Amicus Curiae Brief — General Motors Corp. v. Wells

No. 89-1067

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

MOTION FILEU

JAN 26 1990

GENERAL MOTORS CORPORATION,

7 Petitioner,

Mary R. WELLS, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

MOTION TO FILE BRIEF AS AMICUS CURIAE AND

BRIEF AMICUS CURIAE OF THE

EQUAL EMPLOYMENT ADVISORY COUNCIL

IN SUPPORT OF PETITIONER

ROBERT E. WILLIAMS

DOUGLAS S. MCDOWELL

ANN ELIZABETH REESMAN *

McGUINESS & WILLIAMS

1015 Fifteenth Street, N.W.

Suite 1200

Washington, D.C. 20005

(202) 789-8600

Attorneys for Amicus Curiae

Equal Employment Advisory

Council

* Counsel of Record

pe a A A TT

WILSON - Eras Printing Co.. Inc. - 789-0096 - WASHINGTON, D.C. 20001

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-1067

GENERAL MOTORS CORPORATION,

. Petitioner,

Mary R. WELLS, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

MOTION OF THE EQUAL EMPLOYMENT

ADVISORY COUNCIL FOR LEAVE TO FILE BRIEF

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

To the Honorable, the Chief Justice and the Associate

Justices of the United States Supreme Court:

Pursuant to Rule 37.1 and .2 of the Rules of this

Court, the Equal Employment Advisory Council

(“EEAC”) respectfully moves this Court for leave to

file the accompanying brief amicus curiae in support of

Petitioner in this case. Respondents Mary R. Wells,

et al., have refused consent. In support of this motion,

EEAC by the following shows that this brief brings rele-

vant matter to the attention of the Court that has not

already been brought to its attention by the parties.

1. EEAC is a nationwide association of employers and

trade associations organized in 1976 to promote sound

approaches to the elimination of discriminatory employ-

ment practices. Its membership comprises a broad seg-

ment of the business community. The Council’s govern-

ing body is a Board of Directors composed of experts in

the field of equal employment opportunity. Their com-

bined experience gives the Council an unmatched depth

of knowledge of the practical as well as the legal aspects

of equal employment policies and requirements. The

members of EEAC are firmly committed to the principles

of nondiscrimination and equal employment opportunity.

2. All of EEAC’s members, and the constituents of its

trade association members, are employers subject to va-

rious employment and labor laws, including the National

Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq.,

the Labor Management Relations Act (LMRA), 29

U.S.C. § 141 et seg., and the Employee Retirement In-

come Security Act (ERISA), 29 U.S.C. § 1001 et seq.,

all of which pre-empt suits under state law in certain

circumstances. Many EEAC members are parties to col-

lective bargaining agreements and have entered into, or

may enter into in the future, collectively bargained sev-

erance pay agreements similar to that involved in the

case at bar. Moreover, EEAC members conduct business

in virtually all states, and are subject to state tort suits

which are potentially pre-empted by federal law.

3. Thus, EEAC members have a substantial interest

in the issues presented for review in this case—whether

and when state tort claims of fraudulent misrepresenta-

tion arising out of a collectively bargained severance pay

agreement are preempted by the NLRA, the LMRA, or

ERISA.

The Fifth Circuit held that in order to show pre-

emption under the NLRA, a party must show not only

that its alleged conduct is “arguably prohibited” by § 8

of the NLRA, but also that it is likely to succeed on the

merits of the case before the National Labor Relations

Board, two mutually inconsistent propositions. This con-

clusion conflicts with this Court’s decisions in San Diego

Building Trades Council v. Garmon, 359 U.S. 236

(1959), and International Longshoremen’s Association v.

Davis, 476 U.S. 380 (1986), which require at most that

the party seeking pre-emption put forth enough evidence

to enable a court to conclude that the activity arguably

is subject to the Act. Likewise, the Fifth Circuit ruled

that future employment eligibility was a mandatory sub-

ject of bargaining, an issue which Garmon relegates to

the exclusive jurisdiction of the Board.

The court below also held that because it could find no

provision of GM’s collectively-bargained Voluntary Em-

ployment Termination Plan (VTEP) specifically address-

ing Plaintiffs’ claims, the action was not pre-empted by

§ 301 of the Labor Management Relations Act. This con-

clusion is in conflict with this Court’s decision in Allis-

Chalmers Corporation v. Lueck, 471 U.S. 202 (1985),

and the decisions of several other courts of appeals con-

cluding that § 301 pre-emption is not limited by the four

corners of the contract.

Moreover, the Fifth Circuit also ruled that the VTEP

was not an employee benefit plan, so that the broad pre-

emptive provision of the Employee Retirement Income

Security Act was inapplicable. In so doing, the court

misconstrued this Court’s holding in Fort Halifax Pack-

ing Company, Inc. v. Coyne, 107 S.Ct. 2211 (1987),

which concluded that a state statute requiring a one-time

severance payment in the event of a plant closing did not

require the employer to maintain the type of administra-

tive process that connotes an employee benefit plan. Since

the VTEP did require such a process, the Fifth Circuit’s

holding that ERISA does not pre-empt this action is

erroneous.

4. EEAC has participated as amicus curiae in several

eases in this Court involving preemption of state suits

by federal law.' In addition, EEAC has filed amicus

curiae briefs with this Court in a number of other cases

dealing with the interrelationship between state and fed-

eral laws and the relationship between nondiscrimination

laws and collective bargaining agreements.”

EEAC’s interest in this case lies in its desire that the

process of collective bargaining not be undermined by an

unduly narrow interpretation of the pre-emptive force of

federal labor laws, allowing persons in states that permit

widely varied employment-related individual tort causes

of action to resort to the state courts and state law to

resolve disputes more properly addressed through applica-

tion of uniform federal law. The decision of the Fifth

Circuit below, which adopts a severely restrictive inter-

pretation of pre-emption under the NLRA, the LMRA

and ERISA, creates undue confusion among the employer

community concerning the appropriate forum and ap-

plicable law in these cases.

Because of its significant experience, EEAC is uni-

quely situated to brief the Court on the relevant concerns

of the business community and the significance of this

case to employers generally, as opposed to its significance

to the immediate parties.

1 See Caterpillar, Inc. v. Williams, 107 S. Ct. 2425 (1987) (§ 301

pre-emption); Lingle v. Norge Division of Magic Chef, Inc., 108

S.Ct. 1877 (1988) (§ 301 pre-emption); Shaw v. Delta Air Lines,

Inc., 463 U.S. 85 (1983) (ERISA pre-emption). Moreover, the

National Foundation for the Study of Equal Employment Policy,

the educational foundation associated with EEAC, published a

monograph entitled Allis-Chalmers Corporation v. Lueck: The Im-

pact of the Supreme Court’s Decision on Wrongful Discharge Suits

and Other State Court Employment Litigation (1986).

2 See Kremer v. Chemical Construction Corp., 456 U.S. 461 (1282)

(Title VII preclusion); Ford Motor Co. v. EEOC, 458 U.S. 219

(1982) (Title VII backpay and seniority) ; California Brewers Ass'n

v. Bryant, 444 U.S. 598 (1980) (Title VII and a seniority system) ;

IUE, Local 790 v. Robbins & Meyers, 429 U.S. 229 (1976) (Title VII

and a grievance limitations period).

WHEREFORE, it is respectfully moved that EEAC be

granted leave to file the accompanying brief amicus

curiae in this case.

January 26, 1990

Respectfully submitted,

ROBERT E. WILLIAMS

DOUGLAS S. MCDOWELL

ANN ELIZABETH REESMAN *

McGUINESS & WILLIAMS

1015 Fifteenth Street, N.W.

Suite 1200

Washington, D.C. 20005

(202) 789-8600

Attorneys for Amicus Curiae

Equal Employment Advisory

Council

* Counsel of Record

TABLE OF CONTENTS

ef Ge iy yng | eer iii

INTEREST OF THE AMICUS CURIAE .................... 1

gy vy i it pt gy | Ge! \ | Senn e 2

REASONS FOR GRANTING THE WRIT ................ 6

I. THE COURT OF APPEALS’ HOLDING THAT

A PARTY SEEKING PRE-EMPTION UNDER

THE NLRA MUST DEMONSTRATE BOTH

THAT ITS CONDUCT IS “ARGUABLY PRO-

HIBITED” AND THAT ITS POSITION IS

LIKELY TO SUCCEED ON THE MERITS

BEFORE THE BOARD iS IN DIRECT CON-

FLICT WITH THIS COURT’S DECISIONS IN

GARMON AND DAVIS AND THOSE OF

SEVERAL COURTS OF APPEALS AND

THUS UNDERMINES FEDERAL LABOR

POLICY FAVORING PRE-EMPTION ........... 6

A. The Court of Appeals’ Decision Virtually

Eliminates the “Arguably Prohibited” Prong

of Garmon By Requiring The Party Seeking

Pre-Emption To Prove Mutually Inconsist-

I FN ernst esas chascieainencotetidasstetinnns 6

B. The Court of Appeals’ Decision Conflicts

With Decisions of Other Courts of Appeals

Which Have Applied The Garmon Doctrine.. 11

esteeeneieneeatenceeeenteeill

ii

TABLE OF CONTENTS—Continued

Page

II. THE COURT OF APPEALS’ HOLDING THAT

THIS ACTION DOES NOT REQUIRE INTER-

PRETATION OF A COLLECTIVE BARGAIN-

ING AGREEMENT AND THUS IS NOT PRE-

EMPTED BY §301 OF THE LMRA CON-

FLICTS WITH THE ALLIS-CHALMERS

STANDARD THAT ISSUES THAT DEPEND

UPON THE MEANING OF A COLLECTIVE

BARGAINING AGREEMENT MUST BE DE-

CIDED UNDER FEDERAL LAV .......... kisah 12

A. The Court of Appeals’ Erroneous Holding

That State Law Claims Are Not Pre-Empted

Unless Covered By A Specific Contract Term

Substantially Narrows The Scope of Pre-

| Re ner nen 12

B. The Fifth Circuit’s Holding Conflicts With

Decisions Of Other Courts Of Appeals Which

Have Concluded That State Law Tort Claims

Concerning Extra-Contractual Promises Are

IE ST vc decccn teresttenceteeees 14

III. THE COURT OF APPEALS’ HOLDING THAT

THE VTEP IS NOT AN EMPLOYEE BENE-

FIT PLAN GOVERNED BY ERISA MIS-

CONSTRUES THE VTEP AS A SINGLE

EVENT AND THUS MISAPPLIES THIS

COURT’S HOLDING IN FORT HALIFAX.... 15

IT tsdeastincntvinsnscsntalesnsannsiinimcsnationnt usiasnusneiatincsias 18

iii

TABLE OF AUTHORITIES

CASES: Page

Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504

5 | SRR, fee RANA ed 2 RR een a 16

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

a ce a 4,5, 10, 13, 14

Anderson v. Ford Motor Company, 803 F.2d 953

(8th Cir. 1986), cert. denied, 483 U.S. 1011

(ede Sate var seer tee te aD Oe 15

Berda v. CBS Inc., 881 F.2d 20 (3d Cir.), petition

for cert. filed, No. 89-589 (Oct. 18, 1989) ....... 15

Caterpillar Inc. v. Williams, 482 U.S. 386 (1987).. 14

Charles Dowd Bor Co. v. Courtney, 368 U.S. 592

| ——_—__ N RASEIE SERS RS IN DE IE le Nin PGR A eats Sa RRS 12

Darden v. United States Steel Corporation, 830

F.2d 1116 (11th Cir. 1987) . nas i 15

DeLapp v. Continental Can Company, “Ine., 868

F.2d 1078 (9th Cir. 1989) ........ ee 15

Fort Halifax Packing Company, Inc. v. Coyne,

ge RE. sR eee eee ae 5, 15-17

Garner v. Teamsters, etc. Union, 346 U.S. a:

BRR ARIE Lae sc La Ee el Ce Ce 8

Gilbert v. Burlington Industries, Inc., 765 F.2d

320 (2d Cir. 1985), summarily aff'd, 477 U.S.

901 (1986) ........ sia clileidih niches tindbahclibeililb badisglda sonidetaineo the lieedcs 16

Hines v. Anchor Motor Freight, Inc., 424 U.S. 554

i I EIA Apeh AO ae AA D, le, SESy 12

Holland v. Burlington Industries, Inc., 772 F.2d

1140 (4th Cir. 1985), summarily aff’d sub nom.

Brooks v. Burlington Industries, Inc., 477 U.S.

I a bean 16

International Brotherhood of Electrical Workers,

AFL-CIO v. Hechler, 107 S.Ct. 2161 (1987) ........ 13

International Longshoremen’s Ass'n. v. Davis, 476

of Rd. eer rea ST A aaa 3, 4, 6, 8-11

Kolentus v. Avco Corporation, 798 F.2d 949 (7th

Cir. 1986), cert. denied, 479 U.S. 1082 (1987)... 11

Lingle v. Norge Division of Magic Chef, Inc., 108

S.Ct. 1877 (1988) ...... sddaiiblendoeciabicsameiie ctateieas 14

Local 174, Teamsters v. ‘Lucas Flour Company,

Re eee eon 10

iv

TABLE OF AUTHORITIES—Continued

Page

Lodge 75, International Association of Machinists

and Aerospace Workers, AFL-CIO v. Wisconsin

Employment Relations Commission, 427 U.S.

DO a ceeaiieiiianane 7

Overby v. Chevron USA, Inc., 884 F.2d 470 (9th

GN, SID cckecccccctcnscnsntbonincdsandelincetietatemianndiasiniaianees 11

Pane v. RCA Corporation, 868 F.2d 631 (3d Cir.

TIE a iecpccacnseekensicesanncteniessgnssienaiiaaddmadasalisised beatae 17

Parker v. Connors Steel Co., 855 F.2d 1510 (11th

Cir. 1988), cert. denied, 109 S.Ct. 2066 (1989) .. 11

San Diego Building Trades Council v. Garmon,

te |. xa 3, 4, 6-8, 10, 11

Teamsters v. Lucas Flour Co., 369 U.S. 95 (1962)... 12

Varnum v. Nu-Car Carriers, 804 F.2d 688 (11th

Cir. 1986), cert. denied, 481 U.S. 1049 (1987). 15

Weber v. Anheuser-Busch, Inc., 348 U.S. 468

a ies 7

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

ER) I nee eae 15

STATUTES:

Section 8 of the National Labor Relations Act, 29

I 3, 4, 6, 8, 11

Section 301 of the Labor Management Relations

po ek oe Renee 3, 4, 5, 12, 14

Section 514(a) of the Employee Retirement In-

come Security Act, 29 U.S.C. §1144(a) _....... 38, 15, 16

REGULATIONS:

29 C.F.R. Section 2510.3-1 (a) (3) 16

MISCELLANEOUS: -

Basic Patterns: Income Maintenance, Collective

Bargaining Negotiations and Contracts (BNA)

No. 1144 at 53:2 (April 6, 1989) 17

IN THE

Supreme Court of the Uniied States

OCTOBER TERM, 1989

No. 89-1067

GENERAL MOTORS CORPORATION,

Petitioner.

v.

Mary R. WELLS, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

BRIEF AMICUS CURIAE OF THE

EQUAL EMPLOYMENT ADVISORY COUNCIL

IN SUPPORT OF PETITIONER

The Equal Employment Advisory Council (“EEAC”),

respectfully submits this brief amicus curiae contingent

upon the granting of the accompanying motion.’ The brief

supports the petition for a writ of certiorari filed in this

case by General Motors Corporation, and urges reversai

of the decision below.

INTEREST OF THE AMICUS CURIAE

The interest of the amicus curiae is fully set forth in

the accompanying motion.

1A letter of consent on behalf of the petitioner has been filed

with the Clerk of the Court.

2

STATEMENT OF THE CASE

General Motors Corporation’s (GM’s) Packard Electric

Division plant is located in Clinton, Mississippi. Pet. 2.7

Employees at that plant are represented by Local No.

698 of the International Union of Electrical, Radio &

Machine Workers, AFL-CIO. Id.

Due to a decline in the automobile industry, the Pack-

ard Electric plant held planned layoffs in 1982. Pet. App.

2a. A committee of union and management representa-

tives negotiated a severance pay agreement known as the

Voluntary Termination of Employment Plan (the VTEP).

Id. Under the VTEP, eligible laid-off employees could re-

ceive from $10,000 to $22,000, payable in a lump sum or

in 24 monthly installments, in return for terminating

their employment relationship with GM and relinquishing

seniority and other rights. Pet. 2-3; Pet. App. 41la-43a.

After execution of the VTEP agreement, union and man-

agement officials met with employees to explain its terms.

Pet. 4.

In 1985, GM began hiring new employees at the Pack-

ard Electric plant, but declined to consider the applica-

tions of former employees who had taken VTEP. Pet. 4.

Plaintiffs, thirty-two former Packard Electric employees

who took VTEP benefits, now claim that GM induced

them to terminate their employment by fraudulently mis-

representing the consequences of accepting VTEP. Pet.

App. 4a.

As the Fifth Circuit noted below, the issue of re-

employment rights for those employees who chose the

VTEP was discussed in the negotiations. Pet. App. 3a.

According to GM, the issue of future employment eligibil-

ity was raised during the collective bargaining process as

the VTEP was developed, where management negotiators

2 Citations to the Petition for a Writ of Certiorari are designated

as Pet. ——. Citations to the Petitioner’s Appendix, including those

to the decision below, are designated as Pet. App. ——.

3

made it clear to the union representatives that employees

who took VTEP would not be eligible to be rehired. Jd.

GM maintains as well that when the plan was presented

to employees, they too were told that employees electing

VTEP would not be eligible for future employment with

GM. Id.

In contrast, plaintiffs claim that when union represen-

tatives asked about future employment rights during col-

lective bargaining over the VTEP terms, they were told

that it would be “no problem.” Jd. Plaintiffs further as-

sert that when the plan was explained to them, they were

told not only that they would be eligible for reemployment

but that they would be given preference over other appli-

cants. Pet. App. 46a.

Plaintiffs brought suit in federal district court, alleg-

ing claims under state law theories of fraud and mis-

representation. GM moved for summary judgment, ar-

guing that the action was pre-empted (1) under the doc-

trine of San Diego Building Trades Council v. Garmon,

359 U.S. 236 (1959), because GM’s alleged conduct was

“arguably prohibited” by § 8 of the National Labor Rela--

tions Act, 29 U.S.C. § 158, thus placing jurisdiction with

the National Labor Relations Board and depriving the

district court of subject matter jurisdiction; (2) under

§ 301 of the Labor Management Relations Act, 29 U.S.C.

$ 185, because it involved the terms of a collective bar-

gaining agreement, and (3) under § 514(a) of the Em-

ployee Retirement Income Security Act, 29 U.S.C.

§ 1144(a), because it relates to an employee benefit plan.

The motion was_denied, and the district court certified

the question for interlocutory appeal. Pet. App. 2a.

The Fifth Circuit affirmed. First, the court concluded

that under this Court’s decision in International Long-

shoremen’s Ass’n. v. Davis, 476 U.S. 380 (1986), a party

seeking pre-emption under Garmon on the grounds that

it is accused of conduct “arguably prohibited” by § 8 of

the NLRA must demonstrate both that § 8 arguably pro-

4

hibits such conduct and that it is likely to prevail on the

merits (i.e., that the Act does not prohibit such conduct).

Second, after reading the contract and determining that

none of its provisions specifically addressed Plaintiffs’

claims, the court ruled that § 301 of the LMRA did not

pre-empt the tort action brought under state law, even

though Allis-Chalmers Corporation v. Lueck, 471 U.S.

202 (1985), requires § 301 pre-emption when the issue is

“what the parties to a labor agreement agreed.” Id. at

211. Third, the court ruled that the VTEP was not an

employee benefit plan subject to ERISA pre-emption, even

though implementation of the VTEP required an ongoing

administrative scheme such as that distinguished in Fort

Halifax Packing Company, Inc. v. Coyne, 107 S.Ct.

2211 (1987).

SUMMARY OF REASONS FOR GRANTING THE WRIT

San Diego Building Trades Council v. Garmon, 359

U.S. 236, places exclusive jurisdiction in the National

Labor Relations Board when the conduct in question is

“arguably prohibited” by § 8 of the National Labor Re-

lations Act. The Fifth Circuit’s decision would require a

party seeking pre-emption to demonstrate both that its

conduct was arguably unlawful under § 8 of the NLRA

and also that it is likely to succeed on the merits before

the National Labor Relations Board—two mutually in-

consistent propositions. By adopting an inverted inter-

pretation of this Court’s decision in International Long-

shohemen’s Association v. Davis, 476 U.S. 380, which es-

tablished the burden of proof under Garmon as requiring

the party seeking pre-emption to show that the Board

“reasonably could uphold a claim based on such an inter-

pretation,” 476 U.S. at 395, the court below in effect

abolished the “arguably prohibited” prong of Garmon.

In addition, the Fifth Circuit’s decision would allow

state law to control interpretation of a collectively-

bargained agreement, which is subject to federal law un-

5

der § 301 of the LMRA, merely because the court found

no specific provision of the VTEP which it believed ad-

dressed Plaintiffs’ claims. In contrast, this Court con-

cluded in Allis-Chalmers Corporation v. Lueck, 471 U.S.

202, that § 301 pre-emption extends to “questions relating

to what the parties to a labor agreement agreed.” 471

U.S. at 211. Moreover, the Fifth Circuit’s decision con-

flicts with those of several other courts of appeals holding

that § 301 pre-emption extends to state law tort claims

concerning extra-contractual promises.

Further, the Fifth Circuit erroneously concluded that

the VTEP was not an “employee benefit plan,” so that the

explicit pre-emption provision of ERISA did not apply.

The Fifth Circuit relied on this Court’s ruling in Fort

Halifax Packing Company, Inc. v. Coyne, 107 S.Ct. 2211,

which held that a state law requiring a single severance

payment in the event of a plant closing did not necessitate

an administrative process and thus was not an employee

benefit plan calling for ERISA pre-emption. Here, the

negotiated VTEP required GM to create and maintain

administrative procedures to process benefit applications,

payments, revocations and complaints, so that the Fifth

Circuit erred in concluding that ERISA pre-emption did

not apply.

The Fifth Circuit’s decision conflicts in every important

respect with prior decisions of this Court and several of

the courts of appeals requiring pre-emption by federal

law where Congress has regulated the field. With the

~ National Labor Relations Act, the Labor Management

Relations Act, and the Employee Retirement Income Se-

curity Act, Congress established an exhaustive federal

system for regulating labor-management relations which

this Court’s decisions traditionally have shielded against

excessive interference from private lawsuits under state

law. The Fifth Circuit would allow important industrial

relations issues to be decided under varying principles of

state law, create significant confusion regarding the na-

6

ture and scope of federal pre-emption of industrial rela-

tions, and cause serious concern among the employer

community. For these reasons, it is crucial that this

Court grant the petition to dispel the confusion and fur-

ther define the scope of federal pre-emption.

REASONS FOR GRANTING THE WRIT

I. THE COURT OF APPEALS’ HOLDING THAT A

PARTY SEEKING PRE-EMPTION UNDER THE

NLRA MUST DEMONSTRATE BOTH THAT ITS

CONDUCT IS “ARGUABLY PROHIBITED” AND

THAT ITS POSITION IS LIKELY TO SUCCEED ON

THE MERITS BEFORE THE BOARD IS IN DIRECT

CONFLICT WITH THIS COURT’S DECISIONS IN

GARMON AND DAVIS AND THOSE OF SEVERAL

COURTS OF APPEALS AND THUS UNDERMINES

FEDERAL LABOR POLICY FAVORING PRE-

EMPTION

A. The Court of Appeals’ Decision Virtually Elimi-

nates the “Arguably Prohibited” Prong of Garmon

By Requiring The Party Seeking Pre-Emption To

Prove Mutually Inconsistent Propositions

The Fifth Circuit concluded that a party seeking pre-

emption under the doctrine established by this Court’s

opinion in San Diego Building Trades Council v. Garmon,

359 U.S. 236, must demonstrate not only that its conduct

is “arguably prohibited” by § 8 of the National Labor

Relations Act, but also that “the Board could reasonably

uphold that party’s claim” (i.e. its claim that its conduct

did not violate the NLRA). Pet. App. 8a-9a (emphasis

supplied). In so doing, the court below mistakenly applied

the burden of proof set forth in International Longshore-

men’s Association v. Davis, 476 U.S. 380, which requires

the party seeking pre-emption to “put forth enough evi-

dence to enable the court to find that the Board reason-

ably could uphold a claim based on such an interpretation.”

Id. at 395. The Fifth Circuit’s decision requires a party

7

to prove two mutually inconsistent propositions, and thus

effectively abolishes pre-emption of all future cases in that

Circuit where the alleged conduct is “arguably prohibited”

by the NLRA.

This Court in Garmon created a standard designed to

guide future resolution of the difficult problem of ascer-

taining where federal regulation ends and state jurisdic-

tion begins.* The Court delineated two clear guidelines

establishing when an issue is relegated to the exclusive

jurisdiction of the Board: (1) “[wJhen it is clear or

may fairly be assumed that the activities which a state

purports to regulate are protected by § 7 of the National

Labor Relations Act, or constitute an unfair labor prac-

tice under § 8, . . .” id. at 244 (emphasis added); and

(2) “[wjhen an activity is arguably subject to § 7 or § 8

of the Act... .” Id. at 245. (emphasis added).* In

either of these situations, the Court has decreed that state

3 As this Court recognized in San Diego Building Trades Council

v. Garmon, 359 U.S. 236, Congress has not exercised the full scope

of its authority under the Commerce Clause to pre-empt the field of

industrial relations, but chose instead to regulate only in certain

areas, leaving others “free for the operation of economic forces”

and still others for regulation by the states. The boundaries be-

tween these categories are not clearly delineated, and thus can be

defined only through the process of litigation. Jd. at 240, quoting

Weber v. Anheuser-Busch, Inc., 348 U.S. 468, 480-81 (1985).

4 The Court recognized only two exceptions to this rule: it will not

find that Congress intended to pre-empt the field ‘“‘where the activity

regulated was a merely peripheral concern of the Labor Manage-

ment Relations Act,” Garmon, 359 U.S. at 243, “[o]r where the regu-

lated conduct touched interests so deeply rooted in local feeling and

responsibility that, in the absence of compelling congressional direc-

tion, [the Court] could not infer that Congress had deprived the

States of the power to act.” Jd. at 244. A separate line of analysis,

not relevant here, has evolved “focusing upon the crucial inquiry

whether Congress intended that the conduct involved be unregulated

because left ‘to be controlled by the free play of economic forces.’ ”

Lodge 75, International Association of Machinists and Aerospace

Workers, AFL-CIO v. Wisconsin Employment Relations Commission,

427 U.S. 132, 140 (1976).

ee

8

interests must yield to the primary jurisdiction of the

National Labor Relations Board.

Tracing the development of judicially created bound-

aries in this area, the Court observed that “the unifying

consideration of our decisions has been regard to the fact

that Congress has entrusted administration of the labor

policy for the Nation to a centralized administrative

agency [the National Labor Relations Board], armed with

its own procedures, and equipped with its specialized

knowledge and cumulative experience.” 359 U.S. at 242,

citing Garner v. Teamsters, etc. Union, 346 U.S. 485,

490-491 (1953).

In the instant case, GM sought Garmon preemption on

the ground that the plaintiffs’ allegations, if true, con-

stituted a charge of conduct arguably prohibited by § 8

(a) (5) of the NLRA, 29 U.S.C. § 158(a) (5), which re-

quires an employer to bargain in good faith with the

representatives of its employees. If, as asserted by the

plaintiffs, GM misrepresented its position on future em-

ployment eligibility during collective bargaining over the

terms of the VTEP, or made conflicting representations

to individual employees in presenting the plan for their

consideration, its good faith under § 8(a) (5) was called

into question. Accordingly, Plaintiffs accused GM of

conduct that was “arguably prohibited” under Garmon,

so that jurisdiction over the issue properly belonged with

the National Labor Relations Board. On this basis alone,

the Court of Appeals’ decision that there was not pre-

emption should be reversed.

The Fifth Circuit’s error has significance reaching far

beyond this case, moreover, because it rests on a funda-

mental misconstruction of the standard for Garmon pre-

emption. In /nternational Longshoremen’s Association v.

Davis, 476 U.S. 380, the Court articulated the burden

of proof placed upon a party seeking pre-emption under

Garmon. Observing that “the pre-emption inquiry is

whether the conduct at issue was arguably protected or

9

prohibited by the NLRA,” id. at 394 (emphasis added),

the Court stated:

If the word “arguably” is to mean anything, it must

mean that the party claiming pre-emption is required

to demonstrate that his case is one that the Board

could legally decide in his favor. That is, a party

asserting pre-emption must advance an interpreta-

tion of the Act that is not plainly contrary to its

language and that has not been “authoritatively re-

jected” by the courts or the Board. ... The party

must then put forth enough evidence to enable the

court to find that the Board reasonably could uphold

a claim based on such an interpretation.

476 U.S. at 395 (citation omitted). As clarified in Davis,

“a party asserting pre-emption must put forth enough

evidence to enable a court to conclude that the activity is

arguably subject to the Act.” Jd. at 398. The issue

is whether the case raises issues arguably governed by

the NLRA, not whether the employer has shown that its

conduct violated the Act.

The interpretation given to Davis by the Fifth Cir-

cuit, however, would effectively abolish the standard set

forth in Davis, at least for cases involving conduct “ar-

guably prohibited” by the NLRA. Misreading the bur-

den of proof required by Davis, the court below stated

that “the party attempting to invoke the Board’s juris-

diction must then demonstrate that the Board could rea-

sonably uphold that party’s claim.” Pet. App. 8a-9a (em-

phasis added). It stated that because GM’s argument

went only to show “that its conduct was arguably pro-

hibited by the Board, . . . its claim before the Board could

not reasonably be upheld by the Board.” Pet. App. 9a

(emphasis in original).

The Fifth Circuit thus misconstrued this Court’s opin-

ion in Davis as requiring an employer seeking pre-

emption to demonstrate both that its conduct is arguably

violative of the NLRA and also that the employer is

10

likely to win before the Board on the merits of the claim.

Moreover, the court appears to have reasoned that if an

employer has met the former requirement, it is effectively

precluded from meeting the latter. In effect, the court

would require the employer to show that the Act argu-

ably prohibits the alleged conduct, but that the Board

would uphold the employer’s defense. If the credibility

of the Board is to be maintained, this standard presents

a logical impossibility. The Fifth Circuit’s construction

of Davis thus creates a Catch-22 situation from which

no party seeking pre-emption under the “arguably pro-

hibited” prong of Garmon can emerge victorious.

Where the “arguably prohibited” prong of Garmon is

involved, the only reasonable construction of Davis is that

the moving party must show that its opponeni’s claims,

if true, reasonably could be upheld by the Board. This

interpretation of the proper legal standard is in accord

with well-established national labor policy. Under both

the National Labor Relations Act® and the Labor Man-

agement Relations Act,® this Court has required federal

pre-emption where “the exercise of state power over a

particular area of activity threatened interference with

the clearly indicated policy of industrial relations.” Gar-

mon, 359 U.S. at 248. See also Local 174, Teamsters v.

Lucas Flour Company, 369 U.S. 95, 103 (1962) (“The

dimensions of § 301 [of the LMRA] require the conclu-

sion that substantive principles of federal labor law must

be paramount in the area covered by the statute.”). By

relegating conduct arguably prohibited by the NLRA to

scrutiny under state law, the Fifth Circuit’s holding

erodes the strong preference for federal pre-emption es-

tablished by Congress and long maintained by this Court.

In an area where there is a compelling need for uniform

federal policy, the court below has created a significant

5 See, e.g., San Diego Building Trades Council v. Garmon, 359

U.S. 236.

6 See, e.g., Allis-Chalmers Corporation v. Lueck, 471 U.S. 202.

11

gap which allows for the intrusion of varied principles

of state law which will lead inevitably to conflicting

results.

B. The Court of Appeals’ Decision Conflicts With Deci-

sions of Other Courts of Appeals Which Have

Applied The Garmon Doctrine

Significantly, other federal courts of appeals have re-

viewed similar cases since Davis and have found NLRA

pre-emption using the analysis suggested above, without

the self-defeating exercise adopted by the Fifth Circuit.

In Parker v. Connors Steel Co., 855 F.2d 1510 (11th Cir.

1988), cert. denied, 109 S.Ct. 2066 (1989), for example,

a group of employees presented a state law fraud claim

that the company had obtained concessions from the

union by misrepresenting that the plant would remain

open. The Eleventh Circuit concluded that the employees’

allegations, if taken as true, would constitute a claim of

failure to bargain in good faith, and applied Garmon to

pre-empt the claim. The Seventh Circuit reached a sim-

ilar result in Kolentus v. Avco Corporation, 798 F.2d

949 (7th Cir. 1986), cert. denied, 479 U.S. 1032 (1987),

holding that state law fraud claims that an employer mis-

represented facts and failed to disclose an impending

plant closing when negotiating a collective bargaining

agreement amounted to unfair labor practice claims un-

der § 8(a)(5) and thus were pre-empted by Garmon.’

The Fifth Circuit’s decision thus conflicts with those of

other circuits. This dissonance in court rulings must be

harmonized by Supreme Court review.

7 See also Overby v. Chevron USA, Inc., 884 F.2d 470 (9th Cir.

1989) (recognizing a potential § 8 violation in a state law wrongful

discharge claim and remanding for consideration of pre-emption

issue).

12

II. THE COURT OF APPEALS’ HOLDING THAT THIS

ACTION DOES NOT REQUIRE INTERPRETATION

OF A COLLECTIVE BARGAINING AGREEMENT

AND THUS IS NOT PRE-EMPTED BY § 301 OF THE

LMRA CONFLICTS WITH THE ALLIS-CHALMERS

STANDARD THAT ISSUES THAT DEPEND UPON

THE MEANING OF A COLLECTIVE BARGAINING

AGREEMENT MUST BE DECIDED UNDER FED-

ERAL LAW

A. The Court of Appeals’ Erroneous Holding That

State Law Claims Are Not Pre-Empted Unless

Covered By A Specific Contract Term Substantially

Narrows The Scope of Pre-emption Under § 301

The court below held that Plaintiffs’ claims were based

on rights under state law independent of those created by

the collectively-bargained VTEP, so that pre-emption un-

der § 301 of the Labor Management Relations Act would

not apply unless the agreement contained provisions that

could be construed to govern those rights.* Pet. App. 16a.

Having reviewed the VTEP and determined that it did

not contain any such provisions, the court concluded that

$ 301 pre-emption did not apply.

8 Section 301(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 affect-

ing 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.

29 U.S.C. § 185(a). This Court has held that “Section 301 contem-

plates suits by and against individual employees as well as between

unions and employers.” Hines v. Anchor Motor Freight, Inc., 424

U.S. 554, 562 (1976). While § 301 does not vest exclusive jurisdic-

tion in the federal courts, Charles Dowd Box Co. v. Courtney, 368

U.S. 502 (1962), it requires that federal law be applied. Teamsters

v. Lucas Flour Co., 369 U.S. 95 (1962).

13

This reasoning conflicts with this Court’s decision in

Allis-Chalmers Corporation v. Lueck, 471 U.S. 202 (§ 301

preempts state law allegations of bad faith handling of

disability claim). Instead:

questions relating to what the parties to a labor

agreement agreed, and what legal consequences were

intended 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.

Id, at 211 (emphasis added). The proper inquiry in such

a case is “whether evaluation of the tort claim is in-

extricably intertwined with consideration of the terms

of the labor contract.” Jd. at 213.° Thus, “when resolu-

tion 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... or dismissed as pre-empted

by federal labor-contract law.” Jd. at 220 (citation

omitted ) .

The state law claims in this case are intertwined with

the VTEP agreement and substantially dependent upon

its interpretation. The VTEP’s existence, creation, nego-

tiation, and consequences are the bases for this lawsuit.

The parties’ total disagreement over what was said about

future employment eligibility during the negotiation

process raises precisely the issue outlined in Allis-

Chalmers: a question as to what the parties to the VTEP

—the union and GM—agreed. Indeed, the Fifth Circuit

itself had to review the VTEP agreement and make a

® See also International Brotherhood of Electrical Workers, AF L-

CIO v. Hechler, 107 S.Ct. 2161 (1987) (in state law negligence suit

by employee against union alleging duty to provide safe working

environment, primary inquiry is existence and scope of duty of care

imposed by collective bargaining agreement. necessitating contract

interpretation ).

14

determination as to its contents in order to reach its

conclusion that none of the VTEP provisions affected

Plaintiff’s claims.’

Thus, § 301 pre-emption is compelled. The Fifth Cir-

cuit’s rationalization ignores the clear mandate of Allis-

Chalmers that § 301 pre-emption is not limited by the

four corners of the contract, but also extends to “ques-

tions relating to what the parties to a labor agreement

agreed.” 471 U.S. at 211. The appropriate avenue of

relief in a claim so clearly interrelated with collective

bargaining is by way of § 301, not a tort suit under state

law. If the Fifth Circuit’s holding is permitted to stand,

numerous collective bargaining agreements will be sub-

ject to state tort suits, undermining the collective bar-

gaining process and resulting in the type of chaos § 301

was designed to prevent.

B. The Fifth Circuit’s Holding Conflicts With Decisions

Of Other Courts Of Appeals Which Have Concluded

That State Law Tort Claims Concerning Extra-

Contractual Promises Are Pre-empted By § 301

The Fifth Circuit’s holding that Plaintiffs’ claims fell

outside the collectively-bargained VTEP and thus were

not subject to § 301 pre-emption conflicts with decisions

of other circuit courts of appeals. The Ninth and Elev-

enth Circuits have ruled that state law fraud claims aris-

10 Unlike the individual contracts reviewed in Caterpillar Inc. v.

Williams, 482 U.S. 386 (1987), where the contract at issue was

made when the plaintiffs held managerial positions and before they

became employee members of the bargaining unit, Plaintiffs’ claims

herein are dependent upon a labor contract and concern rights

which were discussed during negotiation of the agreement with

Plaintiffs’ representatives. Similarly, as no independent state statu-

tory right is involved, the instant case differs greatly from Lingle

v. Norge Division of Magic Chef, Inc., 108 S.Ct. 1877 (1988) (state

tort suit for retaliatory discharge for filing a workers’ compensation

claim could be decided without interpreting collective bargaining

agreement ).

15

ing from extra-contractual promises made to employees

covered by a collective bargaining agreement at the time

the promises were made are pre-empted by § 301. DeLapp

v. Continental Can Company, Inc., 868 F.2d 1073 (9th

Cir. 1989) (oral promise not to enforce recall provision

of collective bargaining agreement disqualifying employee

from receiving early retirement benefits); Darden v.

United States Steel Corporation, 830 F.2d 1116 (11th

Cir. 1987) (promise of job security).'' Because of the

conflict between the decision below and those of the Ninth

and Eleventh Circuits, this Court should grant review.

Ill. THE COURT OF APPEALS’ HOLDING THAT THE

VTEP IS NOT AN EMPLOYEE BENEFIT PLAN

GOVERNED BY ERISA MISCONSTRUES THE

VTEP AS A SINGLE EVENT AND THUS MIS-

APPLIES THIS COURT’S HOLDING IN FORT

HALIFAX

The court below erroneously relied on this Court’s de-

cision in Fort Halifax Packing Company, Inc. v. Coyne,

107 S.Ct. 2211, to conclude that ERISA did not pre-empt

the tort claims presented here.’* Pet. App. 19a. In Fort

11 Parenthetically, a related circuit split exists among cases in-

volving misrepresentations made before the aggrieved individuals

became employees subject to the collective bargaining agreement.

While the Ninth Circuit has held that such claims are pre-empted

by § 301, see Young v. Anthony’s Fish Grottos, Inc., 830 F.2d 993

(9th Cir. 1987), the Third, Eighth and Eleventh Circuits have held

that such claims are not. See Berda v. CBS Inc., 881 F.2d 20 (3d

Cir.), petition for cert. filed, No. 89-589 (Oct. 13, 1989); Anderson

v. Ford Motor Company, 803 F.2d 953 (8th Cir. 1986), cert. denied,

483 U.S. 1011 (1987); Varnum v. Nu-Car Carriers, 804 F.2d 638

(11th Cir. 1986), cert. denied, 481 U.S. 1049 (1987).

12 Section 514(a) of the Employee Retirement Income Security

Act (ERISA), comprehensively pre-empts state regulation of em-

ployee benefit plans as follows:

Except as provided in subsection (b) of this section, the provi-

sions of this subchapter and subchapter III of this chapter shall

supersede any and all State laws insofar as they may now or

16

Halifax, this Court reviewed a state law mandating a

single lump sum payment of one week’s pay for each

year of service to employees affected by a. plant closing,

and concluded that such a law was not pre-empted by

ERISA. The Court reasoned that ERISA pre-emption

applies only to employee benefit plans, requiring admin-

istrative activity, and not to a one-time lump sum pay-

ment mandated by the occurrence of a single event such

as a plant closing. /d.

The VTEP at issue here certainly required GM to do

“more than write a check... .” Fort Halifax, 107 S. Ct.

at 2218."* Also, unlike the state-mandated one-time sev-

erance payment involved in Fort Halifax, the VTEP was

integrated into a collectively-bargained plan that in turn

had other ongoing obligations that were related to rights

derived from a broader collective bargaining agreement."

hereafter relate to any employee benefit plan described in

section 1003(a) of this title and not exempt under section

1003(b) of this title.

29 U.S.C. § 1144(a). As this court has recognized, this section was

“meant to establish pension plan regulation as exclusively a federal

concern.” Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523

(1981).

13 Severance pay plans can be “employee benefit plans” under

ERISA. See Holland v. Burlington Industries, Inc., 772 F.2d 1140

(4th Cir. 1985), summarily aff'd sub nom. Brooks v. Burlington

Industries, Inc., 477 U.S. 901 (1986); Gilbert v. Burlington Indus-

tries, Inc., 765 F.2d 320 (2d Cir. 1985), summarily aff'd, 477 U.S.

901 (1986). Under Department of Labor regulations interpreting

ERISA, severance pay plans, along with “benefits which are in

substance severance benefits, although not so characterized,” are

employee benefit plans under ERISA. 29 C.F.R. § 2510.3-1(a) (3).

14 For example, the VTEP required filing an application and man-

agement approval. Pet. App. 41a. While a lump sum payment was

an option, the VTEP also allowed employees to elect to receive

their benefits in twenty-four monthly installments, thus necessitat-

ing an administrative process to pay benefits over a two-year period.

Pet. App. 42a. It included a fourteen-day revocation option as well

as a complaint procedure allowing appeal and review under the

17

The Fifth Circuit’s ruling makes employee benefit plans

such as the VTEP vulnerable to the nuances of state law,

creating a severe burden for employers, particularly those

doing business in more than one state. Nor is this an

isolated problem; a full forty percent of collective bar-

gaining agreements sampled in a recent study contained

severance pay provisions. See Basic Patterns: Income

Maintenance, Collective Bargaining Negotiations and Con-

tracts (BNA) No. 1144 at 53:2 (April 6, 1989). Under

the decision below, the state courts will be treated to a

steady flow of severance-related issues that instead should

be decided under federal law. The scope of this problem,

and the potential negative effect of the Fifth Circuit’s

decision on Congress’ desire for a uniform regulatory

ERISA scheme, compel review by this Court.

Supplemental Unemployment Benefit (SUB) procedures established

in the main bargaining agreement. Pet. App. 43a. All appeals would

be “locally handled.” Jd. Together, these provisions require an on-

going scheme to process applications, revocations, payments and

complaints. Cf. Pane v. RCA Corporation, 868 F.2d 631 (3d Cir.

1989) (state law contract and tort claims regarding severance pay

agreement requiring administrative scheme preempted by ERISA).

Thus, the VTEP contained and required a “set of administrative

practices vulnerable to the burden that would be imposed by a

patchwork scheme of regulation.” Fort Halifax, 107 S.Ct. at 2217.

18

CONCLUSION

For the foregoing reasons, EEAC respectfully submits

that the petition for writ of certiorari should be granted.

Respectfully submitted,

ROBERT E. WILLIAMS

DOUGLAS S. MCDOWELL ~—

ANN ELIZABETH REESMAN *

MCGUINESS & WILLIAMS

1015 Fifteenth Street, N.W.

Suite 1200

Washington, D.C. 20005

(202) 789-8600

Attorneys for Amicus Curiae

Equal Employment Advisory

Council

January 26, 1990 * Counsel of Record