly preempted by § 301 constitute a well-recognized exception to the general rule that a federal claim must be stated on the face of the complaint. If Washington’s purported state-law remedy had been completely preempted by § 301, “any claim purportedly based on that preempted state law is considered, from its inception, a federal claim....” Caterpillar Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987). The district court therefore had jurisdiction to address Washington’s alleged state cause of action either as a pendent state claim here or, in a removed § 301 case, as a means of determining its own jurisdiction. United States v. United Mine Workers of America, 330 U.S. 258, 292 n. 57, 67 S.Ct. 677, 695 n. 57, 91 L.Ed. 884 (1947).

III.

We think it important to differentiate our analysis from that of the dissenting opinion. Under its alternative approach, federal courts generally must assume the validity of the purported state-law claim no matter how insubstantial, and must always proceed to the preemption inquiry no matter how uncertain. We reject this position. The dissenting opinion’s approach is far less flexible than that of United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), and leads to extended litigation in cases where the underlying state claims are meritless.

We favor instead an approach to § 301 preemption cases that will leave district courts discretion to address either the underlying state claim or the § 301 preemption inquiry as an initial matter. In some cases this discretionary approach will follow the thoughtful analysis found in the dissenting opinion. There may well be instances where a district court will wish to assume the validity of the purported state-law claim and proceed directly to the preemption inquiry. See United Ass’n of Journeymen & Apprentices of the Plumbing & Pipe Fitting Industry, Local No. 57 v. Bechtel Power Corp., 834 F.2d 884, 889 (10th Cir.1987). If the alleged state cause of action is preempted, the court may then address the § 301 claim on its merits. If not preempted, the federal court may either dismiss the alleged state-law claim without prejudice or resolve it on its merits under the guidance of Gibbs. We do not dispute the validity of this approach. We do, however, take issue with the dissent’s intimation that its analysis must be followed in all circumstances.

In our view, it lies within the discretion of the district court to dismiss state claims on their merits before resolving the preemption inquiry. Several factors ought to inform the discretion of the federal district courts under this analysis. Among them are whether the plaintiff has clearly failed to state a claim which is cognizable under state law; whether the purported state-law claim can be resolved without the need for much discovery or factual development; whether the complexity of the preemption inquiry would leave uncertain on appeal the existence of a federal question under Caterpillar, 107 S.Ct. at 2425; and whether the case originated in or was removed to federal court and the extent to which its resolution will require the parties to shuttle between the federal and state systems.

A discretionary approach to the § 301 preemption inquiry has several advantages. First, it grants district courts the latitude to resolve a case promptly where the insub-stantiality of the state claim is apparent. In this appeal, for example, we have the benefit of the district court’s ruling that appellant’s claim is insubstantial based on a careful exposition of West Virginia law. Second, the discretionary approach may spare the parties the burden of litigating a preemption issue where there is, in fact, no state claim to be preempted and where the underlying cause of action is patently without merit. Third, this approach provides the opportunity to have the case adjudicated in a single forum. Under the dissent’s approach, this case would have to be decided by two courts rather than one despite the absence of any viable state cause of action. In a removed case, the litigants may be required to travel from state to federal court and back again to state court regardless of how frivolous the state claim may be.

We do not discount the desirability of having state courts resolve questions of state law which are genuinely unsettled or which hinge upon disputed facts. In such cases, a federal district court should resolve the § 301 preemption inquiry at the outset of the litigation. Pendent jurisdiction is, however, a doctrine of discretion; Gibbs has never required that every pendent state claim be resolved on the merits by a state court. See Rosado v. Wyman, 397 U.S. 397, 402-05, 90 S.Ct. 1207, 1212-14, 25 L.Ed.2d 442 (1970). Many courts of appeals, for example, have upheld a district court’s resolution of state-law claims even after all federal claims have been dismissed from the action. See Province v. Cleveland Press Pub. Co., 787 F.2d 1047, 1054-55 (6th Cir.1986); Union Nat. Bank of Little Rock v. Farmers Bank, 786 F.2d 881, 884 n. 2 (8th Cir.1986); New York v. Shore Realty Corp., 759 F.2d 1032, 1037 (2d Cir.1985); Ingram Corp. v. J. Ray McDermott & Co., 698 F.2d 1295, 1317-20 (5th Cir.1983); Meyer v. California and Hawaiian Sugar Co., 662 F.2d 637, 640 (9th Cir.1981); Lentino v. Fringe Employee Plans, Inc., 611 F.2d 474, 479-80 (3d Cir.1979); Transok Pipeline Co. v. Darks, 565 F.2d 1150, 1155 (10th Cir.1977); Galella v. Onassis, 487 F.2d 986, 996 (2d Cir.1973); Brunswick v. Regent, 463 F.2d 1205, 1206-07 (5th Cir.1972); Gray v. International Ass’n of Heat & Frost Insulators & Asbestos Workers, Local No. 51, 447 F.2d 1118, 1120 (6th Cir.1971).

In Gibbs, and in many of the above-mentioned cases, the federal question was resolved before the state claims were addressed. As we have noted, this is within the discretion of the district court. The substantiality of the federal question itself, however, not its place in the order of analysis, is what gives federal courts the power to resolve pendent state claims. Whether found in an original or removed case, the § 301 inquiry presents a substantial federal question implicating important federal policies. See Caterpillar, 107 S.Ct. at 2425. Whether one addresses state claims on the merits before or after the preemption inquiry is therefore not dispositive under Gibbs. It is clear that a federal court may resolve a state-law claim “even if resolution of the state-law issues obviates the need to address the federal issues.” Hillery v. Rushen, 720 F.2d 1132, 1140 (9th Cir.1983), citing Siler v. Louisville & Nashville R.R. Co., 213 U.S. 175, 191, 29 S.Ct. 451, 454, 53 L.Ed. 753 (1909). Considerations of judicial economy and fairness emphasized in the Gibbs decision suggest that a case should be resolved sooner rather than later, and that additional analytical steps need not be taken to reach an outcome that would, in any event, be clear.

As the Supreme Court has recognized, state-law claims which may be preempted by federal law are particularly well-suited for resolution in federal court. See Gibbs, 383 U.S. at 727, 86 S.Ct. at 1139. See also North Dakota v. Merchants Nat. Bank & Trust Co., 634 F.2d 368, 371 (8th Cir.1980). In such cases, the purported state-law claim is “so closely tied to questions of federal policy” that the argument for the exercise of pendent jurisdiction is a strong one. Gibbs, 383 U.S. at 727, 86 S.Ct. at 1139 (while the interrelationship of state and federal claims in preemption cases does not create federal question jurisdiction, “its existence is relevant to the exercise of discretion”). See also L.A. Draper & Son v. Wheelabrator-Frye, Inc., 735 F.2d 414, 428 (11th Cir.1984); Jackson v. Stinchcomb, 635 F.2d 462, 473 (5th Cir.1981). In Gibbs, as in this case, the federal claim was apparent from the face of the complaint. In a removed case, however, the federal claim may not have been stated on the face of the complaint. As indicated earlier, however, we believe that a federal court would have the power to address the merits of the state claim in order to determine its own jurisdiction under Caterpillar, 107 S.Ct. at 2425.

A district court, for instance, may logically wish to examine the elements of a state cause of action in order to resolve more precisely the preemption question. See Lingle, 108 S.Ct. at 1881-83. The Supreme Court took exactly this approach in construing the ERISA preemption provision, 29 U.S.C. § 1144, and its statutory exceptions in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 1554, 95 L.Ed.2d 39 (1987). A state tort, for example, may include an element of “bad faith” which is defined in state law by reference to a preexisting contractual duty. If the source of the duty is a collective bargaining agreement, the state tort is preempted by § 301. Cf. Allis-Chalmers, 471 U.S. at 216-19, 105 S.Ct. at 1914-15 (scope of state tort derives from rights and obligations established by a collective bargaining agreement and therefore is preempted by § 301 of the LMRA). The outcome of the preemption inquiry in such a case therefore depends on a careful examination of the elements of the purported state-law claims.

If the district court finds no viable state cause of action in the course of its preemption inquiry, judicial economy also counsels in favor of a dismissal of the state claim with prejudice. See Gibbs, 383 U.S. at 726, 86 S.Ct. at 1139 (justification for the exercise of pendent jurisdiction “lies in considerations of judicial economy, convenience and fairness to litigants”). At that point in the inquiry, the district court has expended judicial resources, has gained an understanding of the applicable state law, and should have at least the discretion, under the guidance of the above-mentioned factors, to dismiss the state-law claim with prejudice.

In the instant case, our approach imposes no inconvenience or unfairness on appellant; he originally brought suit in federal district court and it was there that the litigation was resolved. While there is certainly a comity interest at stake in § 301 preemption cases, there also is an interest in seeing the judicial system, whether it be federal or state, best serve the litigants through a fair and prompt disposition of their claims. See Fed.R.Civ.P. 1. An approach that preserves the flexibility of Gibbs and the discretionary powers of district courts is preferable to one that dictates an initial preemption analysis even where it is perfectly clear that there is nothing to be preempted. Because the dissenting opinion would so often bring unnecessary steps into § 301 analysis and additional courts into the resolution of § 301 cases, we respectfully reject its position as litigious.

IY.

We must still address the application of the discretionary approach in this case. The district court, the panel majority, and the dissenting opinion all agree that appellant’s purported state-law claim has not been recognized in West Virginia. The dissenting opinion characterizes plaintiffs claim as “novel” and concedes that it “has not been specifically recognized in state law.” The dissent then asserts, however, that it is beyond the discretion of a federal district court to dismiss the state-law claim with prejudice. Under this view, every cause of action in tort, no matter how speculative, presents an unsettled question on the frontier of state law which must be presented to state courts for resolution. We disagree. A state claim which has not been recognized by state courts may well be a settled question of state law. Federal courts are permitted under Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and Gibbs, 383 U.S. at 715, 86 S.Ct. at 1130, to rule upon state law as it presently exists and not to surmise or suggest its expansion.

We agree with the district court that appellant’s purported state-law claim is clearly one that West Virginia has not recognized. Washington failed to state a valid cause of action for retaliatory discharge under West Virginia law; the invalidity of his alleged state claim can readily be determined on the face of the pleadings.

More specifically, a discharged employee in West Virginia has a cause of action in tort against his employer if his discharge contravenes a “substantial public policy” principle. Harless v. First Nat’l Bank in Fairmont, 162 W.Va. 116, 246 S.E.2d 270 (1978). As the district court recognized, however, the West Virginia courts have proceeded with “great caution” in applying public policy to wrongful discharge actions. The power to declare an employer’s conduct as contrary to public policy is to be exercised with restraint, Yoho v. Triangle PWC, Inc., 336 S.E.2d 204, 209 (W.Va.1985), and with due deference to the West Virginia legislature as the primary organ of public policy in the state. See generally Collins v. AAA Homebuilders, Inc., 333 S.E.2d 792, 793 (W.Va.1985) (the West Virginia legislature “has the primary responsibility for translating public policy into law”).

Prior cases in this area underscore the need for retaliatory discharge actions to rest upon a statutory articulation of public policy by the West Virginia legislature. See, e.g., Harless, 162 W.Va. 116, 246 S.E.2d at 275-76 (right of action for retaliatory discharge based upon the West Virginia Consumer Credit and Protection Act, W.Va.Code § 46A-1-101, et seq.); Collins v. Elkay Mining Co., 371 S.E.2d 46, 47-49 (W.Va.1988), (right of action for retaliatory discharge recognized in favor of a mine employee who refused to violate the West Virginia Mine Safety Act, W.Va.Code § 22A-1A-20); Shanholtz v. Monongahela Power Co., 165 W.Va. 305, 270 S.E.2d 178 (1980) (right of action for retaliatory discharge recognized in favor of an “at will” employee who was fired for filing a claim pursuant to the West Virginia Workers’ Compensation Act, W.Va.Code § 23-5-1); Cordle v. General Hugh Mercer Corp., 325 S.E.2d 111 (W.Va.1984) (right of action for retaliatory discharge based, in part, on W.Va Code § 21-5-5b, which significantly restricts the use of polygraph testing by an employer in West Virginia); McClung v. Marion County Comm’n, 360 S.E.2d 221 (W.Va.1987) (right of action for retaliatory discharge recognized in favor of a county employee who was discharged for filing a state court action for overtime wages pursuant to W.Va.Code § 21-5G-8). While the sources of public policy discussed in the above cases were not confined to the relevant statutes, see Cordle, 325 S.E.2d at 114, it is clear that the presence of these statutes was the critical factor in identifying the state’s public policy. By contrast, in the absence of a statute, the West Virginia Supreme Court of Appeals held that a collective bargaining provision which terminated the seniority of an injured employee was not contrary to the state’s public policy. Yoho, 336 S.E.2d at 209-10. There is no instance in which the West Virginia Supreme Court of Appeals has recognized a retaliatory discharge action of any sort in the absence of legislative recognition that such discharge contravenes the public policy of the state.

The above examples serve to illustrate the weakness of Washington’s claim. Washington fails to identify, for example, the source of the public policy which supports his alleged state claim for retaliatory discharge. Although he asserts that such a public policy is “universally understood,” he refers to no West Virginia statute or case generally recognizing a “public policy” in favor of private sector employees who file safety complaints with their employers or conferring upon them any private right of action.

Washington argued to the district court that the antidiscrimination provision of the West Virginia Occupational Safety and Health Act, W.Va.Code § 21-3A-13, evidenced a public policy in favor of employees who file grievances or safety complaints. Significantly, however, the statute applies only to “public employers,” which are defined as the “state or any department, division, bureau, board, council, agency or authority of the state.” W.Va. Code § 21-3A-2(d). Moreover, a public employee’s sole means of redress under the statute is to file an administrative complaint within thirty days of the alleged violation of the Act. W.Va.Code § 21-3A-13(b). Any investigation and subsequent court enforcement of the Act’s provisions must be commenced by the state labor commissioner. Id. While Washington’s right to report safety violations was protected by the collective bargaining agreement, we agree with the district court that Washington could not state a valid cause of action based on the West Virginia Occupational Safety and Health Act, W.Va. Code § 21-3A-13.

Whether protection for Washington should exist in tort is, of course, debatable. A tort action for retaliatory discharge involves a delicate balance between an employer’s interest in promptly terminating unsatisfactory employees and an employee’s interest in not being discharged without justification. Employers subject to retaliatory discharge actions may be reluctant to release employees for legitimate business reasons; employees without the protection of such actions may be equally reluctant to blow a salutary whistle. That debate is at the core of state law. When an issue of public policy is “fairly debatable or controversial in nature,” the West Virginia courts will defer to the judgment of the West Virginia legislature, Yoho, 336 S.E.2d at 209. As the district court found, it is clear that statutory recognition of an action for retaliatory discharge for reporting safety violations has not been generally conferred in West Virginia.

V.

In the absence of a state cause of action, it is, of course, unnecessary to inquire whether § 301 of the LMRA would apply to preempt the state-law claim. Based on the foregoing principles, the district court’s grant of summary judgment for defendant is

AFFIRMED.