Petition for Writ of Certiorari — CBS Inc. v. Berda

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8 9 «5 89 , i Supreme Court. U.S.

Aik f D

No. | | OCT 13 1989

YOSEPH F. SPANIOL, UR,

- aa

IN THE pete wil

Supreme Court of the ‘nited ates

OcTOBER TERM, 1989

CBS INC.,

Petitioner,

VS.

MARTIN W. BERDA and LINDA BERDA,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Douc.as P. JAcoss*

HELEN M. GoLp

ANTHONY M. BONGIORNO

Of Counsel: CBS Inc.

ARTHUR J. SCHWAB 51 West 52nd Street

Mark A. FONTANA New York, NY 10019

REED SMITH SHAW - (212) 975-3031

& McCray ss

435 Sixth Avenue Attorneys for Petitioner

Pittsburgh, PA 15219 CBS Inc.

(412) 288-3112 * Counsel of Record

QUESTIONS PRESENTED FOR REVIEW

1. Whether courts should be creating new substantive rights

which conflict with the legislative framework for the ordering

of relations between employees and employers under the Labor

Management Relations Act, so as to permit a bargaining-unit

employee to proceed with state-law contract and fraud claims

predicated on pre-employment individual promises that con-

flict with the terms of a collective bargaining agreement — a

question on which the Circuits have split?

2. Whether a rule allowing state-law claims to proceed on

these facts will invite bargaining-unit members to abandon the

arbitral forum, which forum best serves the mandate for the

development and application of uniform federal law to

labor/management disputes?

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW...... i

Wy WARP RED ow ee eee Vv

9 }

i a 5k kas de 8k 4a 8 8 as 2

STATUTORY PROVISIONS INVOLVED ....... 2

STATEMENT OF THE CASE ................. 2

REASONS FOR GRANTING THIS PETITION .. 9

THERE IS A SHARP SPLIT IN THE CIRCUITS

OVER WHETHER THE PRE-EMPTIVE

REACH OF § 301 EXTENDS TO PRE-

EMPLOYMENT PROMISES ABOUT THE

TERMS AND CONDITIONS OF

EMPLOYMENT IN A BARGAINING-UNIT

0 Se ell RS a 10

ew esestnes 10

B. The Third Circuit Correctly Recognized That

This Case Raises A “Circuit-Splitting” Issue. . . 12

A RULE ALLOWING STATE-LAW CLAIMS

TO PROCEED ON THESE FACTS WILL

INVITE BARGAINING-UNIT MEMBERS TO

ABANDON THE ARBITRAL FORUM, WHICH

FORUM BEST SERVES THE MANDATE FOR

THE DEVELOPMENT AND APPLICATION OF

Rear Ea Ee eae a 18

EC eg ar 24

TABLE OF AUTHORITIES

Cases

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202

EE ces vecr aah kA aaah eee anee se Comes ves

Anderson v. Ford Motor Co., 803 F.2d 953 (8th

Cir. 1986), cert. denied, 483 U.S. 1011 (1987) .

Avco Corp. v. Aero Lodge No. 735, International

Association of Machine and Aerospace Workers,

390 U.S. 557, reh’g denied, 391 U.S. 929 (1968)

Bale v. General Telephone Co., 795 F.2d 775

aes I nei aad ns rele ae es a cuees

Belknap, Inc. v. Hale, 463 U.S. 491 (1983) ......

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

Darden v. United States Steel Corp., 830 F.2d

RED Conk Get os os0 kc Ceckeed ee se

DeLapp v. Continental Can Co., 868 F.2d 1073

Gt En 45 se aks cee Ree ed sees

DelCostello v. International Brotherhood of

Teamsters, 462 U.S. 151 (1983) ..............

Eitmann v. New Orleans Public Service, Inc., 730

F.2d 359 (5th Cir.), cert. denied, 469 U.S.

SU CD os cece 5 ee eer es

Electrical Workers v. Hechler, 481 U.S. 851

PREG ee sere ree ee rere

J.I. Case Co. v. NLRB, 321 U.S. 332 (1944) .....

Lingle v. Norge Division of Magic Chef, Inc., 486

oe 2. ee rer rr err

Machinists v. Wisconsin Employment Relations

Commission, 427 U.S. 132 (1976) ............

Miller v. Fairchild Industries, Inc., 668 F. Supp.

ee rrr errs rey rere:

NLBB v. Allis-Chalmers Manufacturing Co., 388

U.S. 175, reh’'g denied, 389 U.S 892 (1967) ....

Republic Steel Corp. v. Maddox, 379 U.S. 650

ND ics sku Ns ox A ee

San Diego Building Trades Council v. Garmon,

Se Ue; Sie Te bck cs hes acca cess

Scaife Co. v. Rockwell-Standard Corp., 446 Pa.

280, 285 A.2d 451 (1971), cert. denied, 407

D.C os cee aeus ee an eee

Teamsters Local v. Lucas Flour Co., 369 U.S. 95

REED ok cv vccs cvetennedccwwde hen eueame en

Textile Workers v. Lincoln Mills, 353 U.S. 448

GED ns cn canvastecass emeunedes sen beeeke

Ulrich v. Goodyear Tire ¢> Rubber Co.,

_F.2d_, 132 L.R.R.M. 2321 (6th Cir.

ee eee ee ae ee eee eee

United Steelworkers of America v. American

Manufacturing Co., 363 U.S. 564 (1960) ......

6, 19

11, 18,

21, 22

11, 19

Vii

United Steelworkers of America v. Enterprise

Wheel and Car Corp., 363 U.S. 593 (1960)....

United Steelworkers of America v. Warrior &

Gulf Navigation Co., 363 U.S. 574 (1960) .....

Vacca v. Viacom Broadcasting of Missouri, Inc.,

875 F.2d 1337 (8th Cir. 1989) ...............

Varnum v. Nu-Car Carriers, Inc., 804 F.2d 638

(11th Cir. 1986), cert. denied, 481 U.S. 1049

hs CAR ae te rey

Wells v. General Motors Corp., 881 F.2d 166 (5th

NG ha Sau ae ake ek Se Ne A

Young v. Anthony's Fish Grottos, Inc.,830 F.2d

Pe PU NS ND x 685 cov c cena ne asbaesecs

Statutes

Labor Management Relations Act, Section 203(d)

Ge We US 5 go os ewes hweebadbiwnn

Labor Management Relations Act, Section 301 (29

SN, SE SoS oy hn aces bake Baa cous

National Labor Relations Act, Section 9(a) (29

ay aD Saas ck ap bast cae een ee Gk s

National Labor Relations Act, Section 10(b) (29

WN oe ats cea oetaw Ook uh eer k sn

ee oc esac saws Ces cae dew

Other

18A Business Organizations, Kheel, Labor Law

(MB) § 9.05[6] (August 1989) ................

Page

13, 16,

17, 20

Vili

Page

State Labor Law Developments, 4 The Lab.

me fF BRS eee ee eee 14

Yonover, Preemption of State Tort Remedies for

Wrongful Discharge in the Aftermath of Lingle

v. Norge: Wholly Independent or Inextricably

Intertwined?, 34 S.D.L. Rev. 63 (1989) ....... 14

United States Supreme Court Rule 17.1(a)....... 17

No. 89

IN THE

Supreme Court of the United States

OcrosBer TERM, 1989

CBS INC.,

Petitioner,

VS.

MARTIN W. BERDA ard LiNDA BERDA,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Third Circuit is reported at 881 F.2d 20 (3d Cir. 1989) and 13]

L.R.R.M. 3073 (3d Cir. 1989), and is reproduced at Appendix

pp. A-1-20. The opinion of the United States District Court for

the Western District of Pennsylvania is unreported, and is

reproduced at Appendix pp. A-22-25.

JURISDICTION

The Judgment of the United States District Court for the

Third Circuit was entered on July 20, 1989. (A-21) This Court's

jurisdiction is invoked under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

29 U.S.C. § 173(d):

Final adjustment by a method agreed upon by the par-

ties is declared to be the desirable method for settle-

ment of grievance disputes arising over the applica-

tion or interpretation of an existing collective-

bargaining agreement. The Service is directed to make

its conciliation and mediation services available in the

settlement of such grievance disputes only as a last

resort and in exceptional cases.

29 U.S.C § 185(a):

Suits for violation of contracts between an employer

and a labor organization representing employees in

an industry affecting commerce as defined in this

chapter, or between any such labor organizations, may

be brought in any district court of the United States

having jurisdiction of the parties, without respect to

the amount in controversy or without regard to the

citizenship of the parties.

STATEMENT OF THE CASE

This petition seeks review of a decision that represents an

assault on the legislative framework for the ordering of relations

between employers and employees under the Labor Manage-

ment Relations Act (“LMRA”). Petitioner CBS Inc. (“CBS”)' asks

‘ CBS has no corporate parent or affiliates, and has no corporate subsidiaries

other than wholly-owned subsidiaries. All parties to the proceeding below are

named in the caption.

this Court to review a Judgment of the United States Court of

Appeals for the Third Circuit which allows respondents Martin

W. Berda, and his wife, Linda Berda,? to proceed with state-law

contract and fraud claims arising from a company-wide lay-off,

notwithstanding the fact that Berda concedes that his lay-off was

in accordance with the terms of a collective bargaining agree-

ment (the “Collective Bargaining Agreement”) between CBS and

the International Brotherhood of Electrical Workers (“IBEW”).

To avoid the strictures of the Collective Bargaining Agree-

ment, Berda argued below that his lay-off violated pre-

employment individual promises of job security by CBS. By these

individual promises, despite the conflicting terms of of the Col-

lective Bargaining Agreement, and unlike all other CBS

bargaining-unit members, Berda argues that he alone was com-

pletely insulated from any decision by CBS to reduce its work-

force, or effect any other type of lay-off contemplated by the

Collective Bargaining Agreement. By the Judgment involved

here, the court below concluded that the terms and conditions

of Berda’s employment were controlled by the alleged individual

promises, and held that the pre-emptive reach of § 301 of the

LMRA does not extend to the pre-employment individual prom-

ises alleged by Berda.

A. Facts

Prior to his hire by CBS, Berda was employed by television

station WPXI in Pittsburgh, Pennsylvania in a bargaining-unit

position, and served as shop steward for the local union. (A-3)

On April 14, 1986, petitioner CBS hired respondent Berda

as a technician with CBS Operations and Engineering in

Washington, D.C. (A-3-4) It is undisputed that this was a

bargaining-unit position governed by the Collective Bargain-

ing Agreement between CBS and the IBEW. (A-4)

* As respondent Linda Berda’s only claim against CBS, for loss of consortium,

is purely derivative, references herein to “Berda” will refer to respondent Martin

W. Berda. Respondent Linda Berda’s claim is not separately addressed.

Section 1.01 of the Collective Bargaining Agreement provides

that “[a]ny changes, supplements or amendments” to the Agree-

ment must be signed by the parties. (A-27)

Section 5.03 of the Collective Bargaining Agreement provides,

in pertinent part, that:

[l]ayoffs caused by a reduction of staff shall be

made in the inverse order of seniority within each of

the separate units as defined in Section 5.02 ...

[which_goyverns the seniority of all bargaining-unit

employees].

(A-31)?

On August 29, 1986, Berda was laid off by CBS as part of

a company-wide reduction in the work-force. (A-4) Berda does

not dispute that his lay-off was in accordance with the terms

of the Collective Bargaining Agreement.

To avoid the effect of the Collective Bargaining Agreement,

Berda contends that his lay-off violated pre-employment in-

dividual promises of job security by CBS. On or about February

27, 1986, CBS allegedly induced him to accept employment by

promises that he would not face any lay-offs and that he would

be employed “for the reasonably foreseeable future. . . ” (A-3)

In Berda’s view, these promises completely insulated him from

any decision by CBS to reduce its work-force, or effect any other

type of lay-off contemplated by the Collective Bargaining

Agreement.

* Section 1.02 recognizes the Union as the sole and exclusive bargaining agent

for all technicians and provides that the Collective Bargaining Agreement con-

trols the terms and conditions of employment of technicians. (A-27)

Sections 2.01-.05 implement mandatory grievance and arbitration procedures

for the “equitable and efficient settlement of disputes and controversies on

specific questions arising under this Agreement .. ..” (A-28-29)

B. Procedural history

On January 19, 1988, respondents filed this action against peti-

tioner CBS in the Court of Common Pleas of Allegheny Coun-

ty, raising state-law claims under Pennsylania law for breach

of contract/promissory estoppel, fraudulent misrepresentation

and loss of consortium. (A-2, 4-5)

On February 25, 1988, CBS timely removed this case to the

United States District Court for the Western District of Penn-

sylvania on the basis of federal question and diversity jurisdic-

tion. (A-4-5)*

On February 25, 1988, CBS filed an Answer, denying liabili-

ty and raising, inter alia, the defense of pre-emption under

federal law. On March 17, 1988, CBS filed a motion for judg-

ment on the pleadings or, alternatively, for summary judgment.

(A-5) On April 5, 1988, respondents filed their opposition papers.*

By Memorandum Opinion and Order dated June 15, 1988,

the District Court concluded that respondents’ claims were pre-

empted by Section 301 of the LMRA, 29 U.S.C. § 185(a), as

resolution of those claims would “ultimately depend upon the

interpretation of a provision in the collective bargaining agree-

ment ... .” (A-25) In the District Court’s view, as the individual

promises were “inconsistent with Section 5.03 ... and would

limit or condition its terms,” they were, therefore, subsumed into

the Collective Bargaining Agreement and could be stated only

as a § 301 claim. (A-25)* Accordingly, as this claim had not been

filed within the six-month limitations period set forth in Sec-

tion 10(b) of the National Labor Relations Act (“NLRA”), 29

* CBS is a New York corporation with its principal place of business in New

York. Respondents are citizens of the Commonwealth of Pennsylvania.

* In light of the procedural posture of this case, the allegations of the Com-

plaint are not in dispute.

* In reaching this conclusion, the District Court relied upon J.J. Case Co. v.

NLRB, 321 U.S. 332, 338 (1944). (A-24)

U.S.C. § 160(b), which controls Section 301 claims,’ the District

Court granted CBS’ motion and dismissed the Complaint. (A-25)

By Judgment dated July 20, 1989, the Third Circuit reversed,

concluding that Berda’s claims were not pre-empted by § 301,

as they arose from individual promises that were made before

he joined the bargaining-unit and, accordingly, could be resolved

“without asking the court to analyze the collective bargaining

agreement....” (A-3) As the Third Circuit acknowledged, this

case raises

the circuit-splitting question whether state contract

and tort claims for monetary relief brought by a

bargaining unit employee against his employer based

upon alleged misrepresentations of job security, made

before the employee became a member of the bargain-

ing unit, thereby conferring additional rights to those

afforded by the collective bargaining agreement, are

preempted by section 301 ... .

(A-2)

In direct conflict with the Ninth Circuit’s holding in Young

v. Anthony's Fish Grottos, Inc., 830 F.2d 993 (9th Cir. 1987),

the Third Circuit reasoned that this Court’s decision in Cater-

pillar Inc. v. Williams, 482 U.S. 386 (1987) (hereinafter “Cater-

pillar”) controls this issue, even though that case is factually and

legally distinguishable. (A-13) Caterpillar involved issues of

removal jurisdiction and promises of job security to managerial

employees relating to the terms and conditions of their employ-

ment as managerial employees. Caterpillar, as the Ninth Circuit

’ Respondents conceded in the Third Circuit that if their state-law claims are

pre-empted by Section 301, the District Court properly dismissed these claims

as time-barred by the six-month limitations period for Section 301 actions.

See DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 169-72

(1983). It also follows that the respondents’ claims would be barred because

of their failure to exhaust the grievance and arbitration procedures mandated

by Sections 2.01-.05 of the Collective Bargaining Agreement. See Republic Steel

Corp. v. Maddox, 379 U.S. 650, 652-57 (1965).

has concluded, simply does not involve individual promises about

a bargaining-unit position.

In Caterpillar, several managerial employees were allegedly

promised that they could look forward to “indefinite and lasting

employment” with the corporation. Id. at 388-89. After they

were later downgraded to bargaining-unit positions*® and subse-

quently fired, they filed suit in state court, alleging, inter alia,

breach of these individual promises of job security. Id. at 389-90.

Caterpillar removed the action to federal court on the basis of

§ 301, and the Ninth Circuit, reversing the district court, con-

cluded that the claim did not “arise under” § 301, and was,

therefore, not pre-empted. Id. at 390-91.

This Court affirmed, concluding that simply because an

employer may raise as a defense to a state-law contract claim

a “federal question, even a § 301 question”, does not mean that

the claim is pre-empted by § 301. Jd. at 398. Applying the pre-

emption test of Allis-Chalmers Corp. v. Lueck, 471 U.S. 202

(1985) this Court noted that § 301 pre-emption results only when

resolution of a claim raised “on the face of the ... complaint”

will “substantially [depend upon an] analysis of [the] collective-

bargaining agreement.” Caterpillar, 482 U.S. at 392-97 (quoting

Electrical Workers v. Hechler, 481 U.S. 851, 859 n.3 (1987)). If

“(t]he heart of the [state-law] complaint [is] a . . . clause in the

collective bargaining agreement,” the Court agreed, the case

would be removable. Id. at 394 (quoting Avco Corp. v. Aero

Lodge No. 735, International Association of Machinists and

Aerospace Workers, 390 U.S. 557, 558, reh’g denied, 391 U.S.

929 (1968)).

On the facts before it, this Court concluded in Caterpillar

that the action was improperly removed, as the claims were

premised on individual employment contracts “independent”

of the bargaining agreement. Caterpillar, 482 U.S. at 395-97.

Accordingly, this Court implicitly upheld plaintiffs’ right to raise

* They were allegedly assured at the time that these downgrades were tem-

porary. Id. at 389.

state-law claims for breach of these individual promises, con-

cluding that those claims were not “substantially dependent” upon

interpretation of the collective-bargaining agreement, as “[plain-

tiffs] rely on contractual agreements made while they were in

managerial or weekly salaried positions — agreements in which

the collective-bargaining agreement played no part.” Id. at 395

& n.9 (emphasis added).

Relying upon Caterpillar, the Third Circuit reasoned that “not

all pre-employment contracts are subsumed by [a subsequent] col-

lective bargaining agreement,” and concluded that § 301 does not

preempt state-law contract claims premised on pre-employment

individual agreements that confer rights beyond those afforded

by a collective bargaining agreement, even though inconsistent

with its terms. (A-14-15) Applying the Lueck test, the Court of

Appeals, therefore, concluded that resolution of Berda’s state-law

contract claim is not “substantially dependent” upon an analysis

of his Collective Bargaining Agreement, as his claim is premised

on contract rights which are “independent” of the Collective

Bargaining Agreement, and which survive its terms. The court

similarly concluded that Berda’s tort claim was not pre-empted,

as he “was not required to refer to the collective bargaining agree-

ment in order to state his tort claim”, but “need only plead and

establish that [CBS] promised him that he would not be laid off

for a reasonable period of time [knowing] ... that ... CBS was

planning a reduction in force that would affect him” and show

reliance on that promise. (A-17) In its view, the fact

that the misrepresentations concerned layoffs and that

there was a provision of the collective bargaining agree-

ment that also related to layoffs are facts of no conse-

quence, because Berda need not refer to the provision

. in order to make out his claim.”

(A-18) (emphasis added).

For these reasons, the Third Circuit reversed the dismissal of

the Complaint and allowed respondents’ claims to proceed.°

* The Third Circuit did not reach CBS’ other arguments that Berda’s state-law

claims were precluded because they arguably presented unfair labor practices

(Footnote continued)

On August 3, 1989, the Third Circuit stayed the issuance of

its mandate, pending the filing of this petition.

REASONS FOR GRANTING THIS PETITION

This petition presents the Court with an opportunity to clarify

the pre-emptive ambit of § 30] and thereby resolve the conflict

in the Circuits over whether state-law claims arising from pre-

employment promises about a bargaining-unit position are pre-

empted by § 301.

Berda’s thesis is that (1) the alleged pre-existing individual con-

tract, made at a time when he was a shop steward at station

WPXI and about a prospective bargaining-unit position at CBS,

survived the Collective Bargaining Agreement and became a

co-existing contract during the relevant time period —

throughout his bargaining-unit employment and when the al-

legedly wrongful discharge occurred; and (2) that this individual

contract controlled the terms and conditions of his bargaining-

unit employment on matters of conflict. Accordingly, by these

alleged promises, despite the conflicting terms of an admitted-

ly applicable Collective Bargaining Agreement, and unlike all

other CBS bargairing-unit members, Berda claims a position

of privilege which would be prohibited by the Collective

Bargaining Agreement, and which allegedly completely in-

sulated him from any decision by CBS to reduce its work-force,

or effect any other type of layoff contemplated by the Collec-

tive Bargaining Agreement. By allowing Berda to pursue these

claims, the Third Circuit allows highly questionable state-law

theories to invade federally regulated conduct.

This decision, reflecting, as it does, the tension between in-

dividual rights and remedies under state-law and obligations

within the exclusive jurisdiction of the National Labor Relations Board (see

San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959)), or because

the individual contract conflicted with the principle of exclusive representa-

tion in § 9(a) of the National Labor Relations Act. See Machinists v. Wiscon-

sin Employment Relations Commission, 427 U.S. 132, 146 (1976). CBS raised

both of these arguments before the District Court, and urged them again on

appeal, but the Third Circuit declined to address them. (A-19-20)

under collective bargaining agreements, the breach of which

might constitute a violation of federal labor law, simply strays

too far from this Court’s, and, indeed, Congress’, efforts to

establish a uniform federal labor law in matters relating to the

interpretation of collective bargaining agreements.

The Third Circuit decision also sharpens the conflict in the

Circuits over the pre-emptive ambit of § 301 and actually in-

vites bargaining unit members to abandon the arbitral forum,

which forum best serves the mandate for the application of

uniform federal labor law. As a result, state courts may now

entertain a host of lawsuits brought by bargaining unit members

seeking to circumvent the strictures of their collective bargain-

ing agreements. More ominously, if the Third Circuit rule

prevails, employers may refuse to agree to grievance/arbitration

provisions in collective bargaining agreements, so as to create

a level playing field, knowing that an employee can easily cir-

cumvent any such provision by alleging the existence of an “in-

dependent” pre-employment agreement.

For these reasons, this Court should grant this petition, resolve

the conflict in the Circuits, and end this potential assault on

the collective bargaining process.

THERE IS A SHARP SPLIT IN THE CIRCUITS

OVER WHETHER THE PRE-EMPTIVE REACH

OF § 301 EXTENDS TO PRE-EMPLOYMENT

PROMISES ABOUT THE TERMS AND CONDI-

TIONS OF EMPLOYMENT IN A BARGAINING-

UNIT POSITION

A. Introduction

Section 301 of the LMRA, 29 U.S.C. § 185(a), confers federal

jurisdiction over

Suits for violation of contracts between an employer

and a labor organization representing employees in

an industry affecting commerce ...

This statute is both a jurisdictional grant and a mandate for

the development and application of federal substantive law. Tex-

tile Workers v. Lincoln Mills, 353 U.S. 448, 456 (1957). Section

301 represents a Congressional mandate for the courts to fashion

a uniform body of federal common law for the resolution of

disputes arising under collective bargaining agreements, “ac-

cording to the precepts of federal labor policy.” Teamsters Local

v. Lucas Flour Co., 369 U.S. 95, 103 (1962).° This body of federal

common law is “uniformly to prevail over inconsistent local

rules.” Id. at 104.

This Court has recognized that the “ordering and adjusting

of competing interests through a process of free and voluntary

collective bargaining is the keystone of the federal scheme to

promote industrial peace.” Id. State-law which frustrates the

effort of Congress to stimulate the smooth functioning of that

process “strikes at [its] very core ... .” Id.

For these reasons, when state-law is invoked to regulate ac-

tivities which are the subject of a collective bargaining agree-

ment, national labor policy requires that state law yield. Sec-

tion 301, therefore, pre-empts state-law claims directly based

on rights created by a collective bargaining agreement, as well

as claims that are “substantially dependent on analysis of a

collective-bargaining agreement.” Caterpillar, 482 U.S. at 394.

The judicially-created test for § 301 pre-emption provides that:

when 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, that

claim must either be treated as a § 301 claim

” This Court analyzed the pre-emptive effect of § 301 in Lucas Flour, which

involved an issue of contract interpretation: whether a collective bargaining

agreement implicitly prohibited a strike called by the union. The Washington

Supreme Court resolved this issue by applying state-law rules of construction.

This Court rejected that approach, and concluded that the claim must be

brought under § 301 and resolved by reference to federal law, in order to en-

sure uniform interpretation of collective bargaining agreements and, thus,

to promote the consistent resolution of labor/management disputes. Lucas

Flour, 369 U.S. at 102-106.

—

.. or dismissed as pre-empted by federal labor-contract law.

Lueck, 471 U.S. at 220 (emphasis added); see also Lingle v. Norge

Division of Magic Chef, Inc., 486 U.S. 399 (1988) (state law claim

pre-empted if it “requires the interpretation of a collective

bargaining agreement”)."

As seen below, there is a sharp split in the Circuits over

whether the pre-emptive reach of § 301 extends to pre-employ-

ment promises that conflict with the terms of a collective bar-

gaining agreement.

B. The Third Circuit Correctly Recognized That

This Case Raises A “Circuit-Splitting” Issue

The Third Circuit correctly recognized that-the Circuits have

split on the issue of whether the pre-emptive reach of § 301 ex-

tends to state-law claims arising from pre-employment promises.

Four other Circuits have now faced, and divided on, the issue

of whether pre-employment promises concerning the terms and

conditions of employment in a bargaining-unit position im-

plicate § 301. Compare Young v. Anthony’s Fish Grottos, Inc.,

" A logical corollary to the broad pre-emptive reach of § 301] is the rule

precluding bargaining-unit members from negotiating individual contracts

that are inconsistent with the terms of a collective bargaining agreement. J./.

Case Co. v. NLRB, 321 U.S. 332, 338 (1944); see also NLRB v. Allis-Chalmers

Manufacturing Co., 388 U.S. 175, 180, reh’g denied, 389 U.S. 892 (1967)

(national labor policy “extinguishes the individual employee's power tc order

his own relations with his employer and creates a power vested in the chosen

representative to act in the interests of all employees.”)

For this reason, individual contracts, “no matter what the circumstances that

justify their execution or what their terms, may not be. . .used to. . .limit or

condition the terms of the collective agreement. . .[or]. . .subtract from col-

lective ones. ...” J.J. Case, 321 U.S. at 337-39 (emphasis added).

Although J.J. Case, admittedly, did not involve § 301 pre-emption principles,

as discussed below, the District Court here, and the Fifth Circuit, have applied

the J.J. Case principles to § 301 claims.

830 F.2d 993 (9th Cir. 1987) (post-Caterpillar) and Eitmann v.

New Orleans Public Service, Inc., 730 F.2d 359 (5th Cir.) (pre-

Caterpillar), cert. denied, 469 U.S. 1018 (1984) with Varnum

v. Nu-Car Carriers, Inc., 804 F.2d 638, 640 (Lith Cir. 1986) (pre-

Caterpillar), cert. denied, 481 U.S. 1049 (1987) and Anderson

v. Ford Motor Co., 803 F.2d 953, 955-59 (8th Cir. 1986) (pre-

Caterpillar), cert. denied, 483 U.S. 1011 (1987).

Under the Ninth Circuit view, for example, the court will focus

on the nature of the job involved. If the pre-employment prom-

ise involves the terms and conditions of employment in a

bargaining-unit position, any state-law claims arising from those

promises will be pre-empted by § 301. In Young v. Anthony's

Fish Grottos, Inc., 830 F.2d 993 (9th Cir. 1987), plaintiff was

allegedly promised at the time of hire that she could be dis-

charged only for just cause. Jd. at 996. Her position, however,

was governed by a collective bargaining agreement, which pro-

vided that during an employee's 30-day probationary period,

the employee could be discharged at will. Plaintiff was fired

after one day on the job, and brought suit asserting state-law

claims for, inter alia, breach of this individual promise and

misrepresentation. Id.

The Ninth Circuit, reaffirming its holding in Bale v. General

Telephone Co., 795 F.2d 775, 779-80 (9th Cir. 1986)" rejected

Young’s argument that her “individual” contract was

" In Bale, decided pre-Caterpillar, plaintiffs contended that they were told

at the time of hire that after six months they would no longer be considered

“temporary” employees as defined by the collective bargaining agreement,

but rather would be accorded regular employee status. Subsequently, however,

when several regular employees returned from leaves of absence, plaintiffs were

discharged. Bale, 795 F.2d at 777.

The Ninth Circuit held that plaintiffs’ state-law tort claims were not “suffi-

ciently removed from the collective bargaining agreement to fall outside the

preemptive ambit of section 301,” reasoning that adjudication of plaintiffs’

tort claims “would require reference to, and interpretation of, the terms of

the collective bargaining agreement.” Jd. at 779-80.

taser aerate

independent of the collective bargaining agreement." reason-

ing as follows:

The subject matter of her contract, however, is a job

position covered by the [collective bargaining agree-

ment]. Because any “independent agreement of em-

ployment [concerning that job position] could be

effective only as part of the collective bargaining

agreement,” the [collective bargaining agreement]

controls and the contract claim is preempted.”

Young, 830 F.2d at 997-98.

In so holding, the Ninth Circuit distinguished this Court's

decision in Caterpiliar, concluding that that decision merely

holds that “a breach of contract claim concerning a job not

governed by a collective agreement could be effective indepen-

dent of the agreement and is therefore not completely pre-

empted.” Jd. (emphasis added)"

Prior to Caterpillar, the Fifth Circuit similarly held that § 301

pre-empts pre-employment individual promises about a

* The Ninth Circuit explicitly rejected the contrary holding of the Eighth Cir-

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

infra at pp. 16-17. Young, 830 F.2d at 997 n. 1.

“ The Young court also concluded that the tort claims were pre-empted as

well, as they were inextricably intertwined with the terms of the Collective

Bargaining Agreement. Jd. at 999-1002.

's This view is shared by the commentators, who have uniformly concluded

that Caterpillar does not apply to pre-employment individual promises about

a bargaining-unit position. See, e.g., Yonover, Preemption of State Tort

Remedies for Wrongfull Discharge in the Aftermath of Lingle v. Norge: Wholly

Independent or Inextricably Intertwined?, 34 S.D.L. Rev. 63, 88 n. 22

(1989) (noting split in Circuits on issue of § 301 pre-emption of state-law claims

based on “fraudulent misrepresentation allegedly made before there was a

collective bargaining agreement” and observing that Caterpiliar “did not

directly resolve this split”) (citing State Labor Law Developments, 4 The Lab.

Law. 349, 355-56 (1988) (Committee Reports Issue)); see also 18A Business

Organizations, Kheel, Labor Law (MB) § 9.05[6](August 1989).

bargaining-unit position. In Eitmann v. New Orleans Public

Service, Inc., 730 F.2d 359, 360 (5th Cir. 1984), a former

employee brought suit for breach of an alleged pre-employment

individual promise that he would “receive full compensation [for

work-related injuries] during any period of total or partial

disability, or until retirement.” After a period of disability, plain-

tiff was discharged because of his inability to work, in accord-

ance with the provisions of his collective bargaining agreement,

and subsequently sued on this individual promise.

The Fifth Circuit determined that the alleged “independent”

contract was tantamount to a contract for lifetime employment.

Applying federal substantive law, the Fifth Circuit concluded

that Eitmann’s claim was subsumed into and pre-empted by the

collective bargaining agreement, as it attempted to “limit or con-

dition” the terms and conditions of his employment set forth

in the collective bargaining agreement, including the discharge

provisions. Id. at 362-63, relying upon J.J. Case.

In reaching this conclusion, the Fifth Circuit deemed inap-

posite this Court’s holding in Belknap, Inc. v. Hale, 463 U.S.

491 (1983), where this Court recognized the right of strike

replacements, who were discharged when strikers returned, to

bring a state-law breach of contract action based on promises

of permanent employment. Belknap was not persuasive, the Fifth

Circuit reasoned, because the Belknap plaintiffs were not covered

by a collective bargaining agreement and “sought relief that

[§ 301] did not afford them.” Eitmann, 730 F.2d at 364. The

claims were, therefore, “of only peripheral concern” to federal

labor law. Belknap, 463 U.S. at 498. For these reasons, the Fifth

Circuit held Eitmann’s claims pre-empted, noting that “[t]o hold

otherwise ... would frustrate the policy of the federal labor

laws.” Eitmann, 730 F.2d at 364.

Other Circuits to face the issue have reached the opposite con-

clusion, focusing solely on the timing of the alleged representa-

tions. In their view, if representations are made to an individual

before he joins a bargaining-unit, § 301 will not be implicated

at all, even if those representations concern the terms and

secieeeniaieninaeieimeaenataeiemenille

conditions of his employment in a bargaining-unit position. For

example, in Varnum v. Nu-Car Carriers, Inc., 804 F.2d 638 (11th

Cir. 1986), plaintiff was allegedly induced to accept employ-

ment by misrepresentations that work was allocated on a “first-

in-first-out” basis, which would provide equal work oppor-

tunities to truckers, regardless of seniority. Shortly after plain-

tiffs employment began, his employer implemented a seniority-

based dispatch system, in accordance with a collective bargain-

ing agreement. Id. at 639.

The Eleventh Circuit allowed the state-law fraud claim to

proceed, reasoning that the claim “did not go to a term of

employment covered by the collective bargaining agreement.”

As “the complaint focused on conduct that occurred prior to

the plaintiff's accepting employment, the case is ... not pre-

empted by Section 301.” Id. at 640." In so holding, the Eleventh

Circuit deemed Belknap persuasive, despite the differences in

the plaintiff's statuses, i.e., Varnum became a bargaining-unit

member subject to the terms of a collective bargaining

agreement.

To the same effect is the rule in the Eighth Circuit. In Ander-

son v. Ford Motor Co., 803 F.2d 953, 954-55 (8th Cir. 1986),

plaintiffs had been laid off, then re-hired, only to be “bumped”

from jobs by employees on a preferential hiring list, in accord-

ance with a collective bargaining agreement. Plaintiffs were con-

sidered “new hires” because their “recall rights” under the col-

lective bargaining agreement had expired.

” The court distinguished the contrary holding of Eitmann, which is discussed

above at page 15, mistakenly concluding that Eitmann did not involve pre-

employment promises. Varnum, 804 F.2d at 640

A different panel of the Eleventh Circuit, however, has held that state-law

claims premised on representations of job security to one already an “employee”

under a collective bargaining agreement will be pre-empted, distinguishing

Caterpillar on this basis. Darden v. United States Steel Corp., 830 F.2d 1116,

1118-20 (11th Cir. 1987) (state-law claims pre-empted where premised on “in-

dependent” promises of job security to employee on “layoff status,” who was

later allegedly induced to take job by representations that employer had enough

work to guarantee him employment for ten years).

| memeaenneasen

A divided panel of the Eighth Circuit, observing that the

claims before it “closely resemble those considered in Belknap”,

concluded that the state-law contract claims were not pre-

empted, as they were premised on promises that were made

“before ... they were even covered by the collective bargaining

agreement.” Id. at 958.” The court similarly concluded that res-

olution of the fraud claim would not substantially depend upon

any analysis of the agreement: “proof of fraud does not depend

on the existence of any contractual relationship, nor do the stan-

dards for judging fraudulent misconduct derive from any

contractually-established expectations of the parties.” Id. at 957.

Accordingly, there is a sharp split in the Circuits over whether

pre-employment individual promises about a bargaining-unit

position implicate § 301. The Ninth and Third Circuits now also

diverge on whether this Court’s decision in Caterpillar controls

this issue. The confusion in the Circuits over the proper scope

of this Court’s § 301 pre-emption teachings is also underscored

by the fact that this Court’s earlier decision in Belknap, deemed

inapposite by the Fifth Circuit in Eitmann, was deemed con-

trolling by the Eleventh Circuit in Varnum and the Eighth Cir-

cuit in Anderson, even though those courts were all faced with

cases involving pre-employment promises about the terms and

conditions of employment in a bargaining-unit position.

For these reasons, this Court should grant this petition and

guide the Circuits on the proper pre-emptive reach of § 301.

See Supreme Court Rule 17.1(a). As seen below, the rule adopted

by the Third Circuit also threatens to undermine the integrity

of the collective bargaining process.”

" The court cited, but rejected, the contrary holding of the Ninth Circuit in

Bale, discussed above at note 12. Anderson, 803 F.2d at 958. The dissent would

have followed Bale and argued that the case should be seen as tantamount

to a misrepresentation about the terms of the collective bargaining agreement,

which would mean, therefore, that resolution of the state-law claims could

not be divorced from an analysis of the collective bargaining agreement. Jd.

at 960 (Bright, J., dissenting).

” If this petition is granted, CBS will argue on the merits that the Third Cir-

cuit misread Caterpillar and erred in its application of the Lueck test. For

(Footnote continued)

Il.

A RULE ALLOWING STATE-LAW CLAIMS TO PRO-

CEED ON THESE FACTS WILL INVITE

BARGAINING-UNIT MEMBERS TO ABANDON

THE ARBITRAL FORUM, WHICH FORUM BEST

SERVES THE MANDATE FOR THE DEVELOP.

MENT AND APPLICATION OF FEDERAL LAW

Paralleling the development of this Court’s pre-emption prin-

ciples has been the Court’s recognition that the grievance-

arbitration provisions of collective bargaining agreements are

particularly sacrosanct. The need to “preserve the effectiveness

of [private] arbitration” as a means of achieving industrial peace

“was one of the central reasons that underlay the Court’s holding

in Lucas Flour.” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,

example, before a court can reach the merits of Berda’s individual contract

claim, it must first determine whether § 1.01 supersedes and precludes en-

forcement of the alleged individual promise, a determination which would

substantially depend upon an analysis of the Agreement. See Section 1.01 (“Any

changes, supplements or amendments made during the term of this Agree-

ment must be reduced to writing. . .[and] signed by the parties. . ”.) (A-27)

Secondly, the Third Circuit erred in dismissing CBS’ argument that J.]. Case

precludes enforcement of the alleged pre-employment individual promises of

job security as, plainly, no claim could be more inconsistent with the terms

of the Collective Bargaining Agreement, which contains specific provisions

relating to lay-offs (§ 5.03) and seniority (§ 5.02). (A-30-31) Thirdly, the alleged

representation by CBS is tantamount to a misrepresentation about the job

security he would enjoy in a bargaining-unit position. Or, more simply, it was

a misrepresentation about the terms and conditions of the Collective Bargaining

Agreement, resolution of which turns on an analysis of the lay-off and discharge

provisions of the Collective Bargaining Agreement. To state a claim for

misrepresentation under Pennsylvania law, moreover, Berda would have to

show “justifiable” reliance on these representations of job security, which were

contrary to the terms of the Collective Bargaining Agreement. See Scaife Co.

v. Rockwell-Standard Corp., 446 Pa. 280, 284-285, 285 A.2d 451, 454 (1971),

cert. denied, 407 U.S. 920 (1972). Resolution of this reliance issue would,

therefore, involve the court in an analysis of the terms of the Collective Bargain-

ing Agreement, as Berda, who served as a shop steward in his previous employ-

ment, would have to offer evidence of his pre-hire lack of knowledge of the

terms and conditions of the Collective Bargaining Agreement, and the legal

effect of those provisions.

219 (1985). Indeed, Congress has expressly approved of contract

grievance procedures as a preferred method of settling labor

disputes. See Section 203(d) of the LMRA, 29 U.S.C. 173(d)

(“[f]inal adjustment by a method agreed upon by the parties

is declared to be the desirable method for settlement of grievance

disputes arising over the application or interpretation of an ex-

isting collective-bargaining agreement. ”) A federal common law

must, therefore, be developed under § 30] to ensure specific per-

formance of arbitration clauses in collective bargaining

agreements, because Congress intended § 301 to be the

mechanism for labor peace and “[p]lainly, the agreement to ar-

bitrate grievance disputes is the quid pro quo for an agreement

not to strike.” Textile Workers v. Lincoln Mills, 353 U.S. 448,

455 (1957).

Therefore, since the Steelworkers trilogy decisions in 1960”

the Court has stressed that the express policy of the LMRA “can

be effectuated only if the means chosen by the parties for set-

tlement of their differences under a collective bargaining agree-

ment is given full play.” United Steelworkers of America v.

American Manufacturing Co., 363 U.S. 564, 566 (1960).

To permit this “full play,” an order to arbitrate a dispute cannot

be denied unless it is clear that the arbitration provision can-

not be interpreted to cover the dispute. United Steelworkers of

America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83

(1960). A rule that “permit[s] an individual to sidestep available

grievance procedures would cause arbitration to lose most of

its effectiveness,” as well as “eviscerate a central tenet of federal

labor-contract law under § 301 that it is the arbitrator, not the

court, who has the responsibility to interpret the labor contract

in the first instance.” Lueck, 471 U.S. at 220 (citation omitted);

see also Republic Steel Corp. v. Maddox, 379 U.S. 650, 653 (1965)

(warning against creating exceptions to the requirement that

bargaining-unit members be required to resort to the grievance

* United Steelworkers of America v. American Manufacturing Co., 363 U.S.

564 (1960); United Steelworkers of America v. Warrior & Gulf Navigation

Co., 363 U.S. 574 (1960); United Steelworkers of America v. Enterprise Wheel

and Car Corp., 363 U.S. 593 (1960).

and arbitration provisions of their contract); Warrior & Gulf

Navigation, 363 U.S. at 578 (arbitral process is the alternative

to economic warfare).

The Third Circuit rule promises to do violence to these in-

terests, as it invites bargaining-unit members to abandon the

arbitral forum, which forum best serves the mandate for the

development and application of uniform federal labor law to

labor-management disputes. If this rule prevails, a bargaining-

unit employee who wishes to challenge his discharge, or, poten-

tially, any other term or condition of his employment, need on-

ly plead the existence of a pre-employment individual agree-

ment. Those allegations will be sufficient to avoid the grievance

and arbitration strictures of his collective agreement, and defeat

§ 301 pre-emption. This will result even where, as here, the in-

dividual agreement squarely conflicts with the terms of a col-

lective bargaining agreement. The Eleventh Circuit in Varnum

voiced these same concerns, acknowledging that its decision

allowing state-law claims to proceed might be “construed to open

the floodgates to a myriad of state law actions... .” Varnum,

804 F.2d at 643 (Hoffman, J., concurring).

This action is tangible proof that the court’s fear was well-

founded. The Third Circuit rule will now mean that whenever

an employer discusses the terms or conditions of employment

with a prospective bargaining-unit employee, it risks exposing

itself to a state court lawsuit arising from those representations.

As a result, courts may now entertain a host of wrongful

discharge lawsuits brought by bargaining-unit members seek-

ing to avoid the arbitral forum provided by their collective

bargaining agreements.”

* The sheer number of recent cases struggling with the issue of whether § 30]

pre-empts “independent” contracts shows that Caterpillar has not provided

clear guidance on this issue. See, e.g., Ulrich v. Goodyear Tire & Rubber Co.,

F.2d 132 L.R.R.M. 232] (6th Cir. September 8, 1989) (state-law

claims premised on individual promises of job securitiy following reorganiza-

tion pre-empted by § 301); Wells v. General Motors Corp., 881 F.2d 166 (5th

Cir. 1989)(§ 301 does not pre-empt state-law fraud claims arising from “separa-

tion agreement” by which employees would receive severance payment in lieu

(Footnote continued)

More ominously, if the Third Circuit rule prevails, employers

may refuse to agree to grievance/arbitration provisions in col-

lective bargaining agreements at all, so as to create a level playing

field, knowing that an employee can easily circumvent any such

provision by alleging the existence of an “independent” pre-

employment agreement. cf. Lucas Flour, 369 U.S. at 104 (the

“existence of possibly conflicting legal concepts might substan-

tially impede the parties’ willingness to agree to contract terms

providing for final arbitral ... resolution of disputes.”)

Secondly, the rule urged by CBS is both logical and fair on

these facts. It is not unreasonable or unfair to charge a prospec-

tive bargaining-unit employee with knowledge that the terms

and conditions of his employment will be dictated solely by his

collective bargaining agreement. This argument is even more

compelling here. Prior to his employment by CBS, Berda was

a shop steward with the local union at television WPXI, and

cannot, and does not, claim unfamiliarity with the nature of

the collective bargaining process. Berda knew he was accepting

a bargaining-unit position and should be charged with the

knowledge that the terms and conditions of his employment by

CBS would be reflected in the Collective Bargaining Agree-

ment.”

of preserving seniority and rehire rights); Vacca v. Viacom Broadcasting of

Missouri, Inc., 875 F.2d 1337 (8th Cir. 1989)(state-law claims by union member

against successor employer for violation of allegedly “separate” agreement to

pay law school tuition pre-empted by § 301); DeLapp v. Continental Can Co.,

868 F.2d 1073 (9th Cir. 1989)(state-law contract claim pre-empted by § 301

where employee argued employer orally promised not to enforce recall provi-

sion of collective bargaining agreement so as to preserve early pension benefits);

Miller v. Fairchild Industries, Inc., 668 F. Supp. 461 (D. Md. 1987)(§ 301 does

not pre-empt state-law fraud and misrepresentation claims premised on pro-

mises of job security).

* Notwithstanding the arguments raised by respondents below, the rule of

pre-emption urged by petitioner will not give employers a license to deceive

prospective employees. The conduct alleged by respondents, as even the court

below acknowledged, could constitute an unfair labor practice, which will

act as a powerful deterrent to employers bent on such a course of deception.

(Footnote continued)

Finally, the Third Circuit rule also threatens to disrupt in-

dustrial peace. This Court has recognized that the “ordering and

adjusting of competing interests through a process of free and_

voluntary collective bargaining is the keystone of the federal

scheme to promote industrial peace.” Lucas Flour, 369 U.S. at

104; see also J.I. Case Co. v. NLRB, 321 U.S. 332, 338 (1944)

(the “very purpose” of the cellective bargaining process is to

“supersede the terms of separate agreements of employees with

terms which reflect the strength and bargaining power and serve

the welfare of the group.”) State-law which frustrates the ef-

fort of Congress to stimulate the smooth functioning of that pro-

cess “strikes at [its] very core.” Lucas Flour, 369 U.S. at 104.

On the facts of Caterpillar, a rule against pre-emption of the

individual contract involved there did no violence to these federal

interests, as the individual promises there concerned managerial

positions outside the scope of a collective bargaining agreement.

482 U.S at 388, 395 n. 9. Here, however, Berda premises his

claims against CBS on individual promises about the terms and

conditions of employment in a bargaining-unit position, prom-

ises that offer more protection than the Collective Bargaining

Agreement, and, in fact, are in complete conflict with the Col-

lective Bargaining Agreement. As this Court has cautioned, the

“practice and philosphy of collective bargaining looks with suspi-

cion on such individual advantages,” because of their potential

to disrupt industrial peace. J.J. Case Co., 321 U.S. at 338. That

is because individual gain is “often earned at the cost of break-

ing down some other standard thought to be for the welfare of

the group, and always creates the suspicion of being paid at the

long-range expense of the group as a whole.” Id. at 338-39. See

also Caterpillar, 482 U.S. at 396.

The practical effect of such a rule is not difficult to envision.

For example, if CBS had not discharged Berda because of the

alleged individual promises, to meet its reduction in force goals

(A-19-20) See also Caterpillar, 482 U.S. at 397 (noting that its holding did not

preclude the parties from questioning the “legality or viability” of the in-

dividual contracts as an unfair labor practice.)

Cee ee oe eo ee

CBS would, potentially, have been forced to lay-off another

bargaining-unit member with more seniority, who otherwise

would not have been subject to lay-off under § 5.03 of the Col-

lective Bargaining Agreement. At the very least, that bargaining-

unit member would then presumably grieve his lay-off under

the Collective Bargaining Agreement, with an uncertain result.

The rule adopted by the court below will, therefore, inevitably

undermine the integrity of the collective bargaining process.

CONCLUSION

Pre-ernption of state-law claims under § 301 serves to pro-

tect the federal labor law scheme from erosion by courts intent

on vindicating state-law rights. The decision of the Third Cir-

cuit, if left undisturbed, heralds a significant departure from

this goal and invites future litigants to seek ways to skirt the

arbitral forum, which lies at the heart of the collective bargain-

ing process. Accordingly, petitioner CBS Inc. respectfully re-

quests that this Court grant this petition in order to review the

decision below and thereby provide guidance to the Circuits on

the proper pre-emptive reach of § 301.

Dated: October 16, 1989

Respectfully submitted,

Douc.tas P. Jacoss*

HELEN M. Gop

ANTHONY M. BONGIORNO

CBS Inc.

51 West 52nd Street

New York, New York 10019

(212) 975-3031

Of Counsel:

ARTHUR J. SCHWAB

Mark A. FONTANA

REED SMITH SHAW & McC.ay

435 Sixth Avenue

Pittsburgh, PA 15219

(412) 288-3112

Attorneys for Petitioner

CBS Inc.

* Counsel of record

: APPENDIX

(Sal

APPENDIX INDEX

Page

Third Circuit Opinion, July 20, 1989 ........... A-1]

Third Circuit Notice of Judgment, July 20, 1989 . A-21

District Court Memorandum Opinion, June 15,

AE ane a ACIER. eo aa Ore here ener nae A-22

District Court Order, June 15, 1988 ............ A-26

Excerpts from Collective Bargaining Agreement

between CBS Inc. and International

Brotherhood of Electrical Workers............ A-27

A-1

Filed: July 20, 1989

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 88-3405

MARTIN W. BERDA, and

LINDA BERDA, his wife,

Appellants

CBS INC., a corporation,

Appellees

On Appeal From the United States District Court

for the Western District of Pennsylvania

(D.C. Civil No. 88-0411)

Argued: November 1, 1988

Before: GIBBONS, Chief Judge.

BECKER and WEIS.

Circutt Judges

(Filed July 20, 1989)

JOSEPH J. HINCHLIFFE (Argued)

Tarasi and Johnson, P.C.

510 Third Avenue

Pittsburgh, PA 15219

Attorney for Appellant

A-2

ARTHUR J. SCHWAB (Argued)

Reed, Smith, Shaw & McClay

435 Sixth Avenue

Pittsburgh, PA 15219-1886

HELEN M. GOLD

CBS Inc.

51 West 52nd Street

New York, NY 10019

Attorneys for Appellee

OPINION OF THE COURT

BECKER, Circutt Judge.

This case involves the circuit-splitting question

whether state contract and tort claims for monetary

relief brought by a bargaining unit employee against

his employer based upon alleged misrepresentations

of job security, made before the employee became a

member of the bargaining unit, thereby conferring

additional rights to those afforded by the collective

bargaining agreement, are preempted by section 301

of the Labor Management Relations Act (“LMRA”), 29

U.S.C. 8 185(a) (1982).

Appellant Martin Berda (“Berda”) brought this

suit against his former employer, appellee CBS Inc.

(“CBS”), asserting two contract claims (breach of an

individual employment contract and promissory

estoppel) and two tort claims (fraud and negligent

misrepresentation). Appellant Linda Berda, Berda’s

wife, asserts a derivative claim for loss of consortium.

All of the claims are founded upon Pennsylvania law,

and the Berdas seek only monetary relief. CBS

A-3

contends that since Berda’s employment with CBS

was governed by the terms and conditions of a

collective bargaining agreement between CBS and the

International Brotherhood of Electrical Workers

(“IBEW”) - a contention not disputed by Berda - the

state law claims are preempted by the LMRA.

The district court concluded that resolution of

Berda’s claims was dependent upon the collective

bargaining agreement, that the alleged oral contract

was inconsistent with the collective agreement, and

that the claims were therefore preempted by section

301. Consequently, the court granted CBS’s motion

for judgment on the pleadings or, in the alternative,

for summary judgment inasmuch as the complaint

was not filed within the six-month statute of

limitations applicable to actions arising under section

301. Because we believe that Berda can establish the

allegations in his well-pleaded complaint without

asking the court to analyze the collective bargaining

agreement, we will reverse and remand to the district

court for further proceedings.

The facts relevant to this appeal are essentially

uncontested. On February 27, 1986, while employed

as a technician by station WPXI in Pittsburgh, Berda

met with Emil Franks and M. Lynwood Heighes, Jr.,

employees of CBS, to discuss his possible future

employment with CBS in Washington, D.C. According

to the complaint, Berda was told at this meeting.

among other things, that he would be guaranteed

employment with CBS for the reasonably foreseeable

future, and that any job offered to him would not be

seasonal or temporary but would be a permanent

position. CBS subsequently offered Berda employment

in Washington, D.C., and, in April 1986, allegedly

relying upon CBS's promises, Berda and his wife

A-4

moved to Washington so that he could assume his

duties as a CBS technician there.

Shortly after commencing work at CBS, Berda

joined the IBEW. The parties agree that Berda's

employment at CBS was covered by the terms and

conditions of a collective bargaining agreement

between CBS and the IBEW. Section 5.03 of that

agreement pertains to layoffs, and provides in

pertinent part that:

{(llayoffs caused by a reduction of staff shall be

made in the inverse order of seniority within each

of the separate units as defined in Section 5.02

within the jurisdiction of each local union... .

Section 5.02 of the collective bargaining agreement

contains the provisions relating to seniority of all

employees covered by the agreement.

On August 29, 1986, less than five months after

he began working for CBS, and in accordance with

the terms of the collective bargaining agreement,

Berda was laid off as part of a company-wide

reduction in force. Berda alleges that CBS had decided

prior to the February 27 meeting with him to conduct

extensive layoffs in the department and division of

CBS in which he was eventually offered employment,

and hence that Frank and Heighes knew or should

have known that their promises and representations

to him were false.

On January 19, 1988, Berda filed a complaint in

the Court of Common Pleas of Allegheny County.

alleging breach of contract (or, alternatively,

promissory estoppel) and tortious misrepresentation.

The complaint did not refer to the collective

bargaining agreement. CBS removed the case to the

district court for the Western District of Pennsylvania

alleging both federal question jurisdiction, on the

ground that the suit was preempted by section 301 of

A-5

the LMRA, and thus, if it stated any cause of action, it

stated one under section 301, see Avuco Corp. v.

Machinists, 390 U.S. 557, 558 (1968),' and diversity

jurisdiction.? CBS then moved for judgment on the

pleadings or summary judgment.

The district court held that any resolution of the

state law claims was substantially dependent upon an

analysis of section 5.03 of the collective bargaining

agreement between CBS and the IBEW and that

Berda’'s alleged individual contract was “inconsistent

with section 5.03 ... and would limit or condition its

terms.” Dist. Ct. Op. at 5 (June 21, 1988). It therefore

held that the claims were preempted by section 301 of

the LMRA. Finding that the Berdas could not

1. Ordinarily, a complaint cannot be removed to federal court,

pursuant to the court's federal question jurisdiction, unless the

complaint on its face states a federal claim. However, the Supreme

Court has found that in certain instances the preemptive force of

federal law is so “powerful as to displace entirely any state cause of

action.” Franchise Tax Bd. v. Construction Laborers Vacation

Trust for Southern Cal., 463 U.S. 1, 23 (1983). In such instances,

federal law is said to “completely preempt” state law, and removal

is permitted because, although pled as a state claim, the claim is

actually considered to arise under the federal law that displaces

the state law. Id. at 24.

Section 301 of the LMRA is one such instance of

complete preemption; it displaces entirely “any state cause of

action ‘for violation of contracts between an employer and a labor

organization.’” Id. at 23 (citing Avco, 390 U.S. at 560). Thus, in

Avco and subsequent cases, courts have allowed the defendant to

remove state contract lawsuits when the suits were preempted by

section 301 of the LMRA, even though the plaintiffs had not pled

LMRA claims, because such complaints are considered to state a

claim, if any, under section 301 of the LMRA. See Allis-Chalmers

Corp. v. Lueck, 471 U.S. 202, 220 (1985).

2. Because the case was properly removed on the basis of

diversity jurisdiction. even though. as discussed below. we find

that the suit was not preempted by section 301. the case will

remain in federal court.

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maintain the suit as an LMRA action because it was

not filed within the LMRA’s six-month statute of

limitations, see DelCostello v. Teamsters, 462 U.S.

151, 169-72 (1983) (applying six-month statute of

limitation in a section 301 cause of action), the

district court dismissed the action. The Berdas

appeal. The issue before us is whether the district

court was correct in concluding that Berda could

bring suit, if at all, only pursuant to section 301.°

Il.

Section 30l(a) of the Labor Management

Relations Act provides as follows:

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, without

respect to the amount in controversy or without

regard to the citizenship of the parties.

29 U.S.C. § 185(a). On its face, this statute provides

for federal jurisdiction over controversies involving

collective bargaining agreements. However, the

Supreme Court has concluded that section 301 also

expresses a congressional intent that the federal

courts develop a federal common law to be applied in

suits for enforcement of collective bargaining

3. Our standard of review in an appeal! from a grant of

summary judgment is plenary. See Joseph v. Hess Oil, 867 F.2d

179, 181 (3d Cir. 1989). We must view the facts in the light most

favorable to the party against whom judgment is sought and draw

all reasonable inferences in favor of the non-moving party. In

order to affirm, we must conclude that there are no genuine

issues of material fact. and that the movant is entitled to

judgment as a matter of law. Fed. R. Civ. P. 56.

A-7

agreements. See Textile Workers v. Lincoln Mills, 353

U.S. 448, 451 (1957).

When a suit stating a claim under section 301 is

brought, state contract law is displaced, and the

collective agreement is interpreted under this federal

common law. See Teamsters v. Lucas Flour Co., 369

U.S. 95 (1962). The purpose of preempting state

contract law with a uniform federal law is to allow

parties to collective bargaining agreements to have

some certainty as to the way that the agreement will

be construed by courts. As the Supreme Court

explained:

[T]he subject matter of § 301(a) “is peculiarly one

that calls for uniform law.” ... The possibility that

individual contract terms might have different

meanings under state and federal law would

inevitably exert a disruptive influence upon both

the negotiation and administration of collective

agreements. Because neither party could be

certain of the rights which it had obtained or

conceded, the process of negotiating an

agreement would be made immeasurably more

difficult by the necessity of trying to formulate

contract provisions in such a way as to contain

the same meaning under two or more systems of

law which might some day be invoked in

enforcing the contract.

Id. at 103 (citation omitted). Lack of certainty as to

the meaning of contract terms could lead to lack of

agreement; thus, if state laws were not preempted,

industrial peace would be threatened. Id. at 104.

The Supreme Court has also held that section 301

preemption extends beyond contract claims and

reaches certain claims sounding in tort. See

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211

(1985). In Lueck, the Court noted that if section 301

A-8

were held not to preempt state tort law, it “would

elevate form over substance and allow parties to evade

the requirements of § 301 by relabeling their contract

claims as claims for tortious breach of contract.” Id. at

211. Thus, the Court adopted the following rule:

“when 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, the claim must either be treated as a § 301

claim ... or dismissed as pre-empted by federal

labor-contract law.” Id. at 220 (citation omitted)

(emphasis added). See also International

Brotherhood of Electrical Workers v. Hechler, 107 S.

Ct. 2161 (1987) (claim that union breached duty of

care to ensure safety of workplace preempted by § 301

because substantially dependent on whether under

the collective bargaining agreement the union had

assumed this duty).

However, the Supreme Court has made it clear

that “not every dispute concerning employment, or

tangentially involving a _ provision of a

collective-bargaining agreement, is pre-empted by

8 301.” Lueck, 471 U.S. at 211. In Lingle v. Norge

Div. of Magic Chef, Inc., 108 S. Ct. 1877 (1988), the

Court held that section 301 did not preempt a state

law tort claim for retaliatory discharge, even though

the collective bargaining agreement governing the

employment provided for arbitral adjudication of an

employee's claim that she was fired without just

cause. The Court reasoned that in order to prevail on

her retaliatory discharge claim she need not ask a

court to interpret the collective bargaining agreement.

It found that

even if dispute resolution pursuant to a

collective-bargaining agreement, on the one hand,

and state law, on the other. would require

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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

preemption purposes.

Id. at 1883.

Finally, and, most importantly, in Caterpillar,

Inc. v. Williams, 107 S. Ct. 2425 (1987), the Court

held that section 301 did not preempt a state contract

law suit in which plaintiffs, who were union

members, alleged that their employer breached

individual oral employment agreements that promised

them “‘indefinite and lasting employment,’” and

pre-dated their joining the union. 107 S. Ct. at 2427

(citation omitted). The plaintiffs in Caterpillar had

been non-union employees of the company at the time

the initial alleged promises were made. They were

later downgraded to bargaining unit positions, but

alleged that they were promised at the time that the

downgrades were temporary. Id. at 2428. Plaintiffs

were subsequently laid off from their bargaining unit

positions, and brought suit in state court alleging

that their employer had breached the oral agreements

in violation of state contract law. The Supreme Court,

applying the Lueck test, upheld the plaintiffs’ right to

bring a state contract claim, finding that their

“complaint is not substantially dependent upon

interpretation of the collective-bargaining agreement.

It does not rely upon the collective agreement

indirectly, nor does it address the relationship

between the individual contracts and the collective

agreement.” Id. at 2431.

Furthermore, the Court in Caterpillar held that

the fact that as part of a defense of a state law contract

claim an employer might raise “a federal question,

even a § 301 question” does not mean that the claim

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is preempted by section 301. Id. at 2433. The

preemption of state law engendered by section 301 is

only occasioned when the claim raised “on the face of

the complaint” substantially depends on

interpretation of a collective bargaining agreement for

its resolution. Id.

In Caterpillar, the Court also revisited its decision

in J.I. Case Co. v. NLRB, 321 U.S. 332 (1944). J.I.

Case dealt with the issue of when an employer could

have separate individual agreements with unionized

employees and when such agreements are subsumed

by the collective bargaining agreement such that they

can have no independent legal effect. It held that

employers and employees could not maintain

individual agreements that give an employee less than

the employee would be given under the collective

bargaining agreement. Id. 321 U.S. at 336. To this

end, the Court stated that,

[iJndividual contracts, no matter what the

circumstances that justify their execution or what

their terms, may not be availed of to defeat or

delay the procedures prescribed by the National

Labor Relations Act looking to collective

bargaining, nor to exclude the contracting

employee from a duly ascertained bargaining unit;

nor may they be used to forestall bargaining or to

limit or condition the terms of the collective

agreement.

Id. at 337.

However J.J. Case did not adopt a blanket rule

prohibiting individual contracts with bargaining unit

members. The Court stated that employers and

employees may enter individual contracts that

“embody matters not necessarily included within the

statutory scope of collective bargaining.” to the extent

that such contracts are “not inconsistent with a

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collective agreement or do{] not amount to or result

from or [are] not part of an unfair labor practice.” Id.

at 339. And, most important for the instant case, J.I.

Case specifically did not hold that individual

contracts more advantageous to the employee than

the collective agreement are subsumed by the

collective agreement. Although acknowledging that

such individual contracts can be “disruptive of

industrial peace,” id. at 338, the Court declared that,

individual contracts cannot subtract from

collective ones, and whether under some

circumstances they may add to them in matters

covered by the collective bargain, we leave to be

determined by appropriate forums under the law

of contracts applicable, and to the Labor Board if

they constitute unfair labor practices.

Id. at 339.

Relying on this language from J.I. Case, the

Caterpillar Court réjected the employer's claim that

the collective bargaining agreement subsumed the

employees’ earlier oral contracts for long-term

employment which gave them more rights than the

collective agreement did. It stated that “individual

employment contracts are not inevitably superseded

by any subsequent collective agreement covering an

individual employee, and claims based upon them

may arise under state law.” 107 S. Ct. at 2431. And it

explained that the employer's basic error was “its

failure to recognize that [an employee) covered by a

coliective-bargaining agreement is permitted to assert

legal rights independent of that agreement, including

state-law contract rights. so long as the contract relied

upon is not a collective bargaining agreement.” /d. at

2431-32.

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It is undisputed that Berda’s employment with

CBS was governed by the terms and conditions of the

collective bargaining agreement between CBS and the

IBEW. However, Berda contends that his contract,

promissory estoppel, and tort claims can be resolved

‘independently of the collective bargaining agreement.

He asserts that a court, in addressing these claims,

need examine only the circumstances surrounding

the alleged misrepresentations made to him by CBS

before he was hired and the fact that he was laid off.

CBS rejoins that Berda's claims are based on an

alleged individual contract which is inconsistent with

the terms of the collective bargaining agreement, and

that the claims substantially depend on interpretation

of the collective agreement. It therefore contends that

the claims are preempted by the collective bargaining

agreement and that the action must be brought, if at

all, under section 301 of the LMRA.

Several of our sister circuits have been faced with

similar questions. The Court of Appeals for the

Eleventh Circuit has allowed similar state fraudulent

misrepresentation claims to go forward, see Varnum

v. Nu-Car Carriers, Inc., 804 F.2d 638, 640 (11th Cir.

1986),‘ and a divided panel of the Court of Appeals for

the Eighth Circuit has allowed both state fraud and

contract claims to proceed based on alleged

pre-employment misrepresentations by an employer.

See Anderson v. Ford Motor Co., 803 F.2d 953,

955-59 (8th Cir. 1986).

In contrast, prior to the Supreme Court's decision

in Caterpillar, the Court of Appeals for the Ninth

4. However, the Eleventh Circuit has not allowed state law

misrepresentation actions when the alleged misrepresentation

took place while the employee was already covered by a collective

bargaining agreement. See Darden v. United States Steel Corp..

830 F.2d 1116, 1119-20 (11th Cir. 1987).

A-13

Circuit held that state fraudulent misrepresentation

claims arising from alleged pre-employment

misrepresentations are preempted by section 301. See

Bale v. General Telephone Co., 795 F.2d 775, 779-80

(9th Cir. 1986). And, after Caterpillar, it has

maintained this position. See Young v. Anthony's

Fish Grottos, Inc., 830 F.2d 993, 997 n.1 (9th Cir.

1987).

All these courts have agreed that the claims are

only preempted to the extent that they “substantially

depend” on the interpretation of a collective

bargaining agreement. However, the courts have

differed on the more particular question whether in

fact there would be substantial dependence in the

case before them. See Anderson, 803 F.2d at 958-59

(distinguishing Bale). On similar facts they reach

different answers.

We believe that Caterpiilar controls the result in

the instant case. As noted above, Caterpillar makes

clear that in order for there to be section 301

preemption, the plaintiff, in its well-pleaded

complaint, must plead an action that requires

interpretation of the collective bargaining agreement.*

See supra Typescript at 9-10. Consequently, we must

turn to the particular claims raised in Berda’'s

complaint and see if they “substantially depend” on

analysis of the collective bargaining agreement. As will

be seen, we conclude that Berda’s claims are not

preempted.

1. The Contract and Promissory Estoppel Count

In his contract and promissory estoppel count,

Berda alleges that CBS’s_ pre-employment

5. The complaint must be “well-pleaded:” thus a plaintiff

cannot escape preemption merely by failing tc plead essential

elements of its case.

eae

A-14

representation that he would not be laid off

constituted a term governing his employment with

CBS on which he relied and that CBS breached that

term by laying him off. CBS, however, provides us

with no argument of substance as to why this count of

Berda’s complaint requires interpretation of the

collective bargaining agreement.

CBS first contends that the contractual claims are

preempted because they relate to “the basic terms and

conditions of Mr. Berda’s employment.” Appellee’s Br.

at 8. However, Berda’s contract claims are very similar

to the plaintiffs’ claims in Caterpillar. In Caterpillar,

the Supreme Court held that claims of pre-existing

employment contracts for long-term employment were

not preempted by section 301. See supra Typescript

at 9.

CBS next contends that Berda’s oral agreement is

inconsistent with sections 5.02 and 5.03 (the

seniority and layoff provisions) of the collective

agreement, as well as the provision of the collective

bargaining agreement that makes the IBEW the

exclusive bargaining agent of the employees, and the

provision that requires that supplements and

amendments to the collective bargaining agreement

must be made in writing and be agreed to by CBS and

the IBEW. CBS contends, therefore, that Berda’s

claims are “necessarily subsumed into the collective

bargaining agreement,” and thus that Berda’s action

“arises, if at all, under Section 301 of the LMRA.”

Appellee’s Br. at 10.

However. as noted above, Caterpillar made it clear

that not all pre-employment contracts are subsumed

by the collective bargaining agreement. See supra

Typescript at 10-12. Indeed. as in Caterpillar, the oral

agreement at issue in the instant case gave an

advantage to the employee, and thus, as in

Caterpillar, we cannot say that the oral agreement

A-15

was subsumed by the collective agreement such that

no state cause of action can be premised on the oral

contract. We note. as the Supreme Court noted in

both J.I. Case and Caterpillar, that whether an

employee can get relief under an individual agreement

that gives him an advantage beyond the rights he has

under the collective bargaining agreement should “’be

determined by appropriate forums under the law of

contracts applicable, and by the Labor Board if they

constitute unfair labor practices.’” Caterpillar, 107 S.

Ct. at 2431 (quoting J.I. Case, 321 U.S. at 339).

We are not currently presented with the question

whether the existence of a subsequent collective

bargaining agreement may constitute a defense to

Berda’s contract claim under state or federal law.* Nor

are we presented with the question whether the oral

agreement is void because it constitutes an unfair

labor practice. We are only concerned in this appeal

with section 301 preemption, and the Supreme Court

has made clear that section 301 does not preempt

state contract causes of action premised on

pre-employment agreements that are advantageous to

the employee. See Caterpillar, 107 S. Ct. at 2431

(plaintiff can assert state contract rights “so long as

the contract relied upon is not a collective-bargaining

agreement”). Because the contract count of Berda’s

complaint is not substantially dependent on

interpretation of the collective bargaining agreement

under Caterpillar, his contract claims are not

preempted under section 301 of the LMRA, and thus

we must reverse so that he may pursue them on

remand, in the district court.’

6. As noted above. the Supreme Court has held that the

possibility that a federal claim may be raised in the defense of a

contract suit does not mean that the state contract claim is

preempted under section 301. See supra Typescript at 10.

Zp CBS urges that language from this Court's opinion in Malia

v. RCA Corp.. 794 F.2d 909 (3d Cir 1986). requires that we find

2. The Tort Claims

Berda also asserts claims for fraud and negligent

misrepresentation. As noted above, the Supreme

Court, in Lueck, stated that “liJf the policies that

animate § 301 are to be given their proper range...

the preemptive effect of 8301 must extend beyond

suits alleging contract violation.” Lueck, 471 U.S. at

210. However, the Court then set forth the rule that a

State-law tort claim is preempted by 8 301 only if its

resolution is “substantially dependent upon analysis

of the terms of a collective bargaining agreement.” Id.

at 220.°

Berda’s prior contract to be subsumed into the collective

agreement. Malia held that an employee who had formerly been in

a bargaining unit, but was promoted out of the bargaining unit,

could maintain state law contract and tort claims based on

representations made at the time he was promoted that he could

be reinstated in the bargaining unit position if he so desired.

In Malia, we said that the LMRA does not “prevent an

individual -- whether an applicant for new employment or a

current employee in a supervisory position — from negotiating for

a job in a bargaining unit so long as that employment will be on

the terms and conditions set forth in the collective bargaining

agreement.” 794 F.2d at 913. CBS suggests that this language

precludes an employee from maintaining a state law suit based on

a pre-employment agreement that is separate from the collective

bargaining agreement. We believe the language to be ambiguous.

However, to the extent that that language suggests that an

employee can never suc on a pre-employment agreement giving

him more rights than the collective bargaining agreement. we

believe that it does not survive Caterpillar. As noted above, in

Caterpillar the Supreme Court allowed employees to sue on an

independent contract that gave them additional rights. despite

their subsequent union membership. See supra Typescript at 16.

8. At another point in the Lueck opinion, the Court stated that

state tort claims would be preempted only if “inextricably

intertwined with consideration of the terms of the labor contract”.

471 U.S. at 213. Taking this phrase in the context of the whole

opinion, we believe that the Court intended this as a statement

equivalent to “substantial dependence.”

A-17

To maintain a misrepresentation claim under

Pennsylvania law, the plaintiff must establish:

1) a false representation of an existing fact ...; 2) if

the misrepresentation is innocently made, then it

is actionable only if it relates to a matter material

to the transaction involved; while if the

misrepresentation is knowingly made or involves

a non-privileged failure to disclose, materiality is

not a requisite to the action ...; 3) scienter, which

may be either actual knowledge of the truth of

falsity of the representation, reckless ignorance of

the falsity of the matter, or mere false information

where a duty to know is imposed on a person by

reason of special circumstances, ... 4) reliance

which must be justifiable. so that common

prudence or diligence could not have ascertained

the truth; and, 5) damage to the person relying

thereon.

Shane v. Hoffman, 227 Pa. Super. 176, __, 324 A.2d

532, 536 (1974).

When we consider these elements, it becomes

clear that Berda was not required to refer to the

collective bargaining agreement in order to state his

tort claim. Instead, as Berda contends, in order to

maintain a suit for misrepresentation, he need only

plead and establish that Franks and Heighes

promised him that he would not be laid off for a

reasonable period of time although they knew (or were

reckless in not knowing) that in fact CBS was

planning a reduction in force that would affect him.

that he reasonably relied on this misrepresentation,

and that his reliance damaged him.

CBS contends that resolution of this tort claim

does depend on interpretation of a collective

bargaining agreement because “|tJhere is no escaping

the fact that the alleged misrepresentations relate to

A-18

the specific terms of Mr. Berda’s employment by CBS

in a bargaining unit position controlled by a collective

bargaining agreement which speaks to those very

terms.” Appellee’s br. at 16. However, that the

misrepresentations concerned layoffs and that there

was a provision of the collective bargaining agreement

that also related to layoffs are facts of no consequence,

because Berda need not refer to the provision in the

collective bargaining agreement in order to make out

his claim. Despite CBS's intimations, Berda need not

establish that the oral promise made to him prior to

his employment differed from the terms of the

collective bargaining agreement in order to get relief.

See Lingle, 108 S. Ct. at 1882-83 (holding that

plaintiff may pursue state tort claim that does not

involve construing collective bargaining agreement,

even if collective bargaining agreement also provides

remedy for wrong).

Finally, CBS contends that allowing Berda to

proceed with his state law claims would be disruptive

of industrial peace. The Supreme Court observed in

J.I. Case that contracts which give an advantage to

individual employees can be _ disruptive.

Demonstrably, regardless of whether the employer is

acting maliciously or innocently, the very existence of

individual contracts that give certain employees better

terms than the union has obtained for them can

undermine the employees’ support for the union and

lead to industrial discord.

However, section 301 preemption is not the only,

or even the primary, tool available for promoting

industrial peace. As discussed above, section 301

preemption has the limited purpose of ensuring that a

uniform law is applied in interpreting collective

bargaining agreements. To the extent that conduct

(including a company practice of entering into

contracts that give advantages to individual

A-19

employees) constitutes an unfair labor practice that is

damaging to the union, the union can file a grievance

with the National Labor Relations Board. See Medo

Photo Supply Corp. v. NLRB, 321 U.S. 678, 684

(1944) (it is an unfair labor practice to by-pass union

and bargain directly with individual employees as to

“wages hours and working conditions”).

Furthermore, we note, as the Supreme Court

noted in Caterpillar, that section 301 is not the only

type of preemption applicable in labor cases.

The employer may argue [in the state law suit]

that the individual employment contract has been

pre-empted due to the principle of exclusive

representation in 8 9(a) of the National Labor

Relations Act (NLRA), 29 U.S.C. 8 1599(a).... Or

the employer may contend that enforcement of the

individual employment contract arguably would

constitute an unfair labor practice under the

NLRA, and is therefore pre-empted....

107 S. Ct. at 2432. But these doctrines are distinct

from section 301 preemption. Only section 301

preemption converts the state law claim to a section

301 claim so that the statute of limitations for section

301 applies. For the foregoing reasons, we hold that

neither Berda’s contracts claims nor his tort claims

are preempted by section 301 of the LMRA, and thus

we conclude that the statute of limitations for section

301 actions does not apply. Therefore, the district

court erred and we must reverse. We hold that Berda

may proceed in the district court on his state contract

and tort claims.

CBS raises two other legal contentions on this

appeal. First, it contends that the district court

should have dismissed the case as preempted by the

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National Labor Relations Act, under the doctrine of

preemption articulated in San Diego Building Trades

Council v. Garmon, 359 U.S. 236 (1959). Second, it

contends that Berda’s tort count actually alieges a

wrongful discharge claim and that Pennsylvania law

does not allow an employee who was a member of a

union to bring such a claim.

These contentions were not passed upon by the

district court. Generally, in the absence of

“exceptional circumstances,” we decline to “consider

an issue not passed upon below.” Selected Risks

Insurance Co. v. Bruno, 718 F.2d 67, 69 (3d Cir.

1983). We find no exceptional circumstances here.

Hence these questions must be addressed by the

district court in the first instance.

In light of the foregoing, the judgment of the

district court will be reversed, and the case will be

remanded for further proceedings.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

Sor the Third Circuit

(A.O. U.S. Courts. G.M.C. Printing. Phila.. Pa. 215-568-4264)

A-21

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

July 20, 1989

TO: Joseph J. Hinchliffe, Esq. *

Arthur J. Schwab, Esq.

Helen M. Gold, Esq.

NOTICE OF JUDGMENT

This Court’s opinion was filed and Judgment was entered

today in case No. 88-3405 and copies are enclosed herewith.

A-22

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

MARTIN W. BERDA and

LINDA BERDA, his wife,

Plaintiffs

)

V. ) Civil Action

) No. 88-411

)

CBS INC., a corporation, )

)

Defendant

MEMORANDUM OPINION

Presently before the Court is a motion by defendant CBS Inc.

for judgment on the pleadings or, in the alternative, for sum-

mary judgment.

Defendant’s motion will be granted and plaintiffs’ complaint

will be dismissed for reasons set forth below.

Plaintiffs made the following allegations in their complaint.

Plaintiff Martin Berda previously had been employed by

television station WPXI in Pittsburgh, Pennsylvania.

Mr. Berda met with Mr. Emil Franks and Mr. M. Lynwood

Heighes, agents of CBS, on February 27, 1986. At that meeting,

Franks and Heighes made a number of representations to Mr.

Berda which were designed to induce Mr. Berda to leave his job

at WPXI and to come to work for CBS in Washington, D.C.

They represented, among other things, that Mr. Berda would

have employment with CBS for the reasonably foreseeable future

without fear of lay-off; and that any job offered to Mr. Berda

would be a permanent position and would not be seasonal or

temporary.

A-23

CBS subsequently offered Mr. Berda employment in

Washington, D.C. Mr. Berda then resigned his position with

WPXI and began working for CBS on April 14, 1986. A collec-

tive bargaining agreement between CBS and the International

Brotherhood of Electrical Workers was in effect at the time that

Mr. Berda began working for CBS.

Mr. Berda was laid off by CBS on August 29, 1986, less than

five months after he began working for CBS, as part of a

company-wide reduction in work force. Plaintiffs allege that CBS

already had decided prior to the meeting of February 27, 1986

to conduct extensive lay-offs in the department and division of

CBS in which Mr. Berda eventually was offered employment.

All of plaintiffs’ claims are based on state-law rights of ac-

tion. Count I is for fraud and negligent misrepresentation. Count

II is for breach of contract and promissory estoppel. Count III

is for loss of consortium.

II.

The issue presently before the Court is whether plaintiffs’

claims, which are formulated as state-law claims, in fact arise

under a collective bargaining agreement and therefore must be

resolved under federal law pursuant to 29 U.S.C. § 185(a).

29 U.S.C. § 185(a) provides a federal right of action for viola-

tions of contracts between an employer and a labor organiza-

tion representing employees. It specifically provides 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 jurisdic-

tion of the parties, without respect to the amount in

controversy or without regard to the citizenship of the

parties.

This statutory provision evidences a Congressional intention that

federal common law, as opposed to state common law, should

A-24

be applied to cases involving a collective bargaining agreement.

See Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456

(1987).

Although Congress did not indicate the extent to which it in-

tended 29 U.S.C. § 185(a) to preempt state law, the Supreme

Court recently stated that:

questions relating to what the parties to a labor agree-

ment agreed, and what legal consequences were in-

tended to flow from breaches of that agreement, must

be resolved by reference to uniform federal law,

whether such questions arise in the context of a suit

for breach of contract or in a suit alleging liability

in tort.

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985). A state-

law claim should either be treated as a claim arising under 29

U.S.C. § 185(a) or dismissed as preempted by federal labor-

contract law when its resolution “is substantially dependent upon

analysis of the terms of an agreement made between the par-

ties in a labor contract.” Lueck, 471 U.S. at 220. The focus of

inquiry in determining such preemption must be on the nature

of the state-law claims because state-law claims that are indepen-

dent of a collective bargaining agreement are not preempted.

See Malia v. RCA Corp., 794 F.2d 909, 912 (3d Cir. 1986), cert.

denied, 107 S.Ct. 3210 (1987).

In addition, while individual contracts between an employer

and an employee are not altogether precluded by the existence

of a collective bargaining agreement, the collective bargaining

agreement must prevail to the extent that the individual con-

tract is inconsistent with it. See J.J. Case Co. v. NLRB, 321 US.

332, 337-39 (1944). An individual contract may not limit or con-

dition or subtract from the terms of a collective bargaining agree-

ment. Id.

A-25

III.

The oral agreement Mr. Berda alleges he entered into with

CBS provides, essentially, for his continued employment with

CBS, without regard to his seniority (or lack thereof), in the

event that CBS should decide to reduce its work force through

lay-offs.

Plaintiffs’ action is governed by 29 U.S.C. § 185(a) because

their claims ultimately depend upon the interpretation of a pro-

vision in the collective bargaining agreement in effect at the

time between CBS and the International Brotherhood of Elec-

trical Workers. Section 5.03 of the collective bargaining agree-

ment pertains to lay-off. It provides in pertinent part that:

Layoffs caused by a reduction of staff shall be made

in the inverse order of seniority within each of the

separate units as defined within Section 5.02 within

the jurisdiction of each local union....

Plaintiffs’ action also arises under 29 U.S.C. 185(a) because

the alleged oral agreement which underlies their state-law claims

is inconsistent with Section 5.03 of the collective bargaining

agreement and would limit or condition its terms.

Mr. Berda was laid off on August 29, 1986. Plaintiffs’ action

was not commenced, however, until January 19, 1988, some

seventeen months later. The six-month limitation period set forth

at 29 U.S.C. § 160(b) governs actions arising under 29 U.S.C.

§ 185(a). See Del Costello v. Teamsters, 462 U.S. 151, 169-72

(1983). Plaintiffs’ action therefore will be dismissed as

time-barred.

An appropriate order will be issued.

Dated: June 15, 1988.

/s/ Hubert I. Teitelbaum

Hubert I. Teitelbaum

United States District Judge

A-26

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

MARTIN W. BERDA and )

LINDA BERDA, his wife, )

)

Plaintiffs )

)

V. ) Civil Action

) No. 88-41]

)

CBS INC., a corporation, )

)

Defendant )

ORDER

AND NOW, June 15, 1988, for reasons set forth in the

foregoing Memorandum Opinion, IT IS HEREBY ORDERED

that the above-captioned case is dismissed.

/s/ Hubert I. Teitelbaum

Hubert I. Teitelbaum

United States District Judge

ce: Joseph J. Hinchliffe, Esq.

Tarasi & Johnson

510 Third Avenue

Pittsburgh, PA 15219

For Plaintiffs

Arthur J. Schwab, Esq.

Pamela A. McCallum, Esq.

Reed Smith Shaw & McClay

435 Sixth Avenue

Pittsburgh, PA 15219

Helen M. Gold, Esq.

CBS Inc.

51 West 52nd Street, 36th Floor

New York NY 10019

For Defendant

A-27

EXCERPTS FROM COLLECTIVE

BARGAINING AGREEMENT

ARTICLE I

Section 1.01.

the term of this Agreement must be reduced to writing,

numbered serially, signed by the parties hereto, signed by each

Local Union and approved by the International President of the

IBEW, and then shail become a part of this Agreement.

Section 1.02. Recognition and Scope. (a) The Employer recog-

nizes the right of Technicians covered by this Agreement to self-

organization and to bargain collectively through representatives

of their own choosing and, accordingly, hereby recognizes the

IBEW as the sole and exclusive bargaining agent for all

Technicians.

(b) This Agreement covers employment by CBS (including

any Division or subsidiary) involving any of the work specified

in Section 1.03 hereof when done in connection with the pro-

duction and/or recording of material for broadcast, theatre, or

pay television, film-tape or tape-film transfer or standard con-

version or recording processes in connection with broadcasting

and those types of closed-circuit upon which Technicians have

been or are now performing services. In no event shall anything

contained in this paragraph be construed as adversely affecting

any work currently being performed by Technicians under this

Agreement.

A-28

ARTICLE II

Section 2.01. Grievance Procedures. In order to provide for the

equitable and efficient settlement of disputes and controversies

on specific questions arising under this Agreement, it is agreed

that the procedures set forth in this Article II of this Agreement

will govern the conduct of the parties.

Section 2.02. Initiating Grievance Procedures. (a) There shall

be a Local Union-Management Grievance Committee, composed

of not more than three (3) representatives of the Local Union

and not more than three (3) representatives of the Employer.

Upon written notice by either party to the other, this Commit-

tee shall meet within five (5) working days. The request for such

meeting shall state the question or questions to be discussed.

(b) If agreement cannot be reached by the Committee within

ten (10) working days (or within an extension of this period of

time, as may be mutually agreed upon by the Committee) of

its initial meeting, either of the local parties shall request ap-

proval from its respective headquarters office of said local par-

ty’s issuance of a formal demand for arbitration (to the other

local party) and, when such approval is granted, arbitration of

the issue(s) shall proceed at the city of origin of same not later

than fourteen (14) days after the receiving party has been served

with the arbitration demand.

party by the other and the aggrieved party has not notified the

other of its desire to arbitrate for a period of six (6) months subse-

quent to the date upon which such issue was first brought before

the Committee, the issue shall be deemed finally waived and

disposed of and may not be subsequently arbitrated.

Section 2.03. Arbitrators. An individual Arbitrator in each case

shall be selected by the parties pursuant to the rules of the

American Arbitration Association.

A-29

Section 2.04. Arbitration Rules, Procedures.

(a) After following the procedures set forth in Section 2.02

(above), either party may request arbitration by delivering a

signed, written notice to the other party and to the American

Arbitration Association.

(b) Arbitration shall be conducted pursuant to applicable laws

and statutes and the rules and regulations of the American Ar-

bitration Association. The Arbitrator shall have the exclusive right

and obligation to determine whether or not there is an arbitrable

issue; provided, however, that decisions shall be limited to the

determination of grievances arising under this Agreement and

any matters stated to be not arbitrable by the terms of this Agree-

ment shall not be considered. Nothing in this Article II shall be

construed as prohibiting the National parties to this Agreement

from participating in any arbitration hereunder.

binding upon both parties, whether rendered prior to or follow-

ing the expiration of the term of this Agreement, and may be

enforced or reviewed in any court of competent jurisdiction, but

shall not include an amendment or addition to the terms of this

Agreement.

(d) A final decision or award by an Arbitrator shall be made

within fourteen (14) days following the close of the hearing. No

such decision or award shall be made retroactive to a time earlier

than six (6) months prior to that date upon which the grievance

was first initiated under Section 2.02 hereof.

(e) Decisions or awards shall remain effective until the ex-

piration of the original term of this Agreement or until the ex-

piration of any extension of said term.

(f) Each party will bear its own expense of arbitration and

will equally share the fees and expenses of the Arbitrator(s).

Section 2.05. Special Procedures for Discharge Grievance and

Arbitration. Notwithstanding the procedures set forth above,

questions arising out of the discharge of a Technician shall be

treated expeditiously in a manner agreed upon by the Local

Union-Management Grievance Committee.

A-30

Section 5.02. Seniority. Within the jurisdiction of each Local

Union, the seniority of all employees covered by this Agreement

shall be determined as follows:

(a) The seniority of each Technician shall start as of the date

that each Technician was employed by the Employer to perform

work as specified in Section 1.03 hereof, except that the seniority

date for those Assistant Technicians reclassified as a result of

this Agreement shall be October 1, 1969.

(b) At San Francisco, all Technicians presently on the staff

witt be credited with seniority from the date of their initial

employment with KQW or KCBS, as the case may be.

WBBM-TV will be credited with seniority from the date of their

initial employment with WBKB or WBBM-TV, as the case may

be.

(d) At Washington, all Technicians presently on the staff will

be credited with the seniority shown on the mutually certified

seniority list.

(e) At St. Louis, all Technicians presently on the staff of

KMOxX shall be credited with seniority from the date of their

initial employment with KMOXxX. All Technicians presently on

the staff of KMOX-TV shall be credited with seniority from the

date of their initial employment with KWK, KWK Incor-

porated, or KMOX-TV. It is understood that there shall be two

separate seniority lists; a seniority list for KMOX and a seniori-

ty list for KMOX-TV. Those Technicians hired subsequent to

September 30, 1972, shall be credited with seniority from the

date of their initial employment with KMOX or KMOX-TV and

shall have their names placed on the appropriate seniority list

as the case may be.

(f) Seniority for staff Technicians at CND News Bureaus in

cities outside the jurisdictional radii set forth in Section 1.04(2)

of this Agreement shall be credited on a separate basis for each

bureau beginning on the date the Technician starts employment

at such bureau.

A-31

Section 5.03. Layoffs and Re-hires. (a) Layoffs caused by a

reduction of staff shall be made in the inverse order of seniori-

ty within each of the separate units as defined in Section 5.02

within the jurisdiction of each local union. Any Technician who

is laid off shall receive three (3) weeks’ notice of such layoff or

three (3) weeks’ pay in lieu of such notice. In addition to such

aforementioned notice of layoff, or pay in lieu thereof, CBS shall

pay severance pay to any Technician who is laid off, according

to the scale set forth in Section 5.11.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.