Opposition Brief — National Steel Corp. v. White

a

—

No. 91-527 , OCT 2 4 199%

In the ' |

Supreme Court of the United States ae

October Term, 1991

NATIONAL STEEL CORPORATION,

Petitioner

VS.

Arthur Dale White, James Anderson, James H. Baker, Thomas A.

Balon, Richard S. Barber, Larry G. Beil, David S. Bickler, Robert L.

Billick, Edward Bittner, Todd A. Blair, Richard Blancato, Robert A.

Bray, Jr., Harry V. Brown, Jr., James H. Browning, James William

Bullock, Charles A. Clark, Edward Dhayer, Ralph Anthony DiBacco,

William R. Duncan, Jr.,.Domenic F. Frio, Dorsey R. Garrett, William F

Garrison, James A. Gracie, III, Thomas M. Grishkevich, David R.

Harbin, James W. Hazlett, Rena Hess, Phillip E. Johnson, Jerry G.

Jones, Robert L. Jones, Joseph P. Karas, Bartley Robert Kirkbride,

Lloyd A. Klages, David J. Kondik, Frank W. Kruger, Jr., Charles L.

Lacey, Timothy C. Lawson, Ermest H. McCormick, Joseph W.

Mayemick, Boley Dale Mermon, Patricia Mlodzik, Charles D. Murray,

Dale E. Poole, Charles Prince, Larry C. Riggle, William B. Riggs.

Robert J. Ryan, Jr., John S. Sciance, Kenneth M. Seiple, John R.

Selmon, Jr., Dennis D. Shirer, Ronald L. Spring, Robert L. Sutton,

Frederick C. Tate, Stephen F. Tucker, Hoy L. Van Hom, Frederick R.

Welshans, Charles F. West, Donald L. White, John W. Cominsky,

Walter F. Mrozek, Dominic A Tedeschi, Jr.,

Respondents.

ON Prerrrion FOR Writ oF CERTIORARI TO THE

Usrrep STAtTes Court oF APPEALS FOR THE FOURTH CiRCcUN

BRIEF IN OPPOSITION TO PETITION FOR WRIT OF CERTIORARI

RONALD G. BACKER i Third Floor,

(Counsel of Record) Grant Building

ROTHMAN GORDON FOREMAN Pittsburgh, PA 15219

& GROUDINE, P.C. (412) 338-1100

Counsel for Respondents

EDITOR'S NOTE

THE FOLLOWING PAGES WERE POOR HARD COPY

AT THE TIME OF,FILMING. IF AND WHEN A

BETTER COPY CAN BE OBTAINED, A NEW FICHE

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ORIGINAL PAGINATION IS NOT COUNTINUOUS.

i

QUESTION PRESENTED FOR REVIEW

Are claims for breach of an express oral contract to return

employees to their former jobs within a bargaining unit pre-

empted under Section 301(a) of the Labor-Management Relations

Act, 29 U.S.C. § 185(a) when the claims, as expressed, do not rely

on the Collective Bargaining Agreement?

**

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES

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STATEMENT OF THE CASE

Se | _____, RIE N EN Nard tran TpED TF onTD l

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2. Layoffs of Former Hourly Employees .................. 6

3. Layoffs of Former SNE Employees .................006 7

REASONS FOR NOT GRANTING THE WRIT

A. The principle of law to be applied

is GE CUE WD WE II seviccscccseitentncasersinsncesetensintsmnsss 8

B. This is not a case of first impression

in the United States Supreme Court .............:ccceeeeees 11

C. There is surprising unanimity by

the federal courts on the issue raised

by National Steel in its Petition .............:ccccceseeneeees 13

CNY seirteriscorsnrmcentessstestnicidinsisecsnnineventenetmmmenntiaaanin 20

ili

TABLE OF AUTHORITIES

CASES

Page

Allis-Chalmers Corp. v. Lueck,

Neen ee ss caccenttwinitoneiayanunerenveeensensees 8, 13

Anderson v. Ford Motor Co.,

Be ee Pe CN ET. BOWS vcccvrvesccccvceserevccvessesevccsscssesnseses 13, 14

Berda v. CBS, Inc.,

881 F.2d 20 (3rd Cir. 1989),

Cost, Genied, TIO S. Cr. S79 (1990) ......ceccccosccescsvssseesesvevsnes 15, 16

Caterpillar, Inc. v. Williams,

I a ssasduneessventeseusesvevesvunsees passim

Electrical Workers v. Hechler,

a. secs senanuusuinsstionssnowsniesverenecs 8,9

Holland v. Nationai Steel Corp.,

De Re CE GE, BUDO) vvccsevescesnsecesscevesessssovssverenseess 16, 17

Kern v. United Steelworkers of America, Local 1688,

are 17

Lingle v. Norge Div. of Magic Chef Inc.,

I ci ccaceenennsiurevennenvesievineeeevereneesnvetes passim

Malia v. RCA Corp.,

794 F.2d 909 (3rd Cir. 1986), cert. denied,

EE 14, 15

Miller v. Fairchild Industries, Inc.,

re NG MND CELINE, BOTED oucccscscecceecsevsicsesseerescscesnevgnereoses 16

Page

Redmond vy. Dresser Industries, Inc.,

a a Ce RT, SI i oisd scr chicesisubavnnsdonesetodentoosenseenasin’ 17

Ulrich v. Goodyear Tire and Rubber Co.,

re re et I caecicercichancseecsecintstncteimcnesecncsaemieniccninn 17

United Steelworkers of America v. Rawson,

ho Be Be IRR Rr inns See RRIE o OE 8,9, 10

STATUTES

Section 301 of the Labor-Management

Relations Act of 1947,

Ee ee ecanadebioen anneal passim

l

STATEMENT OF THE CASE

A. Procedural History

On April 29, 1983, a Complaint was filed on behalf of sixty-

two named Plaintiffs against National Sieel Corporation (‘‘Na-

tional Steel’) in the Circuit Court of Hancock County, West

Virginia. National Steel removed the case to the United States

District Court for the Northern District of West Virginia on May

23, 1983. Subsequent thereto, an Amended Complaint was filed.

In November of 1984, Plaintiffs and National Steel began

engaging in discovery. This extensive pre-trial discovery contin-

ued through 1985 and 1986. As a result of information obtained

during discovery, Plaintiffs were permitted to file a Second

Amended Complaint. In June, 1987, the Plaintiffs filed Motions

for Partial Summary Judgment. National Steel also filed Motions

for Summary Judgment against most of the Plaintiffs and their

claims.

The District Court held several conference type hearings with

counsel in the Summer and Fall of 1988. The Court requested and

reccived extensive supplemental briefs. During these hearings,

the Court denied Plaintiff’s Motions for Partial Summary Judg-

ment, and with regard to National Steel’s Motions for Summary

Judgment, the Court denied in part and granted in part these

motions. On August 30, 1989, the District Court filed its Opinion

which finalized and clarified its previously enunciated tentative

holdings and findings.

Consolidated appeals from the District Court were then filed,

which were properly before the Fourth Circuit Court of Appeals

either pursuant to final judgments entered pursuant to Rule 54(b)

or appeals properly taken from portions of the lower court's order

which were certified under 28 U.S.C. § 1292(b). The Fourth

Circuit, by a unanimous opinion of a three judge panel consisting

of Circuit Judges Sprouse and Wilkinson, and District Judge Ellis,

2

sitting by designation, affirmed in part, reversed in part, and

remanded the case to the District Court.

The net effect of the decision of the Fourth Circuit was to have

a number of Plaintiffs dismissed from the case. In addition, as to

those Plaintiffs that remain in the case, most of their claims have

been dismissed, i.e., those sounding in express fraud, constructive

fraud, and implied-in-law contracts. In addition, the Fourth

Circuit limited the amount of damages that each Plaintiff could

claim, by setting a date after which no damages could be collected.

As to the Plaintiffs that remain in the case, the only claim that

they have left against National Steel is one for breach of an express

oral contract. As to that claim, the Fourth Circuit held that it should

not be dismissed based upon the doctrine of federal pre-emption.

It is from that holding that National Steel has filed its Petition for

Writ of Certiorari.

B. Statement of Facts

1. The Plaintiffs

The Plaintiffs in this case began working at National Steel's

Weirton, West Virginia Division as hourly rate laborers or entry

level clerks. Their starting dates varied. Some Plaintiffs were

hired in the 1950's and others in the 1960's and 1970's. The hourly

employees became members of the Production and Maintenance

(P&M) bargaining unit of the Independent Steelworkers Union

(ISU). The terms and conditions of employment for hourly

employees were governed by a collective bargaining agreement

which was periodically negotiated between the ISU and National

Steel.

Fifteen Plaintiffs were hired or subsequently transferred to

clerk positions (i.e., salaried non-exempt employees). Prior to

1976, anon-exempt employee had no job security or protection in

written form. In October, 1976, National Steel published and

3

distributed to all salaried non-exempt employees a booklet entitled

the Standard Practice Manual. This manual set forth the terms and

conditions of salary non-exempt employment.

In September of 1978, the salaried non-exempt employees at

Weirton chose the ISU as their exclusive representative for pur-

poses of collective bargaining. The ISU and National Steel agreed

to their first collective bargaining agreement in 1979.

The P&M collective bargaining agreement contained a se-

niority section. Hourly employees accumulated company, depart-

ment, sequence and job seniority under the union contract. - This

accumulated seniority provided Plaintiffs with job security in two

respects: first, by allowing them to transfer to better jobs in the

hourly ranks and, second, by providing them with a significant

measure of protection against layoffs which were based upon

Company seniority. Therefore, an hourly employee with many

years of service would have little concer regarding layoffs unless

such layoffs were tantamount to a plant shutdown.

Likewise, salaried non-exempt employees accumulated se-

niority under the provisions of the Standard Practice Manual.

Since layoffs in the non-exempt ranks were based on Company

seniority, anon-exempt employee with sufficient years of service

enjoyed a meaningful measure of job security.

At some point during a plaintiff's employment with National

Steel, each of the sixty Plaintiffs in Counts 1 and 3 of the

Complaint was offered a promotion to an entry level management

position as a foreman or supervisor. In virtually every case, a

Plaintiff did not apply for the management (exempt) position.

Rather, Plaintiffs were approached by supervisors in their depar-

ment and were asked to consider promotion to an exempt position.

The majority of the Plaintiff were so reluctant to accept a

management position, they initially refused promotion. This

reluctance was based upon two aspects of the exempt position.

4

First, management employees were not protected by either

the P&M collective bargaining agreement, the salaried non-ex-

empt bargaining contract or, where applicable, the Standard Prac-

tice Manual. Second, a foreman’s salary was not significantly

greater than that of an hourly or non-exempt employee with

comparable years of service. In fact, in some cases, promotion

meant a reduction in pay.

National Steel’s difficulty in convincing talented employees

to work as foremen was best described by John G. Redline, who

was President of Weirton Steel from 1977 to 1983. Redline

testified that it was hard to convince employees with the requisite

time and talent to move up to management. “The wage structure

was pretty good for hourly people and it is a job that you work eight

hours and go home. You don’t have to worry about the plant once

you are at home which is a lot different than management. In

management you are subject to call 24 hours a day. So it was —

I think those people that were eaming a good livelihood and

probably observed the work ethic of the supervisors, were very

satisfied with what they had.”

At the time they were offered management positions, virtu-

ally all Plaintiffs were aware of several practices which the

Company had fostered through the years to protect its manage-

ment employees. First, management employees were routinely

retumed to their prior hourly or non-exempt positions during

management reductions. Second, prior to 1979, management

layoffs were determined primarily upon the employee's Company

seniority as opposed to management seniority.

Although the Plaintiffs were well aware of said practices

when they were offered management positions, most of them,

nevertheless, raised specific questions regarding job security in

the management ranks. In some cases, these questions were

directed to and answered by the departmental supervisor who had

offered the Plaintiff the management position. In other cases, a

Plaintiff's supervisor directed him to meet with a representative of

5

the personnel department for an explanation of his rights.

At these promotion interviews, the Plaintiffs who chose to

ask, typically asked two types of questions. First, numerous

Plaintiffs asked whether they would be allowed to transfer back to

their former jobs in the hourly or non-exempt ranks if there was a

management layoff or if they did not like the job and/or could not

handle it. In fielding these questions, National Steel’s representa-

tives knew that if any limitations were placed on a foreman’s right

to return it would result in a substantial reduction in the number of

bargaining unit employees willing to accept promotion to fore-

man. John Lewis, a Labor Contract Administrator at Weirton

during the period 1977-1984, testified that if an impediment in the

form of an inability to return to the bargaining unit was placed in

front of an individual considering promotion, it would make it

difficult to promote people to management. Therefore, Plaintiffs

were assured by National Steel that they had the right to elect to

retum to their hourly or non-exempt positions.

A second type of question frequently asked revolved around

the possibility of Plaintiffs losing their many years of Company

service, Or seniority, if they accepted a management position.

They did not want to lose their positions in the event of a

management layoff. They asked questions such as “What happens

to my Company time?” or “What happens to my seniority?”

Although the responses from National Steel's agents varied, each

Plaintiff who asked about his Company time was assured that he

would keep his Company seniority, and/or management layoffs

would be based upon Company time.

Each of the Plaintiffs relied upon the promises and guarantees

made to him by National's representatives when they accepted a

promotion and left either the hourly or non-exempt ranks. If a

Plaintiff had been told that he would not keep his Company

seniority and/or that he had no right to retum to his hourly or non-

exempt position, he would not have accepted the management

position by leaving his bargaining unit job.

——— eee

6

2. Layoffs of Former Hourly Employees

In the Summer of 1979, National Steel began making prepa-

rations for major management layoffs. Several written drafts of

policies pertaining to management layoffs were prepared under

the direction of John A. McCreary, Vice President of Industrial

Relations. The guidelines for salaried exempt layoffs in 1979

utilized the following factors: (1) job performance; (2) impor-

tance/priority of function; and (3) exempt seniority date. Exempt

seniority date is the date a Plaintiff became an exempt employee;

i.e., a foreman or supervisor, whereas Company date is the date the

Plaintiff began working for the Company as an hourly or non-

exempt employee.

When the Plaintiffs were notified by National Steel in 1982

that they were being laid-off, those Plaintiffs with priorexperience

in the P&M bargaining unit requested to retum to their former

positions pursuant to the guarantee which had been made to them

when they accepted the management positions. Those Plaintiffs

were told, at that time, that they could not retum to their former

positions. The Plaintiffs in question were laid-off based upon their

exempt dates.

When National Steel began laying off large numbers of

foremen and tum supervisors including the Plaintiffs, the guide-

lines utilized in the 1982 exempt layoffs were essentially the same

as those developed in 1979. Individuals with job performance

* problems were reduced first and then “[A]ssuming all personnel

were Satisfactory performers, the exempt seniority date is the next

determinant utilized”.

At least thirty-one Plaintiffs with prior P&M bargaining unit

experience would not have been laid-off from the P&M ranks if

they had been permitted to retum to their former positions or if they

had never left the bargaining unit. Fourteen others may have been

laid-off if they returned to their prior P&M positions - or had never

left - but their layoff would have lasted a shorter period of time.

7

3. Layoff of Former SNE Employees

National Steel also laid-off management employees with

salaried non-exempt experience in 1982. The 1979 and 1980

collective bargaining agreements between National Steel and the

non-exempt bargaining unit of the ISU did not address the right or

ability of a foreman to retum to his prior position in the non-

exempt ranks. In 1979 and 1980, the parties agreed that Section 6.5

of the Standard Practice Manual would apply until other seniority

provision were agreed upon. When large numbers of management

layoffs began in 1982, Section 6.5 of the Standard Practice Manual

was still ineffect. Company policy, as set forth in Section E.2.b.(3)

of the Standard Practice Manual, provided that an employee who

retums to the non-exempt ranks shall have his Company seniority

restored with full credit for all time worked in such a position

which is excluded from the non-exempt salaried unit.

National Steel did not notify or inform its management

employees that it was going to prohibit foreman with salaried non-

exempt experience from retuming to the non-exempt ranks. Eleven

Plaintiffs with non-exempt experience were laid-off in 1982 sub-

sequent to August 20, 1982. These Plaintiffs requested to retum

to their former non-exempt positions pursuant to the guarantees

previously received and they were told that they could not retum

to their priornon-exempt positions. These eleven Plaintiffs would

not have been laid-off if they had been permitted to return to their

former positions or if they had not previously relinquished their

non-exempt positions.

Forty-one Plaintiffs were ultimately recalled to management

positions by National Steel from early 1983 until January 10, 1984.

On January 11, 1984, National Steel sold substantially all of the

assets of the Weirton Steel Division to Weirton Steel Corporation

under an employee stock ownership plan (ESOP). Twelve other

Plaintiffs were recalled by the new Weirton Steel Corporaiion

after January 11, 1984. Nine Plaintiffs were never recalled. The

claim of the Plaintiffs that remains is for breach of the express

8

promise by National Steel when each of the Plaintiffs was pro-

moted out of the hourly or salary non-exempt ranks, i.e., that each

would be returned to the hourly ranks and that Company seniority

would be utilized to determine layoffs.

REASONS FOR NOT GRANTING THE WRIT

A. The Principle of Law to be

Applied in the Case is Well-Settled

The sole issue raised in the Petition for Writ of Certiorari filed

by National Steel is whether the Plaintiffs’ individual breach of

contract claims should be dismissed, based upon the doctrine of

federal pre-emption under Section 301(a) of the Labor-Manage-

ment Relations Act, 29 U.S.C. § 185(a). The scope of the federal

pre-emption of Section 301 has been addressed numerous times by

the United States Supreme Court in the last six years. See, e.g.,

United Steelworkers of America v. Rawson, 110 S.Ct. 1904 (1990);

Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399 (1988),

Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987), Electrical

Workers v. Hechler, 481 U.S. 851 (1987), Allis-Chalmers Corp. v.

Lueck, 471 U.S. 202 (1985). As can be seen by the last three

Supreme Court decisions on this issue, the principle of law to be

applied in a § 301 pre-exemption case is well-settled.

In Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987), the issue

was whether state law claims for breach of individual employment

contracts were completely pre-empted by § 301. In that case, the

Plaintiffs were non-union employees who were promised by their

employer, Caterpillar, that if a certain facility ever closed, Caterpil-

lar would provide them employment opportunities at other facili-

ties. The facility was eventually closed and Plaintiffs were termi-

nated, without regard to their individual employment contracts.

The Plaintiffs sued in state court for breach of their individual

employment contracts. Caterpillar attempted to remove the action

to federal court, based upon the doctrine of “complete pre-emption”’

9

and the collective bargaining agreement in effect at Caterpillar. It

should be noted that the claims in the Caterpillar case are substan-

tially similar to the claims in the present case.

Justice Brennan wrote the opinion for the unanimous Su-

preme Court. He first reiterated the two-pronged test for pre-

emption claims under § 301. He stated that the claims pre-empted

are those “founded directly on rights created by collective bargain-

ing agreements and also claims ‘substantially dependent on an

analysis of a collective bargaining agreement’”, citing Electrical

Workers v. Hechler, 481 U.s. 851, 859, n. 3 (1987). In refusing to

find pre-emption under the facts of the Caterpillar case, Justice

Brennan wrote:

Respondents allege that Caterpillar has entered into and

breached individual employment contracts with them.

Section 301 says nothing about the content or validity of

individual employment contracts (482 US at 394) (em-

phasis in original)

The next case is Lingle v. Norge Division, Magic Chef, 486

U.S. 399 (1988). In that case, a bareaining unit employee filed a

wrongful discharge case contending that she had been discharged

from employment in retaliation for filing a worker’s compensation

claim. Her union had also filed a grievance on her behalf. Again,

the question of pre-emption was raised. !n this case, the Supreme

Court considered the second prong of the pre-emption test: depen-

dence on an analysis of a collective bargaining agreement.

Justice Stevens wrote the opinion for the unanimous Supreme

Court. In refusing to hold that the Plaintiff's retaliatory discharge

claim was pre-empted, he stated, “[(R]esolution of the state-law

claim does not require construing the collective bargaining agree-

ment.” (486 U.S. at 407).

The next case was United Steelworkers of America v Rawson,

110 S. Ct. 1904 (1990) which involved a wrongful death action

10

brought by the survivors of workers who were killed in an under-

ground fire that occurred in a mine in the State of Idaho. As to the

cause of action pleaded against the defendant Union, the Plaintiffs

alleged that pursuant to a collective bargaining agreement, the

Union undertook the responsibility to inspect mines for safety

defects and that it had negligently performed those inspections,

contributing to the deaths of the Plaintiffs. In this case, the

Supreme Court considered the first part of the pre-emption test:

i.e., rights founded directly under the collective bargaining agree-

ment.

Justice White wrote the majority opinion, which was joined

by four other Justices. In holding that the Plaintiffs’ claims were

pre-empted, the Court said:

If the Union failed to perform a duty in connection with

inspection, it was a duty arising out of the collective

bargaining agreement signed by the Union as the bargain-

ing agent for the miners. Clearly the enforcement of that

agreement_and the remedies for its breach are matters

governed by federal law. (110 S. Ct. at 1910)

Thus, the two-pronged test for analysis of pre-emption under

§ 301 is well-established in the opinions of the Supreme Court.

This was the test applied by the District Court in this case by Judge

Kaufmann. (See generally, Appendix, pp 9a-10a). It was the

standard applied by the Fourth Circuit in this case by the unani-

mous three-judge panel. (See, generally, Appendix, 95a). Indeed,

in its Petition for Writ of Certiorari, National Steel admits that “the

Fourth Circuit correctly identified the threshold issue presented in

this litigation ....” (Petition, p.15).

Nowhere in its Petition for Writ of Certiorari does National Steel

request that the two-pronged test for analysis of § 301 pre-emption be

modified on abandoned. It is a principle of law that is well-recognized

and universally applied, not just by the lower courts in the case, but

by all federal and state courts that have addressed the issue.

1]

Accordingly, since the Supreme Court has addressed this

issue Numerous times in recent years, the principle of law to be

applied is well-established, and there is no claim by National Steel

that the principle of law should be revised or abandoned, there is

no compelling reason for the Supreme Court to grant Certiorari in

this case.

B. This is Not a Case of First Impression

in the United States Supreme Court

At page 13 of its Petition, National Steel characterizes the

issue in this case as “the extent of § 301°s preemptive effect on the

State law claims of non-bargaining unit employees alleging breach

of individual contracts to retum them with seniority to their former

bargaining unit positions.” Admittedly, if the issue in this case is

worded so narrowly, then the U.S. Supreme Court has never

addressed this issue.

However, the issue in this case is really much broader, i.e.,

whether a defendant, by alleging that a collective bargaining

agreement may have some relationship to a lawsuit which, on its

face, is independent of a collective bargaining agreement, may

cause the claims to be pre-empted and therefore dismissed, with-

Out ever considering the merits of the claim. There is little dispute

that the Plaintiffs’ claims, each of which arises from an express

oral promise of an agent of National Steel, does not rely on the

collective-bargaining agreement. The Fourth Circuit commented

that “the Plaintiffs contract claims here are also independent of any

collective bargaining agreement .... [T}hey depend on independent

oral contracts of employment that do not rely on the terms of any

collective bargaining agreement.”” (Appendix, p.98a).

Indeed, the exact issue in the case was addressed by the

unanimous Supreme Court in the Caterpillar case. Just as in this

case, the Plaintiffs in Caterpillar alleged breaches of express oral

promises concerning job security in the event of layoffs at the

plant. In that case, the Court said “that a Plaintiff covered by a

_ 12

collective bargaining agreement is permitted to assert legal rights

independent of that agreement, including state law contact rights

so long as the contract relied upon is not a collective bargaining

agreement.”' (482 U.S. 396) (emphasis in original). The Court, in

Caterpillar, by a unanimous decision, refused to find federal pre-

emption and, as noted by the Fourth Circuit, the facts in Caterpillar

contain “many similarities to the present one....”” (Opinion of the

Fourth Circuit, Appendix, p. 97a).

The only claim of each Plaintiff that remains, after the

decision of the Fourth Circuit, is breach of an express contract of

National Steel promising each Plaintiff a form of employment

security in the event of a layoff. As the Fourth Circuit held, these

do not arise from the collective bargaining agreement. Nor must

the collective bargaining agreement be interpreted by the Court

except in one small instance. If any of the Plaintiffs prevail upon

their express contract claims, his seniority must be determined, in

order to calculate his damages. However, the seniority provision

of the collective bargaining agreement will be interpreted in

accordance with federal common law, and there is no pre-emption.

This exact issue was addressed by the Supreme Court in its

unanimous decision in Lingle, supra:

A collective bargaining agreement may, of course, con-

tain information such as rate of pay and other economic

benefits that might be helpful in determining the damages

to which a worker prevailing in a state suit is entitled.

Although federal law would govem the interpretation of

the agreement to determine the proper damages, the un-

derlying state law claim, not otherwise pre-empted, would

stand. (486 U.S. at 413) (citation omitted).

' In the prevesent case, the Plaintiffs were not even members of the

respective union at the time their claims accrued, and therefore could not assert

any rights under the collective bargaining agreement, even if they so desired.

13

Finally, this case involves over fifty (SO) plaintiffs who each

assert a slightly different express contract claim against National

Steel. Some of the claims relate to former hourly employees and

some relate to former salary non-exempt employees. Therefore, if

the Supreme Court is interested in resolving the very narrow issue

raised by National Steel in its Petition, this is not the best case to

do so. The complex fact situation will make it difficult for the

Supreme Court to enunciate a clear rule of law which can be

applied in later cases.

In fact, since the “full scope of the pre-emptive effect of

federal labor contract law remains to be fleshed out on a case-by-

case basis”. (Allis Chalmers Corp. v. Lueck, 471 U.S. 202, 220

(1985), a decision by the Supreme Court in this case, given its

complex factual situation, would give little guidance to the lower

federal courts in future cases.

C. There is surprising unanimity by

the federal courts on the issue raised by

National Steel in its Petition.

Despite the contention in the Petition for Writ of Certiorari,

there seems to be a consensus in the Circuit and District Courts

concerning the issue raised in Petition. Those cases that reach a

contrary result are distinguishable.

1. Cases that are consistent with the Fourth Circuit Opinion.

In Anderson v. Ford Motor Co., 803 F.2d 953 (8th Cir. 1986),

Ford had scheduled a production increase to begin in December,

1983, at an assembly plant in St. Paul, Minnesota. As a result

thereof, Ford needed to hire an additional 250 production employ-

ees at the plant. By agreement with the United Auto Workers, Ford

was required to offer these jobs to certain laid-off Ford employees

on a preferential hiring list, whose plants had either been shut

down or who were on indefinite layoff. Ford also contacted the

Plaintiffs, whose recall rights had expired because of the length of

14

time they had been laid off, and promised them that they would be

hired as permanent employees at Ford. Because they were former

Ford employees, they were familiar with the preferential hiring list

and therefore they sought repeated assurances that they would not

be bumped by any preferential hirees.

In order to convince the Plaintiffs to come to work, Ford told

them that the preferential hiring list had been exhausted and that

they would not be replaced by preferential hirees. Based on these

promises, the Plaintiffs agreed to come to work at Ford. Within

ninety (90) days, and despite the express promises by Ford, the

Plaintiffs were bumped from their jobs by employees from the

preferential hiring list.

In refusing to dismiss the Plaintiffs’ claims under the doctrine

of pre-emption by federal labor laws, the Eighth Court said:

[W]e do not think that because Ford had the right to

displace apnellants under the terms of the collective bar-

gaining agreement, the company also had the night to

either misrepresent to appellants the terms and conditions

of employment or to avoid contractual or quasi-contrac-

tual obligations based upon pre-employment promises.

(803 F. 2d at 958).

That language is particularly relevant to the facts in the present

case.

The facts in Malia v. RCA Corp., 794 F.2d 909 (3rd Cir.

1986), cert. denied, 482 U.S. 927 (1987) are very similar to those

in the present case. Malia was a member of the bargaining unit

when he was offered a promotion to a managerial position outside

the bargaining unit. As an inducement to accepting the promotion,

Malia received higher pay, increased hours and overtime and the

option to return to the bargaining unit if Malia was not satisfied

with the new position. In less than three (3) weeks, Malia requested

a retum to his former position, and management refused, even

15

though such a position eventually became available.

Malia sued, inter alia, for breach of his oral contract to retum

to the unit, a completely separate agreement from the collective

bargaining agreement. The Third Circuit held that such a claim

was not pre-empted by § 301. The Court said:

Nothing in the LMRA prevents an individual - whether

that individual is to be newly hired or promoted from a

bargaining unit - from negotiating an employment con-

tract for a management position. Nor does the LMRA

prevent an individual - whether an applicant for new

employment or a current employee in a supervisory posi-

tion - from negotiating for a job in a bargaining unit so long

as that employment will be on terms and conditions set

forth in the collective bargaining agreement (794 F.2d at

913) (footnote omitted).

Similarly, the Plaintiffs in the present case negotiated an

individual contract for a job in the bargaining unit. In other words,

if National Steel had kept its promises, the Plaintiffs would have

been returned to the bargaining unit, and theiremployment would

have then been in accordance with the terms and conditions of the

collective bargaining agreement, including its seniority provi-

sions. Thus, there is no pre-emption.

In Berda v. CBS, Inc., 881 F.2d 20 (3rd Cir. 1989), Judge

Becker, who dissented in Malia, wrote the unanimous decision for

a panel of the Third Circuit. In that case, the Plaintiff alleged that

before he accepted a job at CBS, he was promised that he was

guaranteed employment with CBS for the reasonably foreseeable

future and that his job would not be seasonal or temporary, but

rather, a permanent position. Berda then went to work at CBS,

joined the union, and five (5) months later was laid-off. He sued,

inter alia, for breach of his oral contract.

Even though the collective bargaining agreement which

16

covered the Plaintiff, had a specific layoff provision in it, the Third

Circuit held that the oral contract claim was not pre-empted. The

Court stated that the Plaintiff's “contract claims are very similar to

the Plaintiff's claims in Caterpillar” (881 F.2d at 25) “and that the

Supreme Court has made clear that Section 301 does not preempt

state contract causes of action premised on pre-employment agree-

ments that are advantageous to the employee.” (881 F.2d at 26).

In the present case, the only difference is that the oral contracts

were pre-promotion agreements, not pre-employment agreements.

In Miller v. Fairchild Industries, Inc., 668 F.Supp. 461 (D.

Md. 1987) the Defendant publicly promised job security to its

employees even as it privately planned to shut down its Hagerstown

plant. The Plaintiffs sued Fairchild, inter alia, on claims of fraud

and misrepresentation when they lost their jobs. Even though the

Plaintiffs were bargaining unit employees, the District Court held

that the claims were not pre-empted, noting once again that

Caterpillar is “a case that is factually similar to this one. (668

F.Supp. at 461).

Significantly, in the present case, the Fourth Circuit relied on

Caterpillar and noted that it was “a case with many similarities to

the present one....” (Appendix, p. 97a).

2. Other Cases

In their Petition, National Steel cites several cases that it

contends conflicts with the Fourth Circuit’s decision in the present

case. They are, however, distinguishable. Holland v. National

Steel, 791 F.2d 1132 (4th Cir. 1986) involved the same layoffs

which are the subject of the instant action, and a claim of a right to

retum to the bargaining unit. However, Holland based her claim

on the provisions of the collective bargaining agreement and not

on an individual employment contract. Thus, her claim was pre-

empted. To lend further support to the position that the Holland

case is distinguishable to the present one, Judge Sprouse, who was

on the panel in this case, wrote the Holland decision.

17

Redmond v. Dresser Industries, Inc., 734 F.2d 633 (11th Cir.

1984) is nearly identical to Holland. The alleged right to return to

the bargaining unit was based upon the specific terms of the

collective bargaining agreement, rather than a separate oral prom-

ise.

Kern v. United Steelworkers of America, Local 1688, 669

F.Supp. 701 (M.D. Pa. 1987) cannot be distinguished on its facts.

However, it was decided before the Supreme Court decision in

Caterpillar and the Third Circuit decision in Berda and cannot

now be considered good law.

The best case for the Petitioner is Ulrich v.Goodyear Tire and

Rubber Co., 884 F.2d 936 (6th Cir. 1989), which has facts similar

to the present case. The Court held that the state law claims were

“inextricably intertwined” with the collective bargaining agree-

ment, and therefore pre-empted. The Sixth Circuit did not discuss

Caterpillar in its decision.

In addition, and very significantly, the Sixth Circuit did not

dismiss all of the claims but rather, allowed the case to proceed ‘“‘on

the merits of their contract and promissory estoppel claims as a

matter of federal common law.” (884 F.2d at 938). Thus, the

claims of the right to return to the bargaining unit were not

dismissed in their entirety.

Based upon the surprising uniformity of the decisions in the

federal courts, and the binding effect of the Caterpillar decision,

there isno compelling reason for the grant of Certiorari in this case.

20

CONCLUSION

For the reasons set forth herein, the Plaintiffs respectfully

request this Honorable Court to deny the Petition for Writ of

Certiorari.

ROTHMAN GORDON FOREMAN

& GROUDINE, P.C.

By_ ASI Kemet G. Rockey

RONALD G. BACKER, ESQUIRE

Third Floor, Grant Bldg.

Pittsburgh, PA 15219

(412) 338-1100

Attorneys for Respondents

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