Stomping on the iron feet of oppression

Defeating the Federal Railway Labor Act and Labor Management Relations Act § 301 preemption defense in state-law employment cases

2023 March

In the decades following the Civil War, the American Industrial Revolution brought great wealth to magnates in oil, steel, railroad, mining, and other industries – richness that lasted for generations of Rockefellers, Carnegies, Vanderbilts, and others.

But the rising tide of industrialization did not lift all boats. Dangerous working conditions, long hours, and low wages resulted in labor unrest and often violent clashes between labor and management. Workers wanted to organize; management wanted to keep private industry private.

To quell the labor strife and keep the economy producing, Congress passed the Railway Labor Act, 45 U.S.C. §§ 151-65, 181-88 (“RLA”) in 1926 and the National Labor Relations Act, 29 U.S.C. §§ 151-69 in 1935. The Labor Management Relations Act (“LMRA”) arose from the controversial Taft-Hartley Act amendment to the NLRA in 1947.

While the overt violence and government militant intervention largely came to an end, anti-union sentiment among corporations has persisted. Many corporate employers and their counsel will not hesitate to try to use these federal laws to deprive unionized and/or organizing workers of the constitutional right to a jury trial by arguing federal preemption of state-law claims.

The RLA and LMRA § 301 preemption standards are “virtually identical” in purpose and function, and, for the most part, analyzed under a single test and cohesive body of caselaw. (Hawaiian Airlines, Inc. v. Norris (1994) 512 U.S. 246, 260, 262-63 (“Norris”).) Note, however, in the Ninth Circuit, LMRA § 301 preemption gives rise to federal court jurisdiction under the “complete preemption” doctrine. (Caterpillar Inc. v. Williams (1987) 482 U.S. 386, 393-94; Moore-Thomas v. Alaska Airlines, Inc. (9th Cir. 2009) 553 F.3d 1241, 1244.) An exploration of this difference is beyond the scope of this article. This article begins with an overview of the federal labor policy behind the preemption standards, then provides authorities to help you defeat common defense preemption arguments in state law-based employment cases.

The federal labor policy: to promote industrial peace

In passing the RLA and LMRA, Congress intended to promote industrial peace by providing a “comprehensive” scheme for resolving labor disputes “through negotiation rather than industrial strife.” (See Norris, supra, 512 U.S. at 252.)

To that end, the collective bargaining agreement (“CBA”) is an essential component of federal labor policy. The CBA is more than a mere contract; it is “an effort to erect a system of industrial self-government.” (United Steelworkers v. Warrior & Gulf Navigation Co. (1960) 363 U.S. 574, 580 (“Steelworkers II”).) The CBA regulates this system of self-government by setting forth “a generalized code to govern . . . the whole employment relationship,” with the understanding that not all situations can be anticipated. (Id., at 578-59.)

To “diminish the risk of interruptions in commerce” (Conrail v. Railway Labor Executives’ Ass’n (1989) 491 U.S. 299, 311 (“Conrail”)), this self-governance system includes a mechanism for the grievance and arbitration of disputes. This process purports to provide a more “prompt and orderly settlement” of disputes than that available in the ordinary judicial course. (Alaska Airlines, Inc. v. Schurke (9th Cir. 2018) 898 F.3d 904, 919 (“Schurke”), quoting 45 U.S.C. § 151a.)

Generally, “major” disputes are those seeking to create contractual CBA rights, while “minor” disputes seek to enforce existing rights under the CBA. (Conrail, supra, 491 U.S. at 302.) Typically, “minor” disputes are generically referred to as “grievances.” (Norris, supra, 512 U.S. at 255.)

Federal labor policy accords such weight to this workplace self-governance scheme that the CBA can create a common law particular to an industry or even a plant. In resolving CBA disputes, this common law may take into account ad hoc considerations, such as “the effect upon productivity of a particular result, its consequence to the morale of the shop, . . . whether tensions will be heightened or diminished.” (Steelworkers II, supra, 363 U.S. at 582.)

Thus, resolving disputes through the CBA grievance and arbitration process is an integral part of the “continuous collective bargaining process.” (United Steelworkers of America v. Enter. Wheel & Car Corp. (1960) 363 U.S. 593, 596 (“Steelworkers III”).)

RLA/LMRA preemption policy considerations

Congress did not expressly preempt state-law claims in either the RLA or the LMRA – neither statute contains express preemption language. (See Air Transp. Ass’n of America v. City & County of San Francisco (9th Cir. 2001) 266 F.3d 1064, 1076.) Rather, to effectuate Congressional intent, the U.S. Supreme Court found federal preemption is implied. (Allis- Chalmers Corp. v. Lueck (1985) 471 U.S. 202, 208-11 (“Lueck”).)

Federal preemption “ensures that CBA disputes are governed by a uniform set of principles informed by federal labor law and the industrial common law applicable to the agreement, rather than conflicting substantive interpretation under competing [state] legal systems.” (Schurke, supra, 898 F.3d at 919 [internal citations and quotations omitted].) Applying state law to CBA disputes “might lead to inconsistent results since there could be as many state-law principles as there are States.” (Lingle v. Norge Div. of Magic Chef, Inc. (1988) 486 U.S. 399, 406 (“Lingle”).) Thus, to protect federal labor policy, claims arising under the CBA must be brought under the RLA/LMRA grievance and arbitration systems. (See Air Transp. Ass’n of America, supra, 266 F.3d at 1076 [citing California v. Taylor (1957) 353 U.S. 553, 559-661].)

However, “[t]he Supreme Court has repeatedly instructed that [RLA and LMRA § 301] preemption extends only as far as necessary to protect the role of labor arbitration in resolving CBA disputes.” (Schurke, supra, 898 F.3d at 913-14 [citations omitted].) In fact, “the RLA does not provide for, nor does it manifest any interest in, national or systemwide uniformity in substantive labor rights.” (Id., at 919.)

Rather, Congressional intent extends to “reduc[ing] commercial disruption by ‘facilitat[ing] collective bargaining and . . . achiev[ing] industrial peace,’” not federalizing labor and employment law so as to preempt states’ rights. (Ibid. [quoting Internt’l Brotherhood of Elec. Workers v. Foust (1979) 442 U.S. 42, 47].) For workers covered under the RLA or LMRA, then, “it would be inconsistent with congressional intent . . . to preempt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.” (Lueck, supra, 471 U.S. at 212.) Thus, “[p]re-emption of employment standards within the traditional police power of the State should not be lightly inferred.” (Norris, supra, 512 U.S. at 252 [internal quotation marks and citations omitted].)

The development of federal common law preemption standards

In Textile Workers Union Am. v. Lincoln Mills of Ala. (1957) 353 U.S. 448, 450-51, 456 (“Lincoln Mills”), the U.S. Supreme Court construed LMRA § 301 to give the federal courts not only jurisdiction over these lawsuits, but also authorization to create a body of federal common law to specifically enforce the agreement to arbitrate disputes under a CBA. (Ibid.)

After further developing the federal common law in a string of jurisdictional and policy-related decisions, the U.S. Supreme Court issued the structural foundation of the modern preemption test in Allis-Chalmers Corp. v. Lueck (1985) 471 U.S. 202.

In Lueck, the Supreme Court expanded the preemptive reach of LMRA § 301. Lueck focused the preemption analysis on whether “resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract . . . .” (Id., at 220.) Stated differently, section 301 preemption determines if state law confers independent, nonnegotiable rights on the party, or, “whether evaluation of the [ ] claim is inextricably intertwined with consideration of the terms of the labor contract.” (Id., at 216.)

The two-part modern Burnside test

The modern test of LMRA § 301 preemption expressed in Burnside v. Kiewit Pac. Corp. (9th Cir. 2007) 491 F.3d 1053 encompasses the major developments in the federal common law. The two-part Burnside test first looks at the legal character of the claim at issue – whether the cause of action involves rights conferred by virtue of state law, or is instead grounded in the CBA. Burnside next determines if an independent claim is nonetheless “substantially dependent” on the terms of the CBA. (Id., at 1058; see also, Dent v. NFL (9th Cir. 2018) 902 F.3d 1109, 1116.) The defendant bears the burden of proof on the defense of preemption. (Jimeno v. Mobil Oil Corp. (9th Cir. 1995) 66 F.3d 1514, 1526 n.6 [citing United States v. Skinna (9th Cir. 1991) 931 F.2d 530, 533].)

Step 1: The legal character of the plaintiff’s claim at issue

To answer this first question, the court focuses on “the legal character of a claim, as ‘independent’ of rights under the collective-bargaining agreement . . . and not whether a grievance arising from ‘precisely the same set of facts’ could be pursued . . . .” (Livadas v. Bradshaw (1994) 512 U.S. 107, 123-24 [citations omitted].) Preemption is warranted only if the claim is “founded directly on rights created by” the CBA. (Caterpillar, Inc. v. Williams (1987) 482 U.S. 386, 394.)

[C]laims are not simply CBA disputes by another name, and so are not preempted under this first step, if they just refer to a CBA-defined right, Livadas, 512 U.S. at 125; rely in part on a CBA’s terms of employment, Lueck, 471 U.S. at 211; run parallel to a CBA violation, Lingle, 486 U.S. at 408-10; or invite use of the CBA as a defense, Caterpillar Inc. v. Williams, 482 U.S. 386, 398 (1987).

(Schurke, supra, 898 F.3d at 921.)

This last point bears repeating: “pre-emption is not mandated simply because the defendant refers to the CBA in mounting a defense.” (Cramer v. Consol. Freightways, Inc. (9th Cir. 2001) 255 F.3d 683, 691 [citing Caterpillar, supra, 482 U.S. at 398-99]; see also, Matson v. UPS (9th Cir. 2016) 840 F.3d 1126, 1134-35 [accord]; Burnside, supra, 491 F.3d at 1060 [accord]; Humble v. Boeing Co. (9th Cir. 2002) 305 F.3d 1004, 1008 [accord under the recent Cramer, supra, framework]; Sprewell v. Golden State Warriors (9th Cir. 2001) 266 F.3d 979, 991 [accord]; Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 641 [accord; “just cause” defense does not require interpreting CBA].)

In fact, the law has long been settled that “a case may not be removed to federal court on the basis of a federal defense, including a defense of preemption, even if the defense is anticipated in the plaintiff’s complaint, and even if both parties concede that the federal defense is the only question truly at issue.” (Balcorta v. Twentieth Century-Fox Film Corp. (9th Cir. 2000) 208 F.3d 1102, 1106 [quoting Franchise Tax Bd. v. Constr. Laborers Vacation Trust (1983) 463 U.S. 1, 14; superseded by statute on other grounds].)

The rule excluding claims from RLA/LMRA preemption despite a CBA-based defense arises from the primacy of the plaintiff’s claim, the “touchstone” of the analysis. (Cramer, supra, 255 F.3d at 691.) Looking only to the plaintiff’s claim preserves the “well-pleaded complaint” rule, which makes the plaintiff “the master of the claim.” (Vasserman v. Henry Mayo Newhall Mem. Hosp. (C.D. Cal. 2014) 65 F.Supp.3d 392, 950.) But beware: The “well-pleaded complaint” rule is subject to the “artful pleading” doctrine exception. (Ibid.) Thus, be mindful when drafting your complaint, so you do not inadvertently expose the claim to a federal preemption defense.

Step 2: Whether an independent claim is “substantially dependent” on the CBA

Even if the rights asserted are independent of the CBA, the action may still be preempted. The second step of the Burnside test requires determining “whether a state law right is ‘substantially dependent’ on the terms of a CBA.” (Burnside, supra, 491 F.3d at 1060 [quoting Caterpillar, supra, 482 U.S. at 394 and Livadas, supra, 512 U.S. at 125].) A claim is ‘substantially dependent’ if resolution of the claim requires “interpreting,” as opposed to merely “looking to” the CBA. (Burnside, supra, 491 F.3d at 1060.)

“‘Substantial dependence’ on a CBA is an inexact concept, turning on the specific facts of each case, and the distinction between ‘looking to’ a CBA and ‘interpreting’ it is not always clear or amenable to a brightline test.” (Cramer, supra, 255 F.3d at 691.) In the context of section 301 complete preemption, “‘interpret’ is defined narrowly – it means something more than ‘consider,’ ‘refer to,’ or ‘apply.’” (Balcorta, supra, 208 F.3d at 1108.) The narrow construction of “interpret” with regard to one or more terms of a CBA is “[d]ue in part to the presumption against federal preemption.” (Choate v. Celite Corp. (2013) 215 Cal.App.4th 1460, 1469 [citing Fort Halifax Packing Co. v. Coyne (1987) 482 U.S. 1, 21; emphasis added].)

“Interpret” is often defined by what it does not include. “[T]he bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished.” (Livadas, supra, 512 U.S. at 124.) Nor will “some amount of fact-finding” suffice to preempt an independent claim: “the need for a ‘purely factual inquiry . . . [that] does not turn on the meaning of any provision of a collective-bargaining agreement . . . is not cause for preemption under section 301.” (Burnside, supra, 491 F.3d at 1072 [internal quotations and citations omitted].) “[N]either looking to the CBA merely to discern that none of its terms is reasonably in dispute, nor the simple need to refer to bargained-for wage rates in computing a penalty, is enough to warrant preemption.” (Burnside, supra, 491 F.3d at 1060 [internal quotations and citations omitted]; see also, Cramer, supra, 255 F.3d at 695 [no preemption based on consulting the CBA to reveal the absence of a provision].)

Nor does a “potentially relevant” CBA provision trigger preemption. Humble, supra, 305 F.3d at 1010.

[A]lleging a hypothetical connection between the claim and the terms of the CBA is not enough to preempt the claim: adjudication of the claim [under Section 301] must require interpretation of a provision of the CBA. A creative linkage between the subject matter of the claim and the wording of a CBA provision is insufficient . . . .

(Cramer, supra, 255 F.3d at 691; see also, Id., at 693 [“the mere possibility that the subject matter of the claim was a proper subject of the collective bargaining process, whether or not specifically discussed in the CBA,” is not sufficient to preempt the claim].) Thus, even the possibility that interpreting the CBA might be required in the future (for example, to compute damages), is not enough to warrant preemption at the outset. (Burnside, supra, 491 F.3d at 1072-73, 1074 n. 19.)

Moreover, CBA matters peripheral to a state cause of action need not trigger preemption. In Matson, supra, the plaintiff asserted, among others, a gender-based hostile work environment against her employer, (UPS. Id., at 1128.) Differential treatment in assigning “extra work” – the ability to work overtime or make additional deliveries for additional pay – was among the many pieces of evidence she offered to prove a hostile work environment. (Id., at 1128-29.) Although the applicable CBA recognized seniority principles as the “prime consideration for extra work” as well as “in the everyday operation of the business,” Matson claimed men less senior to her were favored in “extra work” assignments. (Ibid.)

The Ninth Circuit overturned the trial court’s finding that “extra work” required interpreting the CBA. (Id., at 1134.) Further, even assuming the right to seniority required interpreting the CBA, the federal appeals court found Matson’s hostile work environment claim was not preempted. (Ibid.)

Matson rejected UPS’s assertion that Matson’s claim was simply a “repackaged ‘contractual dispute’ over the assignment of extra work.” (Id., at 1133.) The other elements Matson identified as contributing to the hostile work environment, including intimidation and derision, were unrelated to work assignments. (Ibid.)

The circuit court further determined “Matson could have a viable hostile environment claim whether or not the CBA actually requires assignment of that work based on seniority.” (Id., at 1134 [emphasis in original].) Correctly interpreting the CBA with regard to “extra work” or “seniority” was “purely peripheral to the relevant question . . . whether UPS showed systematic favoritism toward men in making its work assignments, thereby contributing to a hostile work environment for Matson and other women.” (Ibid.) The issue was not whether Matson indeed had seniority in “extra work” assignments; rather, consistently assigning the work to men over equally or more eligible women was evidence of the gender-based hostile work environment Matson claimed. (Id., at 1136.) Thus, CBA matters “peripheral” to state-law claims mean such claims are not “substantially dependent” upon the CBA.

Thus, RLA/LMRA § 301 preemption protects “the primacy of grievance and arbitration as the forum for resolving CBA disputes and the substantive supremacy of federal law within that forum, nothing more.” (Schurke, supra, 898 F.3d at 920 [citing Norris, supra, 512 U.S. at 262-63; emphasis added); see also Schurke, supra, 898 F.3d at 923 [LMRA § 301 preemption is a kind of “forum” protection].)

Nonnegotiable employment rights claims grounded in state law are generally outside the scope of RLA/LMRA § 301 preemption

For more than 30 years, the United States Supreme Court has upheld an employee’s right to pursue her state law claims in court. In the seminal case of Lingle v. Norge Div. of Magic Chef (1988) 486 U.S. 399, our nation’s highest court found “an employee covered by a collective-bargaining agreement that provides her with a contractual remedy for discharge without just cause may enforce her state-law remedy for retaliatory discharge.” (Id., at 401.)

The petitioner, Ms. Lingle, sought workers’ compensation benefits after being injured at work on December 5, 1984. (Id., at 401.) Six days later, her employer discharged her, allegedly for filing a false workers’ compensation claim. (Ibid.)

The union promptly filed a grievance on Ms. Lingle’s behalf pursuant to the applicable CBA, which protected the covered employees from discharge except for “proper” or “just” cause. (Ibid.) The CBA defined “grievance” broadly, as “any dispute between . . . the Employer and any employee, concerning the effect interpretation, application, claim of breach or violation of this Agreement.” (Id., at 401-02.)

An arbitrator ultimately found for Ms. Lingle and ordered her reinstated with backpay. (Id., at 402.) On July 9, 1985, Ms. Lingle filed suit under Illinois state law, alleging retaliatory discharge for exercising her rights under the state’s workers’ compensation laws. (Ibid.)

In holding that LMRA § 301 preemption did not apply to her state law claim, the U.S. Supreme Court first determined what elements Ms. Lingle would have to prove to prevail in state court:

To show retaliatory discharge, the plaintiff must set forth sufficient facts from which it can be inferred that (1) he was discharged or threatened with discharge and (2) the employer’s motive in discharging or threatening to discharge him was to deter him from exercising his rights under the Act or to interfere with his exercise of those rights.

(Id., at 407.)

The Lingle court concluded:

Each of these purely factual questions pertains to the conduct of the employee and the conduct and motivation of the employer. Neither of the elements requires a court to interpret any term of a collective-bargaining agreement. To defend against a retaliatory discharge claim, an employer must show that it had a nonretaliatory reason for the discharge; this purely factual inquiry likewise does not turn on the meaning of any provision of a collective-bargaining agreement.

(Ibid. [emphasis added].)

In deciding the state law remedy was independent of the CBA, the Supreme Court concluded:

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.

(Id., at 409-10 [emphasis added].)

The Court reinforced the independence of state law claims, referring specifically to state antidiscrimination laws:

the mere fact that a broad contractual protection against discriminatory – or retaliatory – discharge may provide a remedy for conduct that co-incidentally violates state law does not make the existence or the contours of the state-law violation dependent upon the terms of the private contract. . . . In the typical case a state tribunal could resolve either a discriminatory or retaliatory discharge claim without interpreting the ‘just cause’ language of a collective-bargaining agreement.

(Id., at 412-13.)

The Supreme Court further noted the Court’s history of recognizing substantive labor rights without interpreting a CBA:

This Court has, on numerous occasions, declined to hold that individual employees are, because of the availability of arbitration, barred from bringing claims under federal statutes. . . . [N]otwithstanding the strong policies encouraging arbitration, different considerations apply where the employee’s claim is based on rights arising out of a statute designed to provide minimum substantive guarantees to individual workers.

(Id., at 411, 412 (internal citations and quotations omitted) (emphasis in original).)

Six years after Lingle, supra, the United States Supreme Court reaffirmed its commitment to the independence of nonnegotiable state claims in Norris, supra. Adopting the Lingle standard to resolve issues of Railway Labor Act preemption, the Supreme Court emphasized,

Wholly apart from any provision of the CBA, petitioners had a state-law obligation not to fire respondent in violation of public policy or in retaliation for whistle-blowing. The parties’ obligation under the RLA to arbitrate disputes arising out of the application or interpretation of the CBA did not relieve petitioners of this duty.

(Norris, supra, 512 U.S. at 258, 262.)

The cases following these United States Supreme Court precedents are of course too numerous to identify fully. A select few from the Ninth Circuit and California, in ascending chronological order, are: Jimeno v. Mobil Oil Corp. (9th Cir. 1995), supra, 66 F.3d 1514, 1522 (FEHA disability discrimination claim not preempted by Section 301); Espinal v. Northwest Airlines (9th Cir. 1996) 90 F.3d 1452, 1454 (FEHA disability discrimination claim not preempted by RLA); Soldinger v. Northwest Airlines (1996) 51 Cal.App.4th 345, 366, (FEHA religious discrimination and retaliation claims not preempted by the RLA); Deschene v. Pinole Point Steel Co. (1999) 76 CalApp.4th 33, 42, 48 (FEHA age and medical condition claims, and wrongful termination in violation of public policy claim not preempted by section 301); Humble v. Boeing Co. (9th Cir. 2002), supra, 305 F.3d 1004, 1008 (Washington State antidiscrimination law not preempted by section 301).

Disputed questions of an employer’s state of mind are factual inquiries and do not warrant preemption

In the context of antidiscrimination statutes like the Fair Employment and Housing Act and California Family Rights Act, preemption arises only when interpretation of a labor contract is necessary to resolving the discrimination itself – and not factual questions of the employee’s conduct or the employer’s conduct and motivation. Thus, resolving the question of the employer’s motive is not sufficient to trigger RLA/LMRA § 301 preemption.

In Haney, supra, 121 Cal.App.4th at 639-41, the California court of appeal applied the Lingle rationale to find LMRA § 301 did not preempt Haney’s wrongful termination in violation of public policy claim. The fifth appellate district found although “the motivating reason for Haney’s discharge is contested, . . . that contest involves factual issues that can be resolved without interpreting the provisions of the CBA.” (Id., at 614 [emphasis added]; see also, Soldinger v. Northwest Airlines (1996) 51 Cal.App.4th 345, 369 [finding by the second appellate district that “[w]hile a potential defense may be relevant to the preemption discussion, if the state law allegations turn on factual questions relating to the employee’s conduct and the employer’s conduct and motivation, the CBA is not being interpreted and the state law claim is not preempted [by the RLA].”].)

Keep fighting the good fight

Dr. Martin Luther King, Jr. proclaimed, “There comes a time when people get tired of being trampled over by the iron feet of oppression.” Although worker support for unions is increasing, the percentage of American union members has fallen to only 10.1% in 2022 – the lowest on record. (U.S. Bureau of Labor Statistics, Economic News Release, Union Members Summary, Jan. 19, 2023.)

The decline of unionization mirrors the rise of inequality in the U.S., which means that working people are now losing two hundred billion dollars annually as a result of union erosion. (Pezzella, G. “The New NLRA America’s labor laws are fundamentally broken. Here’s one plan to fix them.” Georgetown J. on Poverty Law & Poverty, Apr. 17, 2020.)

In the words of César Chavez, “The powers that be make themselves richer by exploiting the poor. The time is now for people, of all races and backgrounds, to sound the trumpets of change.” Keep fighting the good fight, for “true wealth is not measured in money or status or power. It is measured in the legacy that we leave behind for those we love and those we inspire.” (César Chavez, Eulogy for Rufino Contreras, 1979.)