Petition for Writ of Certiorari — Benjamin v. Adam

Supreme Court brief1994

Ask Donna

What actually matters in this document.

Text

tn 93208 4 JUN 27 199

“OFrite oF htt tik

In The

Supreme Court of the United States

October Term, 1993

DAVID BENJAMIN,

Petitioner,

THOMAS ADAM, THOMAS BAILEY, ANDREW

BAKAYSA, CHARLES BAKAYSA, JOHN BAKAYSA,

EDWARD EARRETT, CARL BAUM, CLAIR BAUM,

JACK BAUM, JACK BAUMGARTNER, JAMES

BEATTY, CARL BECK, EVERTT BELL, GREGG BELL,

THOMAS BELL, ALBERT BELL,

(continued on Inside Cover)

Respondents.

INTERNATIONAL UNION, UNITED MINE

WORKERS OF AMERICA,

Additional Respondents.

Petition For Writ Of Certiorari

To The Superior Court Of Pennsylvania

PETITION FOR WRIT OF CERTIORARI

Or COUNSEL: H. Wooprurr TurRNER, Esa.*

: KirKPATRICK & LOCKHART

Cart A. Bein, Jr., Eso. 1500 Oliver Building

Bein & Kusista Pittsburgh, PA 15222

15 North Front Street B"

(412) 355-6500

Counsel for Petitioner

David Benjamin

Clearfield, PA 16830-0001

June 27, 1994

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 \\ \

OR CALL COLLECT (402) 342-2831 3

DONALD BENNETT, FRED BENNETT, RAYMOND BEN-

NETT, RICHARD BENNETT, RONALD BENNETT, BAR-

NEY BENSKY, ROBERT BERLIN, JOHN BISHOP, HARRY

BISS, L. CARL BLAKE, WALTER BLUME, WILLIAM

BLUME, GARY BOND, DENNIS BOUCH, RONALD

BOUCH, DARRYL BOWSER, PAUL BRACKEN, ROBERT

BRACKEN, CHRISTOPHER BRACKEN, CHRISTOPHER

BRINK, DANIEL BRINK, GLEN BRINK, JAMES BRINK,

DALE BROOKS, EDGAR BROTHERS, JAMES BUCK,

WILLIAM BUCK, RICHARD BYERS, ERNEST CAULD-

WELL, BRIAN CAMERON, JEFF CAMERON, KEVIN

CAMERON, ALBERT CHIPLIS, FRANKLIN CLARK,

ROY CLARK, WILLIAM CLARK, JAMES CLUTTER,

WILLIAM COLLINS, JOSEPH CRAFT, JOHN CURRY,

EDWIN DAUGHERTY, EDWARD DAVIES, TERRY

DAVIES, RICHARD DELP, BERNARD DIEHL, NORMAN

DIEHL, CHARLES DILLON, DONALD DIMMICK,

ROBERT DUFOUR, DAVID EGER, WILLIAM ENE-

MINGER, GARY FARMERY, WILLIAM FARMERY,

DOUGLAS FEASTER, IRVIN FEASTER, JAY FISHEL,

WILLIAM FLEMING, DELWYN FRY, DONALD FYOCK,

GREGORY GARDNER, MYREL GARDNER, THOMAS

GARDNER, ROGER GEIST, KENNETH GILBERT,

RONALD GILL, JOSEPH GLASS, JR., JOSEPH GLASS,

SR., JOHN GOWIN, ANDREW HAAG, CHARLES

HAAG, LESLIE HAMILTON, RUSSELL HARPSTER,

WALTER HAUCK, DANIEL HEWITT, JOHN HEWITT,

DAVID HOOVER, RICHARD HURD, GERALD HUT-

TON, ROBERT HUTTON, ROBERT JOHNS, JAMES

JOHNSON, RONALD JOHNSTON, THOMAS KAWA,

CLAIR KELLER, JEFFREY KELLY, ALBERT KITCHEN,

ARTHUR KITCH® J, DAVID KITCHEN, GEORGE

KITCHEN, GUY “itCHEN, LARRY KITCHEN, SHER-

MAN KITCHEN, JERRY KLINE, PAUL KOVALCHICK,

SHERMAN KRAUSE, BARRY KRUISE, DONALD

KRUISE, RONALD KRUISE, TERRY KRUISE, GEORGE

KURTZ, DANNY KUTRUFF, MELVIN LEAMER,

ANDREW KECHENE, ROBERT LEE, TERRY LENDER,

ALAN LEWIS, DAVID LEWIS, THERON LEWIS, WIL-

LIAM LEWIS, DAVID LIGHTNER, KEVIN LOCKETT,

BYRON LONG, DAVID LONG, PAUL LONG, DOUGLAS

LUCAS, CHARLES LUNGER, DAVI®; LYDIC, ERNEST

LYONS, THOMAS MAHAFFEY, ST}kRY MAHAFFEY,

JR., LEONARD MARTIN, WILLIS. MARUNA, JOHN

MATIA, JOSEPH MAZENKO, JAC® McCRACKEN,

THOMAS McCRACKEN, THOMAS i4cELLENY, ELDON

McGARRY, DONALD McGARVEY, JOHN THOMAS

McGEE, “WILLIAM WALLACE McGEE, RONALD

MECKLE’, TERRY MILLER, JAMES MILLS, DAVID

MOORE, JAMES MOWREY, MARTIN MULHOLLEN,

THOMAS NELLEN, JEROME NEVLING, JOEL MARTIN

PASSMORE, CHARLES PEACE, ROBERT PEARCE,

CHARLES PENNINGTON, ROBERT PENNINGTON,

RONALD FHILIPPI, IVAN PIERCE, THOMAS PON-

TZER, DAVID QUEEN, RICHARD QUEEN, ROBERT

REITZ, DENNIS ROBBINS, EUGENE ROMAGNA, JOHN

ROSE, CHARLES ROSS, JOHN ROSS, THOMAS ROSS,

RANDY ROWLES, HARRY ROGH, DONALD SHEEDER,

LARRY SHOMO, ROBERT SHOMO, VERNON SIM-

MONS, ROBERT SINCLAIR, DONALD SMEAL, GARRY

SMEAL, PHILLIP SMEAL, ROBERT SMEAL, DENNIS

SMITH, JOHN SMITH, ROBERT SMITH, RAYMOND

SMYERS, RICHARD SNYDER, JOSEPH SOLTYS,

THOMAS SPANGLE, DUANE SPENCER, RONALD

STATES, ARTHUR STIVER, HAROLD STIVER, IRVIN

STIVER, DUANE STRONG, DONALD SUNDERLAND,

THOMAS SWAUGER, JAMES TAYLOR, GERALD TIM-

CHAK, EDWARD TKACIK, HERBERT VON SCOYOC,

LEWIS WAGNER, MICHAEL WAGNER, RONALD WAG-

NER, RUSSELL WALLACE, GEORGE WARHOLIC,

ROBERT WASHIC, JOHN WEAVER, DANIEL WEBSTER,

ELLIS WESTOVER, GORDON WESTOVER, JAMES

WESTOVER, LEMOINE WESTOVER, JOSEPH WHIT-

TON, CHARLES WIKINSON, FRANK WILLIAMS,

THOMAS WILLIAMS, ROBERT WITHERITE, ROBERT

WOODS, MICHAEL WRIGHT, ROBERT WRIGHT, DALE

YARGER, GARY YARGER, KENNETH YARGER, DENNIS

YOUNG, JOHN YOUNG, AND LARRY YOUNG,

QUESTIONS PRESENTED

1) Whether this Court should resolve the conflict

that exists between state and federal courts by holding

that § 301 of the Labor Management Relations Act

(“LMRA”) preempts a state-law Wage Payment and Col-

lection Law (“WPCL”) claim for the breach of a collective

bargaining contract covered by the LMRA.

2) Whether this Court should resolve the conflict

that exists between State and Federal courts by holding

that a corporate official is not personally liable for the

breach of a collective bargaining agreement covered by

the LMRA absent a showing sufficient to pierce the cor-

porate veil under Federa! common law.

TABLE OF CONTENTS

Page

COO POO 6 oy o's él nce wdc eeeeteuseseeees i

Pee Gr GS 6 6.444: 0932 0 0's hisese ieee eee ii

pK PT ere errr ee eS iii

CD TNO 6 000 ose esetsndevucnenesecodnuses ees 1

IS os o's 0 00s 60 65 eds oe Redes one waa 1

Ry SIO 4 6. c'4- vee denceedansdeuecsneetinatenas 1

Serta OF Ge Ge vce incscasvessieitenceaks 2

Reasons for Granting The Writ .................... 7

I. State and Federal Courts are Divided on

Whether § 301 Preempts an Employee’s WPCL

Claim for the Breach of a Collective Bargaining

Agreement Covered by the LMRA............ 9

II. State and Federal Courts are Also Split on the

Personal Liability of Corporate Officers for

the Breach of a Collective Bargaining Agree-

ment Covered by the LMRA................ 16

III. The Pennsylvania Superior Court’s Misread-

ing of Complete Auto Transit, Inc. v. Reis Does

Not Diminish the Reasons for Granting the

WEEE: oc ccenedivndsc ghéhube eeandatneeneeratr 23

CO og. 5. g ak bokdobeeeb owl seas ee 27

iil

TABLE OF CITATIONS

Page

Cases CITED:

Adam v. Benjamin, 426 Pa. Super 543, 627 A.2d

GEOG CIGD oc ccc dss cvowsececaveresecertenns 23.2.6

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

ukaevesedccvasisedbavess¥esreeeserileee 7, 10, 26

Amalgamated Cotton Garment & Allied Indus. Fund v.

Dion, 341 Pa. Super. 12, 491 A.2d 123 (1985) ..... 14, 17

Amalgamated Cotton Garment and Allied Industries

Fund v. Campolong, 317 Pa. Super. 150, 463 A.2d

1129 (1983). 0c ccccscccccccscccenscccccccccccersess 17

Ash v. Raven Metal Products, Inc., 190 W. Va. 90, 437

S.E.2d 254 (1993) ...... cece erences re ere r rrr 15

Atkinson v. Sinclair Refining Co., 370 U.S. 238

(NDED) o.oo dccesivodouccncestecdisoumnsevavesieny ee 24, 25

Babb v. United Food and Commercial Workers District

Union, 233 Neb. 826, 448 N.W.2d 168 (1989)....... 15

Baron v. National Standard Co., Civ. A. No. 93-

CV-4953, 1994 WL 158883 (E.D. Pa. Apr. 28,

DO cnc sik cdiwin ed cd sakens chee tess CXeNK ore seees 13, 25

Barton v. Creasey Co. v. Clarksburg, 900 F.2d 249

(4th Cir. 1990), cert. foied, . tS, .., 148

S.Ct. 137 (1990). occ cccdeccccccercecnsccsetores 14, 25

Brazinski v. Transport Service Co., 159 Ill. App.3d

1061, 513 N.E.2d 76 (1987)......--- eee eee cece eee 15

Carpenters Health & Welfare Fund v. Kenneth R.

Ambrose, Inc., 727 F.2d 279 (3d. Cir. 1983)......---. 4

Caswell v. BLI Genetics, Inc., 121 N.H. 1048, 437

AiBd FEE TAGS) occ ccc cdetsccscvevccdesseveess 18

TABLE OF CITATIONS —- Continued

Page

Cascade Energy and Metals Corp. v. Banks, 896 F.2d

1557 (10th Cir.), cert. denied, 498 U.S. 849 (1990) .... 21

Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987)... 5, 10, 16

Charles Dowd Box Co. v. Courtney, 368 U.S. 502

CRD cn 000k deus ede k0sentsestieee eee 4

Combs v. Indyk, 554 F.Supp. 573 (W.D. Pa. 1982)..... 24

Complete Auto Transit, Inc. v. Reis, 451 U.S. 401

(| rere re oe eee passim

Contractors, Laborers, Teamsters and Engineers

Health and Welfare Plan v. Hroch, 757 F.2d 184

oe B. | MrerrrreTe r e 20, 22

Cuisimano v. Metro Auto, Inc., 860 P.2d 532 (Col. Ct.

Ra. TOU sce ccvencckepentnnsenveee te eeseeis wes 18

District 5, United Mine Workers of Am. v. Weiss (In

re Weiss), 129 B.R. 51 (Bankr. W.D. Pa. 1991)...... 13

Evans v. Einhorn, 855 F.2d 1245 (7th Cir. 1988).. 11, 19, 22

Fugazy Continental Corp. v. NLRB, 725 F.2d 1416

(les S| Srp ee 20

General Motors Corp. v. Local 435, UAW, 546 A.2d

oR Bb. Peer oe ae 15

Goodman Piping Prods., Inc. v. NLRB, 741 F.2d 10

CO Cm. SHS) csc evnccccccrcecenevenrsesusnneeeaee 20

Goodwin v. Willard, 185 W. Va. 321, 406 S.E.2d 752

(EGOED i so ia ned Gecka cb43 x0 unt s eeee eee 17

TABLE OF CITATIONS - Continued

Page

Groves v. Ring Screw Works, Ferndale Fastener Div.,

498 U.S. 168 (1990) .......- cece cere eee eee eeeeees 25

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

(1976) . 0 cc cccccvcccveccrcrsrccevesecsesvecsccseees 25

IBEW, AFL-CIO v. Hechler, 481 U.S. 851 (1987)....-.. 10

In re District 2, United Mine Workers of America, 67

B.R. 883 (Bankr. W.D. Pa. 1986)......------++++55: 19

John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543

tC.” ) eer ree

Johnson v. Western Amusement Corp., 151 IIl.

App.3d 873, 510 N.E.2d 991 (1987)...------+++++ .. 18

Laborers Combined Funds v. Mattei, 359 Pa. Super.

399, 518 A.2d 1296, 1298.......---- seer eres 10, 14, 17

Lawrence v. Regal, Civ. A. No. 91-742, 1993 WL

652827 (W.D. Pa. Feb. 19, 1993)...----+--+++++: 13, 19

Lingle v. Norge Div. of Magic Chef, 486 U.S. 399

(TGOD) < ccccccccecce cestcccvcvcccccsscsesccvcceses 10

Local 174, Teamsters, Chauffeurs, Warehousemen and

Helpers of America v. Lucas Flour Co., 369 U.S. 95

(1962) 0 cvccccccesccevcensovesceressesecess 9, 11, 16

Local 921, Amalgamated Clothing and Textile Workers

Union v. Estate of Schmidt, 684 F.Supp. 601 (W.D.

Wis. 1968). ... 2... ccccccccceccceccccccercesecoress 26

Lowe v. Imperial Colliery Co., 180 W. Va. 518, 377

S.E.2d 652 (1988) ......- 2c cece cece cece etree eerees 14

Malone v. White Motor Corp., 435 U.S. 497 (1978)...... 7

Marsans v. Communications Workers of Am., 1989

43831 (D. D.C. Apr. 9, 1989)...---- eee cere errr ee 14

TABLE OF CITATIONS - Continued

Page

Mullins v. Venable, 171 W. Va. 92, 297 S.E.2d 866

CEPEED hc ccceccivddes vse tesckdeveseeouseabesbasanat 18

Nicholas v. St Agnes Medical Center, Civ. A. No.

84-5882, 1987 WL 5248 (E.D. Pa. Jan. 8, 1987)..... 13

NLRB v. Al Bryant, Inc., 711 F.2d 543 (3d Cir. 1983),

cert. denied, 464 U.S. 1039 (1984)................. 20

NLRB v. Deena Artware, Inc., 361 U.S. 398 (1960)..... 21

NLRB v. Fullerton Transfer & Storage Ltd., Inc., 910

Feats ek GO Gh SOc ees oe ccekecwewnhiceweeses 20

NLRB v. Greater Kansas City Roofing, 2 F.3d 1047

bo ee Per rrr err rere ee ee 20

Penntech Papers, Inc. v. NLRB, 706 F.2d 18 (1st Cir),

cert. denied, 464 U.S. 892 (1983).................. 20

Riley Aeronautics Corp., 178 NLRB 495 (1969)........ 22

Robbins v. Iowa Road Bldgs., Inc., 828 F.2d 1348 (8th

Ce, See os skceccecctcssénae tence nienn ceases 14

Samples v. Ryder Truck Lines, Inc., 755 F.2d 881

CREM OO. BOs vshotccscsisurownrepenremvarenes) 25

Sendi v. NCR Contem, Inc., 619 F. Supp. 1577 (E.D.

Pa. 1985), aff’d, 800 F.2d 1138 (3d Cir. 1986)...... 10

Scarbrough v. Perez, 870 F.2d 1079 (6th Cir. 1989) .... 21

Seymour v. Hull & Moreland Eng’g, 605 F.2d 1105

COU CO Dares 00:00 0 inees<peaveaneneeeneades 20

Shortt v. New Milford Police Dept., 212 Conn. 294,

SR ADA F CHG) 6660 cdtek hess ee 15

Vii

TABLE OF CITATIONS - Continued

Page

State ex rel. McCain v. Erdman, 607 P.2d 78 —

Ct. App. 1980) .....-.cececececceeccrecercrsercess 18

Textile Workers Union of Am. v. Lincoln Mills of

Alabama, 353 U.S. 448 (1957)....----++e eee ee eer eees 9

Wallitsch v. Corona Corp., Civ. A. No. 87-2239, 1988

WL 30037 (E.D. Pa. Sept. 28, 1988).......---++++:: 13

Ward v. Whelan, 18 Pa. D. & C. 3d 710 (Alleg. Cty.

| ee PP mnnn Tre Teer ee a, 14, 17

Weldon v. Kraft, Inc., 896 F.2d 793 (3d Cir. 1990)..... 10

Wheeler v. Graco Trucking Corp., 985 F.2d 108 (3d

Che TOFD cc cccccccccnrccccccensctneverresds 6, 12, 18

STaTuTES CITED:

2B U.S.C. § 1257 (A)... neces cccccrccccservcccsvrereces 1

29 U.S.C. §§ 142 and 185 ........--e eee errr rere recess 1

y Bk foe fn er oo 2

29 U.S.C. §§ 185 and 187 ......--.-ee rere rere e trees 4

Pa. Stat. Ann. tit. 43 §§ 260.1 et seq.......-------++ 2, 4

S.Rep. No. 105, 80th Cong., Ist Sess. 16 (1947)...... 24

93 Cong. Rec. 6283 (1947).....-----serere reer errr 24

is eee

por

es Le 8 al

PETITION FOR WRIT OF CERTIORARI TO

THE PENNSYLVANIA SUPREME COURT

The Petitioner, David Benjamin respectfully prays

that a writ of certiorari issue to review the judgment and

opinion of the Superior Court of Pennsylvania, entered in

the above-entitled proceeding on June 30, 1993.

OPINIONS BELOW

The order of the Pennsylvania Supreme Court deny-

ing Petitioner’s allowance of appeal (A1) is reported at

___ A.2d ___ (Pa. Mar. 28, 1994). The Pennsylvania Supe-

rior Court’s opinion (C1) is reported at 426 Pa. Super. 543,

627 A.2d 1186 (1993). The opinions of the Court of Com-

mon Pleas of Blair County, Pennsylvania (D1, E1, F1) are

not officially reported.

JURISDICTION

The Pennsylvania Supreme Court denied the Petition

for Allowance of Appeal in this case on March 28, 1994

(Al). The jurisdiction of this Court to review the decision

of the Pennsylvania Supreme Court is invoked under 28

U.S.C. § 1257(a).

STATUTES INVOLVED

The provisions of the Labor Management Relations

Act (“LMRA”) involved are 29 U.S.C. §§ 142 and 185. The

provision of the National Labor Relations Act (“NLRA”)

involved is 29 U.S.C. § 152. The provisions of the Pennsylva-

nia Wage Payment and Collection Law (“WPCL”) involved

are Pa. Stat. Ann. tit. §§ 260.2a, 260.8, 260.9a and 260.10. All

of these provisions are set forth in the Appendix (G1).

STATEMENT OF THE CASE

On October 1, 1984, Benjamin Coal Company

(“BCC”) filed for Chapter 11 bankruptcy. The Bankruptcy

Court for the Western District of Pennsylvania approved

a plan of reorganization on October 4, 1985. In recogni-

tion of BCC’s continuing financial difficulties, the

employees’ union, the United Mine Workers of America

(“UMW”), agreed to a “no-strike” provision in their Feb-

ruary 5, 1989 collective bargaining agreement.!

On June 21, 1989, the UMW directed pickets to BCC

job sites in a sympathy strike in support of Pittston

miners in West Virginia and Virginia. In support of this

sympathy strike, the employees of BCC left work before

completing their shift. Petitioner David J. Benjamin, the

president and principal stockholder of BCC, warned the

1 The no-strike provision in the February 5, 1989, collective

bargaining agreement reads as follows:

Failure to reach an agreement on pensions during

reopener negotiations shall entitle the parties to settle

such dispute by free collective bargaining as here-

tofore practiced in the industry which includes, but is

not limited to, the right to strike. Both parties recog-

nize the Union’s right to strike only over this issue

during the term of the Agreement.

employees that continued work stoppage would lead

BCC’s banks to freeze the company’s accounts. Despite

this warning, the walkout continued. On June 23, 1989,

BCC’s banks froze the Company’s funds, thus preventing

the employees from being paid. On June 30, 1989, BCC

was forced to convert its Chapter 11 bankruptcy action to

a Chapter 7 action.”

The UMW ffailed to file a timely claim for the

employees’ wages and benefits in the bankruptcy action.

Even after the bar date, the trustee twice offered to file

wage claims on behalf of the employees. Both of these

offers were rejected. The former employees of BCC have

filed a legal malpractice action against the union’s attor-

neys, alleging that the attorneys were negligent in filing

untimely claims. See Complaint, Eger v. Hillman, C.A. No.

91-2565 (W.D. Pa.).

On November 6, 1989, Respondents, two hundred

and twenty-nine former employees of BCC, instituted an

action against Petitioner for wages (for the period from

May 28 to June 21, 1989) and benefits (vacation time, sick

days, and monies withheld for the purchase of U.S. Sav-

ings Bonds). Respondents averred that Petitioner had

breached the collective bargaining agreement and vio-

lated the Pennsylvania Wage Payment and Collection

2 Contrary to the summary contained in the opinion of the

Pennsylvania Superior Court, 426 Pa. Super. at 548, 627 A.2d at

1189, the employees were not informed that there was no more

work until June 26, 1989, i.e., after the banks had already frozen

BBC’s bank accounts.

— A NO a

Law, Pa. Stat. Ann. tit. 43, § 260.1 et seq. (1992 & Supp.

1994) (“WPCL”).3

In the pleadings that followed, Petitioner averred

that federal labor laws preempted Respondents’ claims

against Petitioner, both because the claims were based on

the breach of a collective bargaining agreement governed

by the LMRA and because the claims were filed against

Petitioner in his personal capacity, rather than against an

“employer” as defined under the LMRA and the NLRA.

Petitioner also asserted defenses based on Respondents’

failure to file a timely bankruptcy claim, Respondents’

breach of the no-strike clause and Respondents’

unauthorized walkout which rendered BCC unable to pay

their wages. Respondents in turn averred that §§ 301 and

303 of the LMRA, 29 U.S.C. 185 and 187, preempted these

latter two defenses because they were based on the

breach of a collective bargaining agreement.

On July 17, 1992, the trial court entered summary

judgment for Respondents, holding that their work stop-

page was irrelevant to the determination of their wages

and benefits since the wages and benefits had already

been earned at the time of the walkout. The trial court

then rejected Petitioner’s preemption arguments by rely-

ing on a footnote in an opinion of the Court of Appeals

for the Third Circuit, which had summarily stated that

the contention that the LMRA preempted the WPCL was

“without merit.” See Carpenters Health & Welfare Fund v.

3 Plaintiffs’ Complaint attached the collective bargaining

agreement as an appendix, specifically referenced the agree-

ment in five different paragraphs and used the wage schedule of

the agreement to calculate the back wages and benefits.

ota

Kenneth R. Ambrose, Inc., 727 F.2d 279, 282 n. 5 (3d Cir.

1983). Lastly, the trial court held that the WPCL did not

require that Respondents exhaust their claims for relief

against the bankrupt BCC before pursuing WPCL claims

against Petitioner. The trial court subsequently entered

judgment for the employees in the amount of $477,434.26

wages and benefits and $36,309.29 in attorneys fees and

costs. The Court also held that because, in its opinion,

Benjamin had failed to raise a good faith defense,

Respondents were entitled to liquidated damages, in the

amount of $133,082.59, for a total judgment of

$646,826.14.

Petitioner appealed, again arguing that federal labor

law preempted Respondents’ WPCL claims against him.

In brief, Petitioner argued that the LMRA and the NLRA

preempted Respondents’ claims for three reasons: 1)

because Respondents’ WPCL action was based on the

breach of a collective bargaining agreement covered by

the LMRA; 2) because Petitioner had raised a defense

based on the breach of a collective bargaining agreement

covered by the LMRA; and 3) because Respondents had

not made the requisite factual averments necessary to

hold a corporate officer individually liable for the breach

of a collective bargaining agreement. Petitioner also chal-

lenged the lower court’s rejection of his defenses based

on Respondents’ illegal walkout and their failure to file

timely bankruptcy claims.

The Pennsylvania Superior Court affirmed. See Adam

v. Benjamin, 426 Pa. Super. 543, 627 A.2d 1186 (1993).

Relying on this Court’s opinion in Caterpillar, Inc. v. Wil-

liams, 482 U.S. 386, 394 (1987), the Pennsylvania Superior

Court began by stating that a state-law complaint for

breach of individual employment contracts is not “com-

pletely preempted” by § 301 of the Labor Management

Relations Act. See Adam, 426 Pa. Super. at 550 n. 4, 627

A.2d at 1190 n. 4. The Pennsylvania Superior Court then

held that Benjamin’s defenses based on the no-strike

clause in the collective bargaining agreement and

Respondents’ unauthorized walkout were precluded by

this Court’s opinion in Complete Auto Transit, Inc. v. Reis,

451 U.S. 401 (1981), which held that § 301 of the LMRA

does not allow an employer to seek damages against

individual employees who breached the no-strike provi-

sion of a collective bargaining agreement. Having held

that Complete Auto precluded Benjamin’s defenses, the

Pennsylvania Superior Court concluded that no inter-

pretation of the collective bargaining agreement was nec-

essary. Absent the need for such interpretation, the

Pennsylvania Superior Court held that Respondents’

WPCL claims were not preempted. See Adam, 426 Pa.

Super. at 553, 627 A.2d at 1191-92. The Pennsylvania

Superior Court also rejected Petitioner’s argument that

Respondents’ claims were barred by their failure to

exhaust their remedies against the bankrupt BCC. See Id.

at 554-55, 627 A.2d at 1193.

Petitioner filed a petition for allowance of appeal to

the Pennsylvania Supreme Court. In addition to the fed-

eral labor law preemption Precedents previously cited,

Petitioner relied on the recently-decided case of Wheeler v.

Graco Trucking Corp., 985 F.2d 108 (3d Cir. 1993,) reh’g

denied, (Feb. 18, 1993). In Wheeler, the Court of Appeals

for the Third Circuit departed from its previous prece-

dent by holding that federal labor law preempts an

employee’s WPCL claim for wages allegedly due under a

collective bargaining agreement. The Pennsylvania

“ee

Supreme Court denied the petition for allowance of

appeal without an opinion.

REASONS FOR GRANTING THE WRIT

Because Congress has never exercised authority to

occupy the entire field in the area of labor legislation, the

question whether a certain state action is preempted by

federal law is one of congressional intent. In Allis-

Chalmers Corp. v. Lueck, 471 U.S. 202 (1985), this Court

explained how this analysis applies in determining the

preemption scope of § 301 of the LMRA:

Congress did not state explicitly whether

and to what extent it intended § 301 of the

LMRA to pre-empt state law. In such instances

courts sustain a local regulation “unless it con-

flicts with federal law or would frustrate the

federal scheme, or unless the courts discern

from the totality of the circumstances that Con-

gress sought to occupy the field to the exclusion

of the States.” Id. at 208-209 quoting Malone v.

White Motor Corp., 435 U.S. 497, 504, 98 S.Ct.

1185, 1190 (1978).

Pennsylvania courts have repeatedly ignored this

Court’s § 301 preemption analysis by holding that state,

not federal, law determines when a corporate officer may

be held personally liable for the breach of a collective

bargaining agreement covered by the LMRA. But regard-

less of whether this Court agrees that Pennsylvania

courts have erred on this question, there is no denying

that the decisions of Pennsylvania courts are at the heart

of a conflict between state and federal courts on two

important issues of federai labor law. First, state and

federal courts are currently divided on the extent to

which § 301 of the LMRA preempts WPCL claims for the

breach of a collective bargaining agreement covered by

the LMRA. This split threatens to grow ever wider

because forty-eight states currently have WPCL statutes

that appear to allow state-law remedies for the breach of

collective bargaining agreements covered by the LMRA.

Second, state and federal courts are also currently split on

whether state or federal law governs when corporate

officers are personally liable for the breach of a collective

bargaining agreement. Once again, because twenty-nine

states have WPCL statutes that appear to permit the

imposition of personal liability on corporate officers, this

division should continue to grow.

The Pennsylvania Superior Court’s analysis of Com-

plete Auto Transit, Inc. v. Reis, 451 U.S. 401 (1981), does not

undermine the need to resolve these divisions. Because

Respondents’ claims under the WPCL against Petitioner

are preempted by § 301 of the LMRA, this Court need not

consider the validity under Complete Auto of Petitioner’s

defenses based on the no-strike clause and Respondents’

refusal to work. If, however, this Court chooses to reach

this issue, it should hold that these defenses are not

precluded by Complete Auto, which held only that § 301

damage actions against individual employees were so pro-

hibited. To hold otherwise would frustrate the federal

labor law scheme by affirming a parallel universe where

employees are given remedies and employers are strip-

ped of their defenses.

I. State and Federal Courts are Divided on Whether

§ 301 Preempts an Employee’s WPCL Claim for the

Breach of a Collective Bargaining Agreement Cov-

ered by the LMRA.

Federal and state courts are currently divided as to

which of two lines of this Court’s precedents govern the

preemption of state-law WPCL claims for the breach of a

collective bargaining agreement governed by the LMRA.

State courts in Pennsylvania and West Virginia have fol-

lowed one line of precedents in holding that § 301 of the

LMRA does not preempt state-law WPCL claims for the

breach of a collective bargaining agreement covered by

the LMRA unless interpretation of the collective bargain-

ing agreement is required. In direct conflict are the deci-

sions of the federal courts in these States and the Seventh

Circuit, which have emphasized another line of the

Court’s precedents in holding that federal labor laws

preempt all state-law WPCL claims for the breach of a

collective bargaining agreement covered by the LMRA.

The line of this Court’s precedents followed by fed-

eral Courts begins with this Court's decision in Textile

Workers Union of Am. v. Lincoln Mills of Alabama, 353 U.S.

448 (1957), which held that, by enacting § 301(a), Con-

gress intended to create a uniform body of federal law to

govern the enforcement of collective bargaining agree-

ments. Id. at 455. The impact of this decision was subse-

quently clarified by Charles Dowd Box Co. v. Courtney, 368

U.S. 502 (1962), and Local 174, Teamsters, Chauffeurs, Ware-

housemen and Helpers of America v. Lucas Flour Co., 369 U.S.

95 (1962). Charles Dowd Box held that concurrent state and

federal court jurisdiction exists over § 301 lawsuits. Lucas

Flour held that in either jurisdiction, the courts must

apply the federal common law which arises under § 301.

The line of this Court’s labor law precedents fol-

lowed by state courts begins with the expansion of the

preemptive effect of § 301 to include state law claims not

directly based on a collective bargaining agreement gov-

erned by the LMRA. Under these precedents, a state law

claim is not preempted unless it is “inextricably inter-

twined with consideration of the terms of the labor con-

tract.” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213

(1985) (state law tort claim). See also, IBEW v. Hechler, 481

U.S. 851, 857 (1987); Caterpillar Inc. v. Williams, 482 U.S.

386, 396 (1987); Lingle v. Norge Div. of Magic Chef, 486 U.S.

399 (1989) (claim under state worker’s compensation stat-

ute).

It is clear that an action under Pennsylvania’s WPCL

must be grounded upon the contract between the

employer and employee:

WPCL does not create a right to compensation.

Rather, it provides a statutory remedy when the

employer breaches a contractual obligation to

pay earned wages. The contract between the

parties governs in determining whether specific

wages are earned.

Weldon v. Kraft, Inc., 896 F.2d 793, 801 (3d Cir. 1990) (citing

Sendi v. NCR Contem, Inc., 619 F. Supp. 1577, 1579 (E.D.

Pa. 1985), aff'd, 800 F.2d 1138 (3d Cir. 1986), Laborers

Combined Funds v. Mattei, 359 Pa. Super. 399, 403, 518 A.2d

1296, 1298 (1986)). It is also clear that Respondents based

their WPCL claims on their collective bargaining agree-

ment with BCC: Respondents’ Complaint attached the

—

collective bargaining agreement as an appendix, speci-

fically referenced the agreement in five different para-

graphs and used the wage schedule of the agreement to

calculate the back wages and benefits. Because interpreta-

tion of the collective bargaining agreement is thus

unavoidable, the Lincoln Mills/Lucas Flour preemption

analysis applies to preempt Respondents’ claims. Accord-

ingly, the Pennsylvania Superior Court erred in holding

that Respondents’ WPCL claims were not preempted.

The federal courts that have considered the preemp-

tion of WPCL claims for the breach of a collective bar-

gaining agreement have followed the Lincoln Mills/Lucas

Flour analysis. As adopted by the Seventh Circuit in

Evans v. Einhorn, 855 F.2d 1245 (7th Cir. 1988):

There is no suggestion in any of these three

recent Supreme Court cases [Lueck, Heckler, or

Caterpillar] that the Lincoln Mills/Lucas Flour pre-

emption analysis for breaches of collective bar-

gaining agreements has been changed. In fact,

all three cases clearly differentiate between the

standard § 301 preemption analysis, and the

newer Allis-Chalmers analysis for preemption of

state law tort claims. Id. at 1251.

The Seventh Circuit also distinguished Lingle from the

standard § 301 analysis because the discharged employee

in Lingle had an independent cause of action for retalia-

tory discharge under a state worker’s compensation stat-

ute. Id. at 1246 n.1.

The Third Circuit also recently adopted the view that

this Court’s Lincoln Mills/Lucas Flour analysis governs the

preemption of WPCL claims for the breach of a collective

bargaining agreement.

[A]s the Supreme Court held in Local 174, Teams-

ters v. Lucas Flour Co., 369 U.S. 95, 102-06, 82 S.

Ct. 571, 576-78, 7 L.Ed.2d 593 (1962), federal

labor law preempts state-law claims for breach

of a collective bargaining agreement covered by

the LMRA. . . . Stressing the need for a single,

comprehensive, and uniform body of federal

law to govern labor-management relations, the

Court wrote: “With due regard to the many

factors which bear upon competing state and

federal interests in this area... , we cannot but

conclude that in enacting § 301 Congress

intended doctrines of federal labor law uni-

formly to prevail over inconsistent local rules.”

Id. at 104, 82 S. Ct. at 577. Thus, it has been

settled since Lucas Flour that a state-law claim

for breach of a collective bargaining agreement

subject to the LMRA is preempted by federal

labor law.

Wheeler v. Graco Trucking Corp., 985 F.2d 108, 112-113 (3d

Cir. 1993), reh’g denied, (Feb. 18, 1993).

Having reviewed these precedents, the Third Circuit

correctly held that

Wheeler’s [state-law] claim is based squarely on

the terms-of the collective bargaining agreement

and therefore is governed exclusively by federal

law. Id. at 113.

The Wheeler decision confirmed the prediction of the

lower courts in the Third Circuit that this Court’s deci-

sion in Lueck had undermined previous Third Circuit

area teatime tiietiiia laine

precedent that cursorily concluded that the LMRA did

not preempt the WPCL.4

The Fourth Circuit has also concluded that the LMRA

preempts all state-law WPCL claims based on collective

bargaining agreements. In holding that the LMRA pre-

empted the former employees’ WPCL action seeking sev-

erance pay and unpaid vacation benefits, the Fourth

Circuit explained its rationale as follows:

The West Virginia statute provides various pro-

cedures and remedies, such as liquidated dam-

ages, attorney’s fees, and a generous statute of

limitations, to facilitate an employee’s collection

of wrongfully withheld pay and wages. The

statute does not, however, grant any entitle-

ments to pay or wages, and the appellants have

not contended that it does. Thus, despite their

assertions that their claims arise wholly under

the West Virginia statute, the appellants’ com-

plaint in state court shows that any substantive

right they might have to recovery of vacation

and severance pay would require interpretation

of the collective bargaining agreement. Under

the doctrine of Lingle v. Norge Division of Magic

Chef, Inc., 486 U.S. 399 (1988), those claims are

therefore preempted: “[A]pplication of state law

is preempted by § 301... . if such application

4 See, e.g., Baron v. National Standard Co., Civ. A. No. 93-

CV-4953, 1994 WL 158883 (E.D. Pa. Apr. 28, 1994); Lawrence v.

Regal, Civ. A. No. 91-742, 1993 WL 652827 (W.D. Pa. Feb. 19,

1993), aff'd 19 F.3d 643 (3d Cir. 1994); District 5, United Mine

Workers of Am. v. Weiss (In re Weiss), 129 B.R. 51 (Bankr. W.D. Pa.

1991); Rimkus v. Atlantic Richfield Co., Civ. A. No. 88-5640, 1989

WL 54023 (E.D. Pa. May 18, 1993); Wallitsch v. Corona Corp., Civ.

A. No. 87-2239, 1988 WL 30037 (E.D. Pa. Sept. 28, 1988); Nicholas

v. St. Agnes Medical Ctr., Civ. A. No. 84-5882, 1987 WL 5248 (E.D.

Pa. Jan. 8, 1987).

requires the interpretation of a collective-bar-

gaining agreement.” Barton v. Creasey Co. of

Clarksburg, 900 F.2d 249, 1990 WL 36773, *2 (4th

Cir. Mar. 13, 1990), cert. denied, __ U.S. __, 111

S.Ct. 137 (1990).

See also Robbins v. Iowa Road Bldgs., Inc., 828 F.2d 1348,

1354 n.4 (8th Cir. 1987), cert. denied, 487 U.S. 1234 (1988)

(citing approvingly in dicta Seventh Circuit decision

holding federal labor law preempts WPCL claims); Mar-

sans v. Communications Workers of Am., Civ. A. No.

87-0782, 1989 WL 43831 (D. D.C. Apr. 9, 1989) (holding

§ 301 preempts District of Columbia statutory wage claim

based on collective bargaining agreement).

In contrast to these Federal decisions, Pennsylvania

courts repeatedly have refused to preempt WPCL claims

based on the breach of a collective bargaining agreement

covered by the LMRA.°* In this case, the Pennsylvania

Superior Court held that § 301 did not preempt Respon-

dents’ WPCL claims because the court concluded that no

interpretation of the collective bargaining agreement was

necessary. Despite the frequency with which this issue

has arisen and the conflict that exists between Pennsylva-

nia state and federal courts on this issue, the Pennsylva-

nia Supreme Court denied Petitioner’s petition for

allowance of appeal without an opinion.

The Supreme Court of West Virginia has similarly

held that the LMRA does not always preempt a state law

5 See, e.g., Laborers Combined Funds of Western Pennsylvania

v. Mattei, 359 Pa. Super. 399, 518 A.2d 1296 (1986); Amal. Cotton

Garment & Allied Indus. Fund v. Dion, 341 Pa. Super 12, 491 A.2d

123 (1985); Ward v. Whalen, 18 Pa. D. & C. 3d 710 (1981).

remedy based on the breach of a collective bargaining agree-

ment. In Lowe v. Imperial Colliery Co., 180 W. Va. 518, 377

S.E.2d. 652 (1988), the West Virginia Supreme Court held that

the LMRA did not preempt the employees’ state WPCL

claims for vacation pay provided for in the collective bar-

gaining agreement. And in Ash v. Raven Metal Prods., Inc., 190

W. Va. 90, 437 S.E.2d 254 (1993), the West Virginia Supreme

Court confirmed this holding even where there was an

applicable arbitration clause in the contract:

Preemption of state laws does not occur every time

a collective bargaining agreement forms the basis

of a state law claim, but rather, “ ‘only if such

application requires the interpretation of a collec-

tive bargaining agreement.’” 437 S.E.2d at 259.

Courts in Illinois, Nebraska, Connecticut and Dela-

ware have also indicated an unwillingnes. to preempt

WPCL claims based on collective bargaining agreements.

See, Brazinski v. Transport Service Co., 159 Ill. App.3d 1061,

513 N.E.2d 76 (1987); Babb v. United Food and Commercial

Workers District Union, 233 Neb. 826, 448 N.W.2d 168

(1989); Shortt v. New Milford Police Dept., 212 Conn. 294,

562 A.2d 7 (1989); General Motors Corp. v. Local 435, UAW,

546 A.2d 974 (Del. 1988). And while other state courts

may not have specifically addressed the preemption of

state WPCL statutes by § 301, forty-eight states have

WPCL statutes that appear to provide remedies for the

breach of collective bargaining agreements covered by

the LMRA.® The potential for conflict is thus enormous.

In sum, state and federal courts are currently split

concerning when the LMRA preempts state-law WPCL

6 See Appendix H.

claims based on the breach of a collective bargaining

agreement covered by the LMRA. State courts in Pennsyl-

vania and West Virginia have followed this Court’s Lueck/

Caterpillar/Lingle precedents by holding that § 301 does

not preempt state-law WPCL claims for the breach of a

collective bargaining agreement unless “interpretation”

of the collective bargaining agreement is required. In

direct conflict are the decisions of the Federal courts in

these States and the Seventh Circuit, which have followed

this Court’s Lincoln Mills/Lucas Flour precedents by hold-

ing that federal labor laws preempt all state-law WPCL

claims for the breach of a collective bargaining agreement

covered by the LMRA. Because State and Federal courts

are so divided on an issue concerning the breach of a

collective bargaining agreement governed by the LMRA -

an issue central to our federal labor law scheme - this

Court should grant certiorari to resolve this conflict.

II. State and Federal Courts are Also Split on the Per-

sonal Liability of Corporate Officers for the Breach

of a Collective Bargaining Agreement Covered by

the LMRA.

State and federal Courts are also currently divided on

the personal liability of corporate officers for the breach

of a collective bargaining agreement covered by the

LMRA. Courts in Pennsylvania and West Virginia have

diverged from the opinions of federal courts in the Third

and Seventh Circuits that have held that the federal labor

law definition of “employer” preempts the definition

found in state WPCLs. The impact of this distinction is

significant, for federal courts have long held that corpo-

rate officers are not personally liable for the breach of a

collective bargaining agreement absent a showing suffi-

cient to pierce the corporate veil.

Despite this formidable body of federal case law, the

lower courts in this case held Petitioner personally liable

without any showing that the corporate veil should be

pierced. Indeed Pennsylvania state courts have repeat-

edly found corporate officers personally liable without

any showing sufficient to pierce the corporate veil. As

stated by the Pennsylvania Superior Court in Laborers

Combined Funds v. Mattei,

Of those courts which have had occasion to rule

on the personal liability of corporate officers in

the face of a corporation’s failure to make its

required contributions to various union funds,

as provided for in their collective bargaining

agreement, all have, without exception, held the

officer(s) of the corporation personally liable,

and they did so without reference to any proof

of culpability or scienter as a sine qua non to

establishing a contravention of the Act in a civil

suit.

359 Pa. Super. 399, 407, 518 A.2d 1296, 1300-01 (1986).’

In Goodwin v. Willard, 185 W. Va. 321, 406 S.E.2d 752

(1991), the Supreme Court of West Virginia reached a

similar decision.

7 See, e.g., Amalgamated Cotton Garment and Allied Indus.

Fund v. Dion, 341 Pa. Super. 12, 491 A.2d 123 (1985); Amalgamated

Cotton Garment and Allied Indus. Fund v. Campolong, 317 Pa.

Super. 150, 463 A.2d 1129 (1983); Ward v. Whelan, 18 Pa. D. & C.

3d 710 (C. P. Allegheny Co. 1981).

An officer in the management of a corporation

who knowingly permits the corporation to vio-

late the provisions of the Wage Payment and

Collection Act, W. Va. Code, Sections 21-5-16

(1981) (Replacement Vol.), may be held person-

ally liable for unpaid wages, fringe benefits and

liquidated damages under W. Va. Code, Section

21-5-4. 406 S.E.2d at 757.

See, also Mullins v. Venable, 297 S.E.2d 866 (W. Va. 1982).

Courts in Colorado, Illinois, New Hampshire and Kansas

also have held corporate officers personally liable for

WPCL judgments absent a showing sufficient to pierce

the corporate veil. See Cusimano v. Metro Auto, Inc., 860

P.2d 532 (Col. Ct. App. 1992); Johnson v. Western Amuse-

ment Corp., 151 Ill. App.3d 873, 510 N.E.2d 991 (1987);

Caswell v. BLI Genetics, Inc., 121 N.H. 1048, 437 A.2d 321

(1981); State ex rel. McCain v. Erdman, 607 P.2d 78 (Kan. Ct.

App. 1980). In all, twenty-nine states have statutes that

impose personal liability on corporate officers absent a

showing sufficient to pierce the corporate veil.®

These decisions are in conflict with the decisions of

federal courts in the Third Circuit that have held that the

definition of “employer” in the LMRA and NLRA pre-

empts the definition in the WPCL. While the WPCL claim

in Wheeler v. Graco Trucking Corp., 985 F.2d 108 (3d Cir.

1993), reh’g denied, (Feb. 18, 1993), was brought against

the corporation rather than an officer in his individual

capacity, the Third Circuit did state in dicta that the

WPCL definition of employer was “subsumed within the

federal common law.” 985 F.2d at 114, n.2. This dicta

8 See Appendix I.

ee eS

confirms the persuasive analysis earlier adopted by lower

courts in the Third Circuit. As stated by the Bankruptcy

Court for the Western District of Pennsylvania in In re

District 2, United Mine Workers, 67 B.R. 883 (Bankr. W.D.

Pa. 1986):

Clearly then, the questions of “employer” and

“employee” status are paramount concerns of

the federal labor scheme - for if one is found not

to be an “employer” or “employee,” the remain-

der of the labor statute’s provisions may be

completely inapplicable .. . .

While there remain some areas of labor law

which are not controlled by federal legislation,

the determination as to whether parties are

under the auspices of said legislation is of reg-

nant concern, and in this particular respect, it

appears that Congress has chosen to occupy the

field to the exclusion of the States. Id. at 886.

See also Lawrence v. Regal, Civ. A. No. 91-742, 1993 WL

652827 (W.D. Pa. Feb. 19, 1993); In re Weiss, 129 B.R. 51

(Bankr. W.D. Pa. 1991).

The decisions of state courts are also in conflict with

the Seventh Circuit which has held that officer liability

for a WPCL claim for the breach of a collective bargaining

agreement must be resolved by reference to federal com-

mon law. In Evans v. Einhorn, 855 F.2d 1245 (7th Cir. 1988),

the Seventh Circuit adopted the reasoning of the district

court in holding that an employee could not use the

Illinois WPCL to enforce a federal labor arbitration award

against an individual officer. In reaching this decision the

district court had characterized the employee's attempt to

use the Illinois WPCL to enforce a federal labor arbitra-

tion award as “a straight forward § 301 breach of a

collective bargaining agreement action.” Id. at 1256.

“The question of from whom an arbitration

award can be collected falls within the federal

common law governing enforcement of arbitra-

tion awards. The Court further holds that officer

or other third-party liability for federal labor

arbitration awards must be resolved by refer-

ence to the federal labor common law created by

Congress with the enactment of § 301(a), and is

not a subject which Congress intended to be left

to state regulation. See John Wiley & Sons, Inc. v.

Livingston, 376 U.S. 543, 548, 84 S.Ct. 909, 914 [11

L.Ed.2d 898] (1964) (federal law governs issues

as to successor corporation’s duty to honor arbi-

tration provision contained in collective bar-

gaining agreement between union and merged

corporation in action brought under § 301(a)).

Id. at 1255.

The Courts of Appeals agree that “[w]hether a com-

pany or individual is responsible for the financial obliga-

tions of another company or individual is a question of

federal law when it arises in the context of a federal labor

dispute.” NLRB v. Fullerton Transfer & Storage Ltd., Inc.,

910 F.2d 331, 325 (6th Cir. 1990).9 As this Court has stated,

See also NLRB v. Greater Kansas City Roofing, 2 F.3d 1047,

1051 (10th Cir. 1993); Contractors, Laborers, Teamsters and Engi-

neers Health and Welfare Plan v. Hroch, 757 F.2d 184, 190 (8th Cir.

1985); Fugazy Continental Corp. v. NLRB, 725 F.2d 1416 (D.C. Cir.

1984); Goodman Piping Prods., Inc. v. NLRB, 741 F.2d 10 (2d Cir.

1984); NLRB v. Al Bryant, Inc., 711 F.2d 543 (3d Cir. 1983) cert.

denied, 464 U.S. 1039 (1984); Penntech Papers, Inc. v. NLRB, 706

F.2d 18 (1st Cir.), cert. denied, 464 U.S. 892 (1983); Seymour v. Hull

& Moreland Eng’g, 605 F.2d 1105, 1109 (9th Cir. 1979).

“(t]he insulation of a stockholder from the debts and

obligations of his corporation is the norm, not the excep-

tion.” NLRB v. Deena Artware, Inc., 361 U.S. 398, 402-03

(1960). In extreme circumstances, the personal assets of a

controlling shareholder may be attached to satisfy the

debts and liabilities of the corporation. However, the

corporate veil should be pierced only reluctantly and

cautiously. Cascade Energy and Metals Corp. v. Banks, 896

F.2d 1557, 1576 (10th Cir.), cert. denied, 498 U.S. 849 (1990).

Although there is no one test for deciding when to disre-

gard the corporate form and bind the owner-operators of

a closely-held corporation, most cases can be decided by

reference to three factors first enunciated by a panel of

the Ninth Circuit:

Viewing the jumble of federal decisions

together, we find a sort of generalized federal

substantive law of disregard of corporate entity

which concentrates on three general factors: the

amount of respect given to the separate identity

of the corporation by its shareholders, the

degree of injustice visited on the litigants by

recognition of the corporate entity, and the

fraudulent intent of the incorporators. Seymour

v. Hall & Moreland Eng’g, 605 F.2d 1105, 1111 (9th

Cir. 1979).

The mere fact that a corporation breaches a contract

does not mean that the individual shareholders of the

corporation should be held personally liable. To the con-

trary, the corporate form of doing business is typically

selected precisely so that the individual shareholders will

not be liable. Nor is the mere fact that the company

ceased operations without being able to pay all of its

debts the sort of injustice sufficient to pierce the corpo-

rate veil. See Scarbrough v. Perez, 870 F.2d 1079, 1084 (6th

Cir. 1989); Contractors, Laborers, Teamsters and Engineers

Health and Welfard Plan v. Hroch, 757 F.2d 184, 191 (8th Cir.

1985). This form of “injustice” is present in most cases

involving a bankrupt entity. Instead, the individual who

is sought to be charged personally with corporate liability

must have shared in the moral culpability or injustice.

As stated by the district court in Evans v. Einhorn, 855

F.2d 1245 (7th Cir. 1988):

A uniform federal common law to resolve offi-

cer and third-party liability for labor arbitration

awards is no less important to the national labor

policy implemented by Congress than is the uni-

form federal law governing actions to compel

arbitration, or the uniform federal law govern-

ing actions to enforce arbitration awards. Cer-

tainty and uniformity in the area of officer and

third-party liability for labor arbitration awards

are desirable because they will encourage labor

and management to enter into collective bar-

gaining agreements containing binding arbitra-

tion and no-strike provisions. Id., at 1256.

Accordingly, this Court should conclude, as did the

NLRB in Riley Aeronautics Corp., 178 NLRB 495 (1969),

that

[tlo require [the individual] to make good the

corporation’s backpay liability out of [his] per-

sonal funds would operate to defeat the very

purpose of [his] incorporating the business to

escape individual liability. If the corporate funds

are insufficient to meet the backpay obligation,

[Respondents’] recourse is that of ‘creditor[s],’

which includes enforcing the claim in insol- )

vency or bankruptcy proceedings. Id., at 501. ;

In sum, the decisions of state courts holding that the

WPCL can be used to impose personal liability on indi-

vidual officers for the breach of a collective bargaining

agreement are in direct conflict with decisions of federal

courts in the Third and Seventh Circuit. The decisions of

the state courts are also in conflict with a formidable

body of federal case law that forbids the imposition of

personal liability on a corporate officer for the breach of a

collective bargaining agreement absent a showing suffi-

cient to pierce the corporate veil. There can be little doubt

that the identity of the primary participants in the federal

labor scheme is of paramount concern to that system.

Accordingly, this Court should grant this Petition for

Certiorari to resolve the division that currently exists

between state and federal courts on this important issue

of federal labor law.

III. The Pennsylvania Superior Court's Misreading of

Complete Auto Transit, Inc. v. Reis Does Not

Diminish the Reasons for Granting the Writ.

As set forth above, federal labor law preempts

Respondents’ claims under the WPCL, both because they

seek a remedy for the breach of a collective bargaining

agreement covered by the LMRA and because they seek

to hold a corporate officer personally liable for such a

breach absent a showing sufficient to pierce the corporate

veil. Because Respondents’ claims are so preempted, the

Pennsylvania Superior Court erred by entering judgment

for Respondents on the basis that Complete Auto pre-

cluded Petitioner’s defenses.

Moreover, as foreshadowed in the above discussion con-

cerning the piercing of the corporate veil, the Pennsylvania

Superior Court’s Complete Auto holding was as ironic as it

was unnecessary. As stated in Atkinson v. Sinclair Refining Co.,

370 U.S. 238, 249 (1962), § 301 “evidences ‘a congressional

intention that the union as an entity, like a corporation,

should in the absence of agreement be the sole source of

recovery for injury inflicted by it.’” In short, the purpose of

Complete Auto was to place union members on equal footing

with the individual shareholders and officers of the

employer company so that federal labor laws would be a

carefully balanced battle between the Company and the

Union.'° The Pennsylvania Superior Court has ironically

invoked Complete Auto to destroy that balance.

10 See Complete Auto Transit, Inc. v. Reis, 451 U.S. 401, 426

(1981) (Burger C.J., joined by Rehnquist then-J., dissenting)

(“Congress intended this provision to give union members a

protection analogous to that afforded stockholders in corpora-

tions against personal liability for corporate acts); Combs v.

Indyk, 554 F.Supp. 573, 575 (W.D. Pa. 1982) (“insulation of corpo-

rate officers and agents from liability for section 301 violations

was, in part, a basis for the parallel insulation of officers and

members of local unions from liability for section 301 viola-

tions”); S.Rep. No. 105, 80th Cong., 1st Sess. 16 (1947) (“mem-

bers of the union would secure all the advantages of limited

liability without incorporation”); 93 Cong. Rec. 6283 (1947)

(Rep. Case of South Dakota: “The objection to suits against labor

organizations has stemmed from a proper resentment against

the travesty that took place in the old Danbury Hatters case

where individual members of a union were harried and their

property attached to satisfy a judgment for action taken by

officers whom they did not control. It was as bad as such action

would be against minority and individual stockholders of a

corporation for acts they could not control.”).

Lastly, and most importantly, the Complete Auto por-

tion of the Pennsylvania Superior Court's decision is not

only superfluous and ironic — it’s wrong. This Court's

opinion in Complete Auto prohibited the imposition of a

damages remedy against individual employees. This hold-

ing was not intended to deprive employers of other

remedies or defenses. As stated by the majority in Com-

plete Auto, “an employer may discharge, or otherwise

discipline, an employee who unlawfully walks off the

job.” Complete Auto, 451 U.S. at 417 n. 18. This Court

recently reaffirmed this principle by stating that “[wlJe

have squarely held that § 301 authorizes suits by and

against individual employees as well as between unions and

employers.” Groves v. Ring Screw Works, Ferndale Fastener

Div., 498 U.S. 168, 172 (1990), citing Hines v. Anchor Motor

Freight, Inc., 424 U.S. 554, 562, (1976) (emphasis added).

Cf. Atkinson v. Sinclair Refining Corp., 370 U.S. 238, 244,

(1962) (discussing without condemnation arbitration pro-

ceeding in which employer was alleged to have withheld

employees’ wages as discipline for breach of their no-

strike clause).

The fact that Petitioner’s assertion of defenses based

on the no-strike clause and refusal to work may indirectly

impose “damages” against Respondents by depriving

them of their wages and benefits is irrelevant. Numerous

courts have allowed employers’ to assert defenses based

on failure to exhaust grievance procedures or the expira-

tion of § 301’s statute of limitations.!! These courts have

11 See, e.g., Samples v. Ryder Truck Lines, Inc., 755 F.2d 881

(11th Cir. 1985); Baron v. National Standard Co., Civ. A. No. 93-

CV-4953, 1994 WL 158883 (E.D. Pa. Apr. 28, 1994); Barton v.

not invoked Complete Auto to nullify these defenses,

despite the fact that these defenses have “indirectly”

imposed “damages” against the employees by defeating

their claims for wages and benefits.

Even if this Court were to hold that LMRA § 301 does

not preempt an employee’s WPCL claims for the breach

of a collective bargaining agreement governed by the

LMRA, it would be incorrect to hold that an employer’s

defenses based on state law or clear violations of the

agreement are “preempted.” Under this Court’s labor law

precedents, a state law cannot be sustained where it

“frustrate[s] the federal scheme,” Allis-Chalmers Corp. v.

Lueck, 471 U.S. 202, 209 (1985) (quotation omitted). It is

hard to imagine a state regulation more frustrating to the

carefully balanced federal scheme than one that estab-

lishes a parallel universe in which employees are vested

with additional weapons, while employers have their

weapons “preempted.” Accordingly, if this Court holds

that LMRA § 301 does not preempt an individual

employees’ WPCL claims for the breach of a collective

bargaining agreement covered by the LMRA, it must

similarly insulate an individual employer’s state-law

defenses.

In sum, the Pennsylvania Superior Court erred in

holding that Respondents’ claims were not preempted

because of this Court’s holding in Complete Auto. The

possible preclusion of Petitioner’s defense is irrelevant to

Creasey Co. of Clarksburg, 718 F. Supp. 1284 (N.D. W. Va. 1989),

aff'd, 900 F2d. 249, cert. denied, 498 U.S. 849 (1990); Local 921,

Amalgamated Clothing and Textile Workers Union v. Estate of

Schmidt, 684 F.Supp. 601 (W.D. Wis. 1988).

whether Respondents’ claims are preempted. Furthermore,

this Court’s holding in Complete Auto precludes only § 301

‘amage actions against individual employees, not defenses.

Lastly, even if this Court were to hold that Respondents’

claims are not preempted, it should similarly insulate

Petitioner’s defenses, since to hold otherwise would frus-

trate the federal labor law scheme.

+ —

CONCLUSION

For the foregoing reasons, a writ of certiorari should

be issued to the Superior Court of Pennsylvania.

Of Counsel: Respectfully submitted,

Cart A. BELIN, JR. H. Wooprurr TURNER

15 North Front Street KIRKPATRICK & LOCKHART

Clearfield, PA 16830 1500 Oliver Building

(814) 765-8972 Pittsburgh, PA 15222

(412) 355-6500

Attorneys for Petitioner,

David Benjamin

APPENDIX A

The Supreme Court of Pennsylvania

Western District

CHarRLes W. JoHNs, Esquire 801 City-County Building

Prothonotary Pittsburgh, Pa.

IrnMA T. GARNDER 15219-2463

Deputy Prothonotary (412) 565-2816

March 28, 1994

Carl A. Belin, Jr., Esquire

BELIN & KUBISTA

15 North Front Street

Clearfield, PA 16830-0001

In Re: Thomas Adam, et al. v. David Benjamin, Harry

Benjamin and Sally Benjamin, a/k/a Sally Gold

v. International Union, United Mine Workers of

America

Petition of: David Benjamin

No. 0559 W. D. Allocatur Docket 1993

Dear Mr. Belin:

The Court has entered the following Order on your

Petition for Allowance of Appeal filed in the above-

captioned matter:

“PER CURIAM:

AND NOW, this 28th day of March, 1994,

the Petition for Allowance of Appeal is hereby

denied.

Mr. Justice Frank J. Montemuro is sitting by

designation as Senior Justice pursuant to Judi-

cial Assignment Docket No. 94 R1800, due to the

unavailability of Mr. Justice Rolf Larsen, see No.

127 Judicial Administration Docket No. 1, filed

October 28, 1993.”

Very truly yours,

/s/ Irma T. Gardner

DEPUTY PROTHONOTARY

ITG:11b

ce: Claudia Davidson, Esquire

William Manion, Esquire

2 on i

APPENDIX B

THE SUPERIOR COURT OF PENNSYLVANIA

SITTING AT PITTSBURGH

Davip A. SZEWCZAK, ESQUIRE 1015 Grant Building

Prothonotary Pittsburgh, Pa. 15219

ELEANOR R. VALECKO (412) 565-7592

Deputy PROTHONOTARY

August 31, 1993

Carl A. Belin, Jr., Esquire

15 North Front St.

Clearfield, Penna. 16830

In Re: Thomas Adam, et al. v. David Benjamin, et al. v.

International Union, et al.

No. 1652 Pittsburgh, 1992 -

Dear Mr. Belin:

The Court has entered the following order on your

application for reargument/reconsideration of the above-

captioned matter:

ORDER OF COURT

“The court hereby denies the application filed

July 14, 1993, requesting reargument or recon-

sideration of the decision dated June 30, 1993.

Date: August 31, 1993 Per Curiam”

Very truly yours,

/s/ Eleanor R. Valecko

DEPUTY PROTHONOTARY

ERV:bnl

cc: Claudia Davidson, Esq.

William Manion, Esq.

Hon. Norman Callan

APPENDIX C

SUPERIOR COURT OF PENNSYLVANIA

PITTSBURGH DISTRICT

THOMAS ADAM, et al

-V-

DAVID BENJAMIN, et al

) Jan

INTERNATIONAL UNION, UNITED

MINE WORKERS OF AMERICA,

APPEAL OF: DAVID BENJAMIN

NO: 1652 PITTSBURGH, 1992

JUDGMENT

ON CONSIDERATION WHEREOF, it is now here

ordered and adjudged by this Court that the judgment of

the Court of Common Pleas of BLAIR County be, and the

same is hereby AFFIRMED.

BY THE COURT:

/s/ Eleanor R. Valecko

DEPUTY PROTHONOTARY

DATED: June 30, 1993

ADAM v. BENJAMIN

[426 Pa.Superior Ct. 543, (1993).]

627 A.2d 1186

Thomas ADAM, Thomas Bailey, Andrew Bak-

aysa, Charles Bakaysa, John Bakaysa, Edward

Barrett, Carl Baum, Clair Baum, Jack Baum, Jack

Baumgartner, James Beatty, Carl Beck, Evertt

Bell, Gregg Bell, Thomas Bell, Albert Bell,

Donald Bennett, Fred Bennett, Raymond Ben-

nett, Richard Bennett, Ronald Bennett, Barney

Bensky, Robert Berlin, John Bishop, Harry Biss,

L. Carl Blake, Walter Blume, William Blume,

Gray Bond, Dennis Bouch, Ronald Bouch, Dar-

ryl Bowser, Paul Bracken, Robert Bracken,

Christopher Bracken, Christopher Brink, Daniel

Brink, Glen Brink, James Brink, Dale Brooks,

Edgar Brothers, James Buck, William Buck, Rich-

ard Byers, Ernest Cauldwell, Brian Cameron,

Jeff Cameron, Kevin Cameron, Albert Chiplis,

Franklin Clark, Roy Clark, William Clark, James

Clutter, William Collins, Joseph Craft, John

Curry, Edwin Daugherty, Edward Davies, Terry

Davies, Richard Delp, Bernard Diehl, Norman

Diehl, Charles Dillon, Donald Dimmick, Robert

Dufour, David Eger, William Eneminger, Gary

Farmery, William Farmery, Douglas Feaster,

Irvin Feaster, Jay Fishel, William Fleming, Del-

wyn Fry, Donald Fyock, Gregory Gardner, Myrel

Gardner, Thomas Gardner, Roger Geist, Kenneth

Gilbert, Ronald Gill, Joseph Glass, Jr., Joseph

Glass, Sr., John Gowin, Andrew Haag, Charles

Haag, Leslie Hamilton, Russell Harpster, Walter

Hauck, Daniel Hewitt, John Hewitt, David

Hoover, Richard Hurd, Gerald Hutton, Robert

Hutton, Robert Johns, James Johnson, Ronald

Johnston, Thomas Kawa, Clair Keller, Jeffrey

Kelly, Albert Kitchen, Arthur Kitchen, David

Kitchen, George Kitchen, Guy Kitchen, Larry

Kitchen, Sherman Kitchen, Jerry Kline, Paul

Kovalchik, Sherman Krause, Barry Kruise,

Donald Kruise, Ronald Kruise, Terry Kruise,

George Kurtz, Danny Kutruff, Melvin Leamer,

Andrew Lechene, Robert Lee, Terry Lender,

Alan Lewis, David Lewis, Theron Lewis, Wil-

liam Lewis, David Lightner, Kevin Lockett,

Byron Long, David Long, Paul Long, Douglas

Lucas, Charles Lunger, David Lydic, Ernest

Lyons, Thomas Mahaffey, Sterry Mahaffey, Jr.,

Leonard Martin, Willis Maruna, John Matia, Jos-

eph Mazenko, Jack McCraken, Thomas

McCraken, Thomas McElleny, Eldon McGarry,

Donald McGarvey, John Thomas McGee, Wil-

liam Wallace McGee, Ronald Meckley, Terry Mil-

ler, James Mills, David Moore, James Mowery,

Martin Mulhollen, Thomas Nellen, Jerome Nev-

ling, Joel Martin Passmore, Charles Peach,

Robert Pearce, Charles Pennington, Robert Pen-

nington, Ronald Phillipi, Ivan Pierce, Thomas

Pontzner, David Queen, Richard Queen, Robert

Reitz, Dennis Robbins, Eugene Romagna, John

Rose, Charles Ross, John Ross, Thomas Ross,

Randy Rowles, Harry Rogh, Donald Sheeder,

Larry Schomo, Robert Schomo, Vernon Sim-

mons, Robert Sinclair, Donald Smeal, Garry

Smeal, Phillip Smeal, Robert Smeal, Dennis

Smith, John Smith, Robert Smith, Raymond

Smyers, Richard Snyder, Joseph Soltys, Thomas

Spangle, Duane Spencer, Ronald States, Arthur

Stiver, Harold Stiver, Irvin Stiver, Duane Strong,

Donald Sunderland, Thomas Swauger, James

Taylor, Gerald Timchak, Edward Tkacick, Jerbert

Von Scoyoc, Lewis Wagner, Michael Wagner,

cit ii tii i et i I lt tl

Ronald Wagner, Russell Wallace, George War-

holic, Robert Washic, John Weaver, Daniel Webs-

ter, Ellis Westover, Gordon Westover, James

Westover, Lemoine Westover, Joseph Whitton,

Charles Wilkinson, Frank Williams, Thomas Wil-

liams, Robert Witherite, Robert Woods, Michael

Wright, Robert Wright, Dale Yarger, Gary

Yarger, Kenneth Yarger, Dennis Young, John

Young and Larry Young

David BENJAMIN, Harry Benjamin and

Sally Benjamin, a/k/a Sally Gold

INTERNATIONAL UNION, UNITED MINE

WORKERS OF AMERICA,

Appeal of David BENJAMIN.

Superior Court of Pennsylvania.

Argued April 15, 1993.

Filed June 30, 1993.

Reargument Denied Aug. 31, 1993.

Employees brought action against officers/directors

of employer, including individual who was president and

treasurer of board of directors, seeking wage recoupment

under state Wage Payment and Collection Law (WPCL).

The Court of Common Pleas, Blair County, Civil Division,

No. 89-CD-1925, Callan, J., granted employees motion for

summary judgment, and defendants appealed. The Supe-

rior Court, No. 1652 Pittsburgh 1992, Popovich, J., held

that employees’ state-law wage recoupment claim was

not preempted by federal labor law as resolution of claim

did not necessitate an interpretation of collective bargain-

ing agreement.

Order affirmed.

Wieand, J., filed concurring statement.

Carl A. Belin, Jr., Clearfield, for appellant.

Claudia Davidson, Pittsburgh, for appellees.

Before WIEAND, POPOVICH and HESTER, JJ.

POPOVICH, Judge:

We are asked to review the appeal of an order

(reduced to judgment’) of the Court of Common Pleas of

Blair County granting a motion for summary judgment

against the defendant/appellant, David Benjamin.? We

affirm.

1 At the time the order granting the motion for summary

judgment was entered, there was no dollar amount affixed for

damages. Thereafter, on the 20th day after the grant of the

motion, the plaintiffs filed a second motion to fix the amount of

the judgment. The court, after reviewing the pleadings, entered

an order awarding the plaintiffs $646,826.14 in wages/benefits,

attorney fees/costs, and liquidated damages. This order was

reduced to judgment and an appeal followed. See Pa.R.App.P.

301(a), (d).

2 Co-defendants Harry and Sally Benjamin were not named

in the plaintiffs’ motion for summary judgment. The motion

listed David J. Benjamin only as the party against whom judg-

ment was being sought. The other co-defendants are not parties

to the instant appeal.

fae eat sherri

Sb i »

As an appellate court, the standard by which we

assess the propriety of a motion for summary judgment is

well-established; to-wit:

_ we are bound to consider certain principles

which dictate when and under what circum-

stances a trial court may properly enter sum-

mary judgment. The trial court must accept as

true all well-pleaded facts in the non-moving

party’s pleadings, and give to him or her the

benefit of all reasonable inferences to be drawn

therefrom. Summary judgment should not be

entered unless the case is clear and free from

doubt. A grant of summary judgment is proper

where the pleadings, depositions, answers to

interrogatories and admissions on file support

the lower court’s conclusion that no genuine

issue of material fact exists and that the moving

party is entitled to judgment as a matter of law.

We will overturn a trial court’s entry of sum-

mary judgment only if there has been an error of

law or a clear abuse of discretion.

Lower Lake Dock v. Messinger Bearing, 395 Pa.Super. 456,

577 A.2d 631, 634 (1990).

The facts underlying this case are as follows: On

November 6, 1989, two-hundred and twenty-seven

employees/ plaintiffs of the Benjamin Coal Company filed

a complaint against the officers/directors of the Com-

pany, one of whom was the defendant/appellant, David

Benjamin, president and treasurer of the board of direc-

tors. Paragraph 228; see note 2, supra.

The plaintiffs alleged that, despite a work agreement

between the union and the Company, they were informed

on June 21, 1989, “there was no more work and not to

return to the production site.” The plaintiffs claimed, as

result of the cessation of operations, they were owed

wages (for the period from May 28th to June 21st of 1989)

and fringe benefits (vacation time, sickday pay, and

monies intended but never used to purchase U.S. Savings

Bonds).

The plaintiffs asserted that all monetary items were

“wages” entitled to recoupment under Pennsylvania’s

Wage Payment and Collection Law, (WPCL) 43 P.S.

§ 260.1 et seq., the amount of which was $479,022.56. See

note 1, supra.

Numerous pleadings were filed before the plaintiffs

submitted a motion for summary judgment averring that

the defendant, a corporate officer and board member of

the Company,’ was liable personally for the wages and

benefits sought to be recovered.

In reply to the motion for summary judgment, the

defendant argued that the plaintiffs’ union (United Mine

Workers of America) failed to file a claim in the Com-

pany’s bankruptcy, an omission which defendant con-

tended foreclosed the plaintiffs from seeking recovery

under WPCL. Paragraph 8. Also, the defendant noted

that the labor stoppage by the plaintiffs on June 21, 1989,

3 There is no dispute that the defendant is an “employer”

within the meaning of WPCL. See 43 P.S. § 260.2a; Plaintiffs’

Motion for Summary Judgment, Paragraphs 12-15; Defendant’s

Answer to Motion for Summary Judgment, Paragraphs 12-15.

resulted in its “funds” being “frozen” by its banks, and

this impaired its ability to meet its payroll obligations to

the plaintiffs. Further, the defendant asserted that the

work stoppage was violative of the collective bargaining

agreement and was the “proximate cause” of “freezing”

the Company’s available assets to pay wages, benefits,

and prompted the Company to convert its Chapter 11

bankruptcy to a Chapter 7. Defendant’s Answer to

Motion for Summary Judgment, Paragraphs 3, 6 & 8.

By order of court, the plaintiffs’ motion was granted

and, in the course thereof, the defendant’s argument that

the federal Labor Management Relations Act (LMRA)

preempted Pennsylvania’s WPCL was found wanting.

The court also ruled that the (alleged) conduct of the

plaintiffs, subsequent to the termination of employment

(on June 21, 1989), did not impact upon the right to

recover under WPCL wages earned prior thereto nor was

a condition to recovery the filing of a claim in bank-

ruptcy. This appeal followed.

The initial issue we shall address, which is of first

impression in this jurisdiction, concerns the averment

that federal legislation preempts Pennsylvania’s WPCL

because the defendant’s response (defense) to the plain-

tiffs’ suit for wages “involves the construction of thje]

labor agreement”. Additionally, the defendant contends

that the work stoppage by the plaintiffs was violative of

the limited “no-strike” clause appearing in Article XXIX

of the agreement, and, as such, the federal LMRA is

implicated and preempts the field of law to resolve the

matter to the exclusion of Pennsylvania’s WPCL. Appel-

lant’s Brief at 30.

Section 301(a) of the LMRA of 1947, 61 Stat. 136, 156,

29 U.S.C. § 185(a) provides:

Suits for violation of contracts between an

employer and a labor organization representing

employees in an industry affecting commerce as

defined in this Act, 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.

In evaluating the contention of the defendant, we

look to Lingle v. Norge Division of Magic Chef, Inc., 486 U.S.

399, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988) for guidance.

There the Court concluded that an Illinois employee cov-

ered by a collective bargaining agreement, which pro-

vided for a contractual remedy for discharge without

cause, could enforce a statelaw remedy for retaliatory

discharge.

In deciding that Section 301 did not preempt Illinois’

wrongful discharge law, the Lingle Court held that the

employee’s claim would be preempted if any collective

bargaining agreement needed to be interpreted in resolv-

ing the claim;* to-wit:

* The defendant's argument that the plaintiffs’ violation of

the “no-strike” clause (as a defense to payment under WPCL)

should be the focus of inquiry is incorrect. We need to look to

whether the dispute as a whole necessitates inquiry into the

collective bargaining agreement for resolution. Lingle v. Norge

Division of Magic Chef, Inc., 486 U.S. 399, 405-06, 108 S.Ct. 1877,

1881-82 (1988).

Further, “the pre-emptive force of § 301 . . . displace[s]

entirely any state cause of action ‘for violation of contracts

a ee

Bt ah tt, ee

ee CU ee ee ae

eT ee ee ee ee

C10

Thus, [Allis-Chalmers Corp. v.] Lueck{, 471

U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985),]

faithfully applied the principle of § 301 preemp-

tion developed in [Teamsters v.] Lucas Flour|, 369

U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962)]: if the

resolution of a state-claim depends upon the meaning

of a collective-bargaining agreement, the application

of state law . . . is pre-empted and federal labor law

principles . . . must be employed to resolve the

dispute.

Illinois courts have recognized the tort of

retaliatory discharge for filing a worker's com-

pensation claim, and have held that it is applica-

ble to employees covered by union contracts.

“IT]o show retaliatory discharge, the plaintiff

must set forth sufficient facts from which it can

be inferred that (1) he was discharged or threat-

ened with discharge and (2) the employer's

motive in discharging or threatening to dis-

charge him was to deter him from exercising his

rights under the Act or to interfere with his

exercise of those rights.” Each of these purely

factual questions pertains to the conduct of the

employee and the conduct and motivation of the

employer. Neither of the elements requires a court to

between an employer and a labor organization.’ ” Franchise Tax Bd.

of Calif. v. Construction Laborers Vacation Trust for Southern Calif,

463 U.S. 1, 23, 103 S.Ct. 2841, 2853, 77 L.Ed.2d 420 (1983)

(Emphasis added; citation omitted).

Here, the dispute is between the individual employees (in

contrast to the union organization) and the employer /Com-

pany. In this situation, a state-law complaint for breach of indi-

vidual employment contracts is not “completly preempted” by

Section 301. Caterpillar, Inc. v. Williams, 482 U.S. 386, 394, 107

S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987).

a a

Cll

interpret any term of a collective-bargaining agree-

ment. To defend against a retaliatory discharge

claim, an employer must show that it had a

nonretaliatory reason for the discharge; this

purely factual inquiry likewise does not turn on

the meaning of any provision of a collective-

bargaining agreement. Thus, the state-law remedy

in this case is “independent” of the collective-bar-

gaining agreement in the sense of “independent”

that matters for § 301 pre-emption purposes: resolu-

tion of the state-law claim does not require constru-

ing the collective-bargaining agreement.

* + *

.. . [W]hile there may be instances in which the

National Labor Relations Act pre-empts state

law on the basis of the subject matter of the law

in question, § 301 pre-emption merely ensures

that federal law will be the basis for interpreting

collective-bargaining agreements, and says

nothing about the substantial rights of a State

may provide to workers when adjudication of

those rights does not depend upon the inter-

pretation of such agreements. In other words,

even if dispute resolution pursuant to a collec-

tive-bargaining agreement, on the one hand,

and state law, on the other, would require

addressing precisely the same set of facts, as

long as the state law claim can be resolved without

interpreting the agreement itself, the claim is “inde-

pendent” of the agreement for § 301 pre-emption

purposes.

486 U.S. at 405-07, 408-10, 108 S.Ct. at 1881-82, 1883-84

(Footnotes omitted; Citations omitted; Emphasis added).

Moreover, in the usual case in which Section 301 is

alleged to preempt state law, the state law claim is not a

Se ais ar a Rt a tie iw Bar le

C12

contract claim but a tort claim, and the issue is whether

“resolution of [the] state-law claim is substantially depen-

dent upon analysis of the terms of an agreement made

between the parties in a labor contract.” Allis-Chalmers

Corp. v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 1916

(1985).

The basis of the state-law claim in this case is that the

employees were due wages for work performed, the

recovery of which is provided for in a state statute

(WPCL). However, the defense asserted calls for inquiry into

the legitimacy of an alleged work stoppage facially prohibited

by the limited “no-strike” clause of the bargaining agreement

between the union and management. This would, at first

blush, appear to call into play the preemptive effect of

LMRA. Id.

Upon close scrutiny of the facts against the backdrop

of the applicable law, it must be remembered that dam-

ages are not permitted to be entered against individual

employees as a result of a breach of a no-strike provision

in a collective bargaining agreement.5 Complete Auto

5 The defendant’s recourse in such an instance would be to

file suit for breach of contract against the labor union under

Section 301 of the LMRA. This could be filed in federal or state

court. See Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct.

519, 7 L.Ed.2¢ 483 (1962); Teamsters v. Lucas Flour Co., 369 U.S.

95, 102, 82 S.Ct. 571, 576, 7 L.Ed.2d 593 (1962).

Also, the defendant could file a complaint with the National

Labor Relations Board (NLRB) on the ground that the union

engaged in an unfair labor practice in directing its members to

strike in violation of the no-strike clause in the collective bar-

gaining agreement. The two claims are not mutually exclusive.

C13

Transit, Inc. v. Reis, 451 U.S. 401, 101 S.Ct. 1836, 68 L.Ed.2d

248 (1981); California Electric Co. v. Briley, 939 F.2d 790, 794

(9th Cir.1991). Therefore, the provision of WPCL allowing

for a “good faith” defense (asserted by the defendant as a

violation of the no-strike provision of the bargaining

agreement) is to no avail. To find, arguendo, merit in such

a claim (set-off or counter-claim) under WPCL would be

of no force or effect. The remedial nature of WPCL could

not be implemented because of the barring effect of fed-

eral labor law against penalizing individual employees

for the unlawful acts of the union by withholding wages

owed or extracting damages from the unicn members/

employees. Id. Such authority springs from the Suprem-

acy Clause of the United States Constitution.

Moreover, to find otherwise would permit the defen-

dant to do indirectly (withhold monies due the

employees under the WPCL) that which he could not do

directly (hold individual employees accountable for a

union’s violation of a no-strike clause). See generally Reis,

supra; Briley, supra.

Accordingly, because we need not resort to an inter-

pretation of the collective bargaining agreement to evalu-

ate the merits of the plaintiffs’ wage claim, the

preemptive scope of LMRA is forestalled. See Metro-

politan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 741, 105

S.Ct. 2380, 2390, 85 L.Ed.2d 728 (1985), where state law

Although there is reference in the record that a complaint

with the NLRB was filed, we have no insight as to whether any

action was commenced under the auspices of Section 301 of the

LMRA.

S ees ees tk, “

Cea ice

C14

required employers who bought health insurance for

their employees to insist on certain terms in the policies.

The state law at bar, as in Metropolitan Life Ins. Co.,

supra, created an entitlement that was independent of the

collective bargaining contract. As a result, given the

nature of Benjamin’s defense (conduct of the plaintiffs /

employees allegedly violating the no-strike clause of col-

lective bargaining agreement) and the limited remedial

measures permitted if such were proven true, there is no

occasion to engage in an interpretation of the collective

bargaining agreement. Contrast Allis-Chalmers Corp.,

supra (Right to disability benefits derived from the collec-

tive bargaining agreement and was defined by the con-

tractual obligation of good faith so as to trigger the

preemptive effect of Section 301); California Elec. Co. v.

Briley, 939 F.2d 790 (9th Cir.1991) (Employer’s state suit

against employees for quitting their jobs was preempted

by Section 301 because collective bargaining agreement

necessarily defined those duties owed to the employer);

McMahon v. McDowell, 794 F.2d 100 (3rd Cir.1986)

(Employees’ WPCL suit to recover wages and benefits

from corporate officers and directors preempted by

Employee Retirement Income Security Act (ERISA) since

to determine the amount of any recovery under the

WPCL one could do so only by reference to the benefit

plans and the provisions of ERISA); National Metalcrafters,

Div. of Keystone v. McNeil, 784 F.2d 817 (7th Cir.1986)

(Determination of whether the employer’s failure to pay

vacation benefits was a willful breach of the collective

bargaining agreement necessitated an interpretation of

the contact [sic], and, as such, was controlled by Section

301’s preemption over state wage claim law).

C15

Instantly, we hold that resolution of the plaintiffs’

wage-recoupment issue does not necessitate an “inter-

pretation” of (nor is it inextricably intertwined with) the

labor agreement so as to call into play federal labor law

to guide us in resolving the dispute. We do so for several

reasons:

First: Plaintiffs’ contention that the wages sought

accrued prior to any work stoppage is not disputed by

the defendant.

Second: The right to recover wages “earned” by the

plaintiffs/employees upon separation from employment

is a statutory remedy which supplements (rather than

supplants) a common law cause of action for breach of

contract, 43 P.S. § 260.9a(a); Laborers Combined Funds of

Western Pa. v. Mattie, 359 Pa.Super. 399, 518 A.2d 1296,

1299 (1986).

Third: No contract interpretation is needed to assess

the plaintiffs’ right to compensation for work performed.

The limited “no-strike” clause referred to by the defen-

dant as the vehicle to draw this Court into an interpreta-

tion of the collective bargaining agreement (and with it

the entire battery of federal labor law on its coat-tails) is

unpersuasive under the particular facts here. Compare Cater-

pillar, Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425, 96

L.Ed.2d 318 (1987) (Claim did not turn on any collective

bargaining agreement interpretation) and contrast with

Avco Corp. v. Machinists, 390 U.S. 557, 88 S.Ct. 1235, 20

L.Ed.2d 126 (1968) (Claim required construing collective

bargaining agreement).

A i he A aE «tse ar ie teeth: en stadS ag RPIIM ity

PANEER =)

C16

In light of the preceding discussion, we find no merit

to either the defendant’s breach of collective bargaining

defense or preemption argument.

The next two issues posed for our consideration

(“walkout” by employees being a

“good faith” defense to

liability under WPCL) have been disposed of, by implica-

tion, with resolution of the initial claims. We see no need

to elaborate further on the matter.

The last issue to which we will respond is the defen-

dant’s contention that the plaintiffs’ failure to file a claim

in the Company’s bankruptcy action precludes them from

seeking relief (money damages) under the banner of

WPCL.

Consistent with Mattei [sic], supra, the independent

nature of a WPCL claim dispenses with the need that a

claimant precede his recoupment efforts under statutory

law by seeking satisfaction of the indebtedness through

the bankruptcy courts. No such circuitous route is man-

dated in either our state laws or federal rules. We will

not, by judicial fiat, impose such a course of procedure

now.

Concluding that the defendant's claims do not war-

rant the relief requested, we will affirm the order

appealed.

Order affirmed.

WIEAND, Judge, concurring:

[ join the majority’s analysis. I write separately only

because of my continuing belief that there is nothing

discretionary about the entry of summary judgment by a

trial court. Pa.R.C.P. 1035(b) permits a trial court to enter

C17

a summary judgment if “there is no genuine issue as to

any material fact and . . . the moving party is entitled to a

judgment as a matter of law.” (emphasis added). Whether

to enter a summary judgment is purely a question of law,

and the entry of such a judgment will be reversed for an

error of law. It is incorrect, therefore, to suggest that a

trial court’s entry of summary judgment will be reversed

only for an abuse of discretion.

APPENDIX D

THOMAS ADAM, et al., : THE COURT OF

Plaintiffs : COMMON PLEAS

: BLAIR COUNTY,

V. : PENNSYLVANIA

DAVID BENJAMIN; HARRY

BENJAMIN; and SALLY

BENJAMIN, a/k/a

89 CP 001925

CIVIL ACTION -

SALLY GOLD,

: LAW

Defendants

| INTERNATIONAL UNION,

| UNITED MINE WORKERS

| OF AMERICA,

: Additional Defendant

| NORMAN D. CALLAN ‘JUDGE

| CLAUDIA DAVIDSON, ATTORNEY FOR

| ESQUIRE PLAINTIFFS

| PAUL GIRDANY, ATTORNEY FOR

: ESQUIRE PLAINTIFFS

: CARL A. BELIN, JR., ATTORNEY FOR

: ESQUIRE DEFENDANTS

| WILLIAM B. MANION, — ATTORNEY FOR

: ESQUIRE ADDITIONAL

; DEFENDANT

OPINION

This case comes before the Court for disposition of

Plaintiffs’ Motion to Affix Amount of Judgment. On July

17, 1992, Summary Judgment was granted in favor of

Plaintiffs against Defendant David Benjamin under the

Pennsylvania Wage Payment and Collection Law

“WPCL.” No amount was set at that time as the parties

wished to agree on a figure and petition the Court later.

I. WAGES

Both parties agree that the amount due Plaintiffs for

back wages and lost benefits would be Four Hundred

Seventy Seven Thousand Four Hundred Thirty-Four Dol-

lars and Twenty-six ($477,434.26) Cents.

II. ATTORNEY’S FEES AND COSTS

Plaintiffs are seeking Forty-One Thousand One Hun-

dred Eighty-three Dollars and Twenty-five ($41,183.25)

Cents for Attorney’s fees and One Thousand Six Hundred

Thirty-two Dollars and Seventy-nine ($1,632.79) Cents for

costs.

Under 43 P.S. 260.9(a), Plaintiffs may receive reason-

able Attorney’s fees. In the case of Barnhart v. Com-

pugraphic Corporation, 936 F.2d 131 (C.A. 3rd 1991). The

Court of Appeals for the Third Circuit held that even if

there was a good faith dispute over the back wages,

employees can still collect attorney fees if they have been

awarded damages. In the case at bar, therefore, attorney

fees are collectable.

The only question is the amount collectable. Plain-

tiff’s amount requested may be reasonable in Allegheny

County, but in Blair County a more reasonable amount

would be Ninety ($90.00) Dollars per hour. Therefore, the

amount due for each Attorney would be:

; 1. Attorney Healy: 6.75 Hours x $90.00

$607.50.

. 2. Attorney Davidson: 200.70 Hours x

$90.00 = $18,063.00.

3. Attorney Girdany: 144.70 Hours

$90.00 = $13,023.00.

4. Attorney Akers: 6.10 Hours x $90.00

$549.00.

The amount requested for law clerks and paralegals

is reasonable, therefore the amount due for each would

be:

1. Sherri Lowe: 10.70 Hours x $40.00 =

$428.00.

2. Connie Rankin: 2.90 Hours x $40.00 =

$116.00.

3. Sam Happel: 1.80 Hours x $40.00 =

$72.00.

4. Clara Goldstein: 19.20 Hours x $40.00 =

$768.00.

5. Linda DeBruin: 14.40 Hours x $40.00 =

$576.00.

6. Denise Yacavace: 1.45 Hours x $40.00 =

$58.00.

7. Lori Lassick: 7.70 Hours x $40.00 =

$308.00

a nai ~

8. Karen Hughes: 2.70 Hours x $40.00 =

$108.00.

The total amount for Attorney’s fees would, thus, be

Thirty-Four Thousand Six Hundred Seventy-Six Dollars

and Fifty ($34,676.50) Cents.

The amount requested for costs will be granted in

toto, which would be One Thousand Six Hundred Thirty-

two Dollars and Seventy-nine ($1,632.79) Cents.

Ill. LIQUIDATING DAMAGES

Plaintiffs assert that they are entitled to liquidating

damages under the “WPCL” as the Defendant acted in

bad faith disputing these back wages. Under 43 P.S.

260.10, liquidating damages are applicable if it is found

that the Defendant has acted in bad faith. The amount of

damages under the “WPCL” is twenty-five (25%) percent

of the award or Five Hundred ($500.00) Dollars, which-

ever is greater.

As stated in this Court’s prior Opinion and Order

dated July 17, 1992, the claims the Defendant made were

without substance. The law allows liquidating damages

in such a situation. The amount of liquidated damages is

set, pursuant to the Act, at One Hundred Thirty-three

Thousand Eighty-two Dollars and Fifty-nine ($133,082.59)

Cents.

[V. PRE-JUDGMENT INTEREST

Plaintiffs allege that they are entitled to pre-judgment

interest at the rate of six (6%) percent per annum. How-

ever, the Pennsylvania “WPCL” does not specifically pro-

vide for the award of pre-judgment interest. Plaintiffs

assert that, by law, they are entitled to it because pre-

judgment interest is collectable on contractual obliga-

tions. However, the “WPCL” is a statutory remedy, not a

contractual remedy. The contract in the case at bar is

between the Union and the Benjamin Coal Company, not

David Benjamin. Therefore, pre-judgment interest is inap-

plicable to the case at bar.

In accordance with the foregoing Opinion, the fol-

lowing is deemed to be appropriate:

ORDER

AND NOW, this 25th day of September, 1992, the

above captioned matter having come before the Court for

disposition of Plaintiffs’ Motion to Affix Amount of Judg-

ment, after a review of the Pleadings, briefs, and applica-

ble law; it is,

ORDERED, DIRECTED, AND DECREED that the

Amount of the Summary Judgment entered on the 17th

day of July, 1992, be affixed as follows:

1. Wages/Benefits $477,434.26

2. Attorney’s Fees/Costs $36,309.29

3. Liquidating Damages $133,082.59

TOTAL $646,826.14

Judgment is hereby entered in favor of the Plaintiffs

in the amount of Six Hundred Forty-six Thousand Eight

Hundred Twenty-Six Dollars and Fourteen ($646,826.14)

Cents.

BY THE COURT:

/s/ Norman D. Callan

APPENDIX E

THOMAS ADAM, et al.,

Plaintiffs

DAVID BENJAMIN; HARRY

BENJAMIN; and SALLY

BENJAMIN, a/k/a

SALLY GOLD,

Defendants

INTERNATIONAL UNION,

UNITED MINE WORKERS

OF AMERICA,

THE COURT OF

COMMON PLEAS

BLAIR COUNTY,

PENNSYLVANIA

89 CP 001925

CIVIL ACTION -

LAW

Additional Defendant

NORMAN D. CALLAN

CLAUDIA DAVIDSON,

ESQUIRE

PAUL GIRDANY,

ESQUIRE

CARL A. BELIN, JR.,

ESQUIRE

WILLIAM B. MANION,

ESQUIRE

————$—$—$—$——

JUDGE

ATTORNEY FOR

PLAINTIFFS

ATTORNEY FOR

PLAINTIFFS

ATTORNEY FOR

DEFENDANTS

ATTORNEY FOR

ADDITIONAL

DEFENDANT

OPINION

This case comes before the Court for disposition of

Plaintiffs’ and Additional Defendant’s Motion for Sum-

mary Judgment against David Benjamin. The Plaintiffs

instituted this class action against the corporate share-

holders of the Benjamin Coal Company for back wages

between May 28, 1989, and June 15, 1989, under the

Pennsylvania Wage Payment and Collection Law, Act of

1961. 43 P.S. 260.1 et seq. (“WPCL”). The Plaintiffs’ Motion

for Summary Judgment is based on the premised fact that

there is no legal defense available to the Defendant that

excuses him from paying the back wages. The additional

Defendant's Motion is based on the fact that the actions

of the Union is irrelevant to the action complained of

here.

The law as to the grant of Summary Judgment is well

established. An entry of Summary Judgment may be

granted only in cases where the right is clear and free of

doubt. Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412

A.2d 466 (1979). Summary Judgment should be granted

only if there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter of law.

Consumer Party of Pennsylvania v. Commonwealth, 510 Pa.

158, 507 A.2d 323 (1986).

There is no genuine issue of material fact. All parties

acknowledge that the back wages are from the time

period of May 28, 1989, to June 21, 1989. The parties also

agree that the Plaintiffs stopped working on June 21,

1989. This suit is for back pay due before the work

stoppage.

The Pennsylvania “WPCL” provides a civil remedy to

employees to collect wages due from employers. 43 P.S.

§ 260.1 et seq. Pursuant to “WPCL,” the Plaintiffs are

entitled to the relief requested. However, the Defendant

alleges that the reason the Plaintiffs were not paid is the

fact that on June 21, 1989, the Plaintiffs engaged in a work

stoppage. This work stoppage is alleged to have caused

the bank to terminate a credit arrangement. Defendant

alleges that he informed the workers of this situation. On

June 23, 1989, the bank froze the Coal Company funds

and the Coal Company went into Chapter 7 Bankruptcy.

Defendant now argues that since it was the actions of the

Plaintiffs that forced the Coal Company into Chapter 7,

Defendant contends that he is not liable for the back

wages.

Even if the Defendant's allegations are true, such

allegations are irrelevant to the issue at hand. Is the

Defendant liable to the Plaintiffs for back wages and

other benefits that accrued prior to the alleged work

stoppage? The clear answer is yes. The “WPCL” explicitly

states: “Separated Employees. Whenever an employer

separates an employee from the payroll, or whenever an

employee quits or resigns his employment, the wages or

compensation earned shall become due and payable not

later than the next regular payday of his employer... . “

43 PS. § 260.5 (a).

The purpose of the Act is to help employees receive

wages actually due to them for work already performed.

Since here the back wages are due for a period in which

the Plaintiffs were working, Plaintiffs’ actions subsequent

to June 21, 1989, are irrelevant. The actions of the Plain-

tiffs subsequent to June 21, 1989, do not establish a good

faith defense for Defendant concerning wages prior

thereto.

Defendant now alleges that the Federal Labor Man-

agement Relations Acts (“LMRA”) preempts the Pennsyl-

vania “WPCL.” This argument was found to be without

merit in Carpenter’s Health and Welfare Funds v. Ambrose;

727 F.2d 279 (3d Cir. 1983), Footnote 5. Defendant cites

cases where the Federal Employment Retirement Income

Security Act (“ERISA”) 29 USC § 1001, et seq., was found

to preempt the Pennsylvania “WPCL.” However,

“ERISA” contains explicit language preempting state law

while “LMRA” does not. In the case of Tener v. Hoag, 697

F. Supp. 196 (W.D. Pa. 1988), the Federal District Court

held that no federal question jurisdiction existed for

claims to enforce wages and fringe benefits. Defendant's

Federal preemption argument lacks merit.

Defendant lastly asserts the defense that since the

Plaintiffs failed to file claims for these wages with the

trustee in Bankruptcy, they are precluded from doing so

now. This argument was rejected in this Court’s prior

Opinion and Order dated the 8th day of May, 1992.

Since Defendant’s defenses concerning the Union are

found to be without merit as being irrelevant to this

cause of action; the Union’s Motion for Summary Judg-

ment must be granted.

In light of the foregoing Opinion, the following is

deemed appropriate:

_ — aa ee

ORDER

AND NOW, this 17 day of July, 1992, the above

captioned matter having come before the Court for dispo-

sition of Plaintiffs’ and Additional Defendant’s Motions

for Summary Judgment, after a review of the pleadings,

briefs, and applicable law; it is,

ORDERED, DIRECTED, AND DECREED that Plain-

tiffs’ and Additional Defendant’s Motion for Summary

Judgment is granted. Judgment is hereby entered in favor

of the Plaintiffs against the Defendant David Benjamin.

Judgment is also entered in favor of the Additional

Defendant against Defendant David Benjamin.

BY THE COURT:

/s/ Norman D. Callan

APPENDIX F

THOMAS ADAM, et al.,

Plaintiffs - THE COURT OF

v. - | COMMON PLEAS |

HARRY BENJAMIN; and * PENNSYLVANIA |

SALLY BENJAMIN, a/k/a

SALLY GOLD, . 89 CP 1925

Defendants - CIVIL ACTION - LAW

INTERNATIONAL

UNION, UNITED MINE

WORKERS OF AMERICA,

Additional Defendant

NORMAN D. CALLAN JUDGE

CLAUDIA DAVIDSON, ATTORNEY FOR

ESQUIRE PLAINTIFFS

PAUL GIRDANY, ATTORNEY FOR

ESQUIRE PLAINTIFFS

CARL A. BELIN, JR., ATTORNEY FOR

ESQUIRE DEFENDANTS

WILLIAM B. MANION, ATTORNEY FOR

ESQUIRE ADDITIONAL

DEFENDANT

OPINION

This case comes before the Court for disposition of

Defendants’ Motion for Summary Judgment. The Plain-

tiffs instituted this class action against the corporate

shareholders of the Benjamin Coal Company for back

wages between May 28, 1989, and June 15, 1989, under

the Pennsylvania Wage Payment and Collection Law, Act

of 1961, 43 P.S. 260.1 et seq. (“WPCL”). The Defendants’

Motion for Summary Judgment is based on the premise

that the Plaintiffs’ had an opportunity to raise the back

wage claims against the bankrupt estate, and failed to do

so timely; therefore, the Plaintiffs are now estopped from

bringing the suit at bar. The Plaintiff alleges that under

the “WPCL,” they are allowed to bring suit against the

corporate officers for back pay.

The law as to the grant of summary judgment is well

established. An entry of summary judgment may be

granted only in cases where the right is clear and free of

doubt. Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412

A 2d 466 (1979). Summary Judgment should be granted

only if there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter of law.

Consumer Party of Pennsylvania v. Commonwealth, 510 Pa.

158, 507 A.2d 323 (1986).

The Pennsylvania Wage Payment and Collection Law

(“WPCL”) provides employees a means of attempting to

collect back pay from the employer. 43 P.S. § 260.1 et seq.

Employer is defined as:

Includes every person, firm, partnership,

association, corporation, receiver, or other offi-

cer of a Court of this Commonwealth and any

agent or officer of a Court of this Common-

wealth and any agent or officer of any of the

above mentioned classes employing any person

in this Commonwealth.

43 PS. § 260.2a

There is no requirement in the “WPCL” that

employees must first bring any claim for back wages

against the Corporation itself or the bankrupt estate of

the Corporation before instituting an action under the

“WPCL.”

The claim made by the Plaintiffs in the case at bar is

perfectly valid and the fact that they did not bring a claim

against the bankrupt estate is not a defect which will

defeat this valid claim under the “WPCL.”

There also exists genuine issues of fact which pre-

clude a grant of summary judgment at this time, such as

the amount of money which was available in the bank-

rupt estate to pay these claims, if they were filed.

In light of the foregoing Opinion, the following is

deemed appropriate:

ORDER

AND NOW, this 8th day of May, 1992, the above

captioned matter having come before the Court for dispo-

sition of Defendants’ Motion for Summary Judgment,

after a review of the pleadings, briefs, and applicable

statutory and case law; it is,

ORDERED, DIRECTED, AND DECREED that Defen-

dants’ Motion for Summary Judgment is denied and dis-

missed. The Defendant is not entitled to summary

judgment by law and genuine issues of fact exist, thus

precluding summary judgment.

BY THE COURT:

/s/ Norman D. Callan

APPENDIX G

29 U.S.C. § 142. Definitions

When used in this chapter -

(1) The term “industry affecting commerce” means

any industry or activity in commerce or in which a labor

dispute would burden or obstruct commerce or tend to

burden or obstruct commerce or the free flow of com-

merce.

(2) The term “strike” includes any strike or other

concerted stoppage of work by employees (including a

stoppage by reason of the expiration of a collective-bar-

gaining agreement) and any concerted slowdown or other

concerted interruption of operations by employees.

(3) The terms “commerce”, “labor disputes”,

“employer”, “employee”, “labor organization”, “repre-

sentative”, “person”, and “supervisor” shall have the

same meaning as when used in subchapter II of this

chapter as amended by this chapter.

29 U.S.C. § 152. Definitions

When used in this subchapter -

(1) The term “person” includes one or more indi-

viduals, labor organizations, partnerships, associations,

corporations, legal representatives, trustees, trustees in

cases under Title 11, or receivers.

(2) The term “employer” includes any person acting

as an agent of an employer, directly or indirectly, but

shall not include the United States or any wholly owned

Government corporation, or any Federal Reserve Bank, or

any State or political subdivision thereof, or any person

subject to the Railway Labor Act [45 U.S.C.A. § 151 et

seq.], as amended from time to time, or any labor organi-

zation (other than when acting as an employer), or any-

one acting in the capacity of officer or agent of such labor

organization.

29 U.S.C. § 185. Suits by and against labor organiza-

tions

Venue, amount, and citizenship

(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 citizen-

ship of the parties.

Responsibility for acts of agent; entity for purposes

of suit: enforcement of money judgments

(b) Any labor organization which represents

employees in an industry affecting commerce as defined

in this chapter and any employer whose activities affect

commerce as defined in this chapter shall be bound by

the acts of its agents. Any such labor organization may

sue or be sued as an entity and in behalf of the employees

whom it represents in the courts of the United States.

Any money judgment against a labor organization in a

district court of the United States shall be enforceable

only against the organization as an entity and against its

assets, and shall not be enforceable against any individ-

ual member or his assets.

Jurisdiction

or against labor organizations in the district courts of the

United States, district courts shall be deemed to have

jurisdiction of a labor organization (1) in the district in

which such organization maintains its principal office, or

(2) in any district in which its duly authorized officers or

agents are engaged in representing or acting for

employee members.

Service of process

(d) The service of summons, subpena [sic], or other

legal process of any court of the United States upon an

officer or agent of a labor organization, in his capacity as

such, shall constitute service upon the labor organization.

Determination of question of agency

(e) For the purposes of this section, in determining

whether any person is acting as an “agent” of another

person so as to make such other person responsible for

his acts, the question of whether the specific acts per-

formed were actually authorized or subsequently ratified

shall not be controlling.

Pa. Stat. Ann. tit. 43 § 260.2a. Definitions

The following words and phrases when used in this

act shall have, unless the context clearly indicates other-

wise, the meanings given to them in this section:

“Authorized representative.” An employe of the

Department of Labor and Industry who is empowered to

perform duties assigned in conformity with all existing

laws, rules and regulations administered by the depart-

ment.

“Check.” A draft drawn on a bank and payable on

demand.

“Department.” The Department of Labor and Indus-

try.

“Employer.” Includes every person, firm, partner-

ship, association, corporation, receiver or other officer of

a court of this Commonwealth and any agent or officer of

any of the above-mentioned classes employing any per-

son in this Commonwealth.

“Fringe benefits or wage supplements.” Includes all

monetary employer payments to provide benefits under

any employe benefit plan as defined in section 3(3) of the

Employee Retirement Income Security Act of 1974, 29

U.S.C. § 1001 et seq.;' as well as separation, vacation,

holiday, or guaranteed pay; reimbursement for expenses;

union dues withheld from the employes’ pay by the

employer; and any other amount to be paid pursuant to

an agreement to the employe, a third party or fund for

the benefit of employes.

1 29 U.S.C.A. § 1002, subsec. (3).

“Secretary.” The Secretary of Labor and Industry.

“Wages.” Includes all earnings of an employe,

regardless of whether determined on time, task, piece,

commission or other method of calculation. The term

“wages” also includes fringe benefits or wage supple-

ments whether payable by the employer from his funds

or from amounts withheld from the employes’ pay by the

employer.

Pa. Stat. Ann. tit. 43 § 260.8. Enforcement

The Secretary of Labor and Industry shall have the

duty, but not the exclusive right, to enforce and adminis-

ter the provisions of this act, to investigate any alleged

violations of this act and to institute prosecutions and

actions as provided hereunder. Nothing in this act shall

authorize the secretary to initiate a civil action for unpaid

wages which are subject to disposition under grievance

and arbitration procedures of a collective bargaining

agreement. The Department of Labor and Industry shall

have the power to make rules and regulations for the

administration of this act.

Every employer shall keep open to inspection by the

secretary or his authorized representative, all payroll

records or other records or documents relative to the

enforcement of this act. Such inspection may be made by

the secretary or his authorized representative at any rea-

sonable time. Every employer shall permit the secretary

or any authorized representative to interrogate any

employe in the place of employment and during work

hours with respect to such records or documents. Where

such records are maintained at a central record keeping

office outside of the Commonwealth, such records shall

be made available for inspection at the place of employ-

ment within seven calendar days following verbal or

written notice from the secretary or his authorized repre-

sentative. Where a microfilm or any other method is

authorized for record keeping purposes, the employer

shall make available to the secretary or his authorized

representative, the equipment which is necessary to facil-

itate review of the records.

Pa. Stat. Ann. tit. 43 § 260.9a. Civil remedies and penal-

ties

(a) Any employe or group of employes, labor orga-

nization or party to whom any type of wages is payable

may institute actions provided under this act.

(b) Actions by an employe, labor organization, or

party to whom any type of wages is payable to recover

unpaid wages and liquidated damages may be main-

tained in any court of competent jurisdiction, by such

labor organization, party to whom any type of wages is

payable or any one or more employes for and in behalf of

himself or themselves and other employes similarly situ-

ated, or such employe or employes may designate an

agent or representative to maintain such action or on

behalf of all employes similarly situated. Any such

employe, labor organization, party, or his representative

shall have the power to settle or adjust his claim for

unpaid wages.

nization or party to whom any type of wages is payable

may, in the alternative, inform the secretary of the wage

claim against an employer or former employer, and the

secretary shall, unless the claim appears to be frivolous,

immediately notify the employer or former employer of

such claim by certified mail. If the employer or former

employer fails to pay the claim or make satisfactory

explanation to the secretary of his failure to do so within

ten days after receipt of such certified notification, there-

after, the employer or former employer shall be liable for

a penalty of ten percent (10%) of that portion of the claim

found to be justly due. A good faith dispute or contest as

to the amount of wages due or the good faith assertion of

a right of set-off or counter-claim shall be deemed a

satisfactory explanation for nonpayment of such amount

in dispute or claimed as a set-off or counter-claim. The

secretary shall have a cause of action against the

employer or former employer for recovery of such pen-

alty and the same may be included in any subsequent

action by the secretary on said wage claim or may be

exercised separately after adjustment of such wage claim

without court action.

(d) In any civil action brought under the provisions

of this act, the Secretary of Labor and Industry may

require the employer to post bond or security to secure

payment of the entire claim of the employe with credit in

the amount of any good faith assertion of a right of set-off

or counter-claim. Such bond or security shall be posted in

the court where the civil action is brought. The request

for bond or security shall be signed by the secretary and

shall provide that such bond or security in the amount

stated shall be posted within 30 days of service thereof on

the employer. If such bond or security is not posted

within the 30-day period, the eraployer will be deemed to

have admitted his liability and execution may imme-

diately ensue.

(e) If the secretary determines that wages due have

not been paid and that such unpaid wages constitute an

enforceable claim, the secretary shall, upon the request of

the employe, labor organization or party to whom any

type of wages is payable, take an assignment in trust,

from the requesting party of such claim for wages with-

out being bound by any of the technical rules respecting

the validity of any such assignments and may bring any

legal action necessary to collect such claim, subject to the

right by the employer to set-off or counter-claim against

the assigning party. Upon any such assignment, the secre-

tary shall have the power to settle and adjust any such

claim to the same extent as might the assigning party.

(f) The court in any action brought under this sec-

tion shall, in addition to any judgment awarded to the

plaintiff or plaintiffs, allow costs for reasonable attorneys’

fees of any nature to be paid by the defendant.

(g) No administrative proceedings or legal action

shall be instituted under the provisions of this act for the

collection of unpaid wages or liquidated damages more

than three years after the day on which such wages were

due and payable as provided in sections 3 and 5.

Pa. Stat. Ann. tit. 43 § 260.10. Liquidated damages

Where wages remain unpaid for thirty days beyond

the regularly scheduled payday, or, in the case where no

regularly scheduled payday is applicable, for sixty days

beyond the filing by the employe of a proper claim or for

sixty days beyond the date of the agreement, award or

other act making wages payable, or where shortages in

the wage payments made exceed five percent (5%) of the

gross wages payable on any two regularly scheduled

paydays in the same calendar quarter, and no good faith

contest or dispute of any wage claim including the good

faith assertion of a right of set-off or counter-claim exists

accounting for such non-payment, the employe shall be

entitled to claim, in addition, as liquidated damages an

amount equal to twenty-five percent (25%) of the total

amount of wages due, or five hundred dollars ($500),

whichever is greater.

APPENDIX H

State Wage Payment Statutes that Appear to

Provide Remedies for the Breach of Collective

Bargaining Agreements Covered by the LMRA

Alaska - Alaska Stat. § 23.10.040 et seq. (1990)

Arizona — Ariz. Rev. Stat. Ann. § 23-350 et seq. (1983)

Arkansas — Ark. Code Ann. § 11-4-401 et seq. (Michie 1987

& Supp. 1993)

California — Cal. Lab. Code § 201 et seq. (West 1989)

Colorado - Colo. Rev. Stat. § 8-4-101 et seq. (1986 & Supp.

1993)

Connecticut — Conn. Gen. Stat. Ann. § 31-70 et seq. (West

1987)

Delaware - Del. Code Ann. tit. 19, § 1101 et seq. (1985 &

Supp. 1992)

District of Columbia - D.C. Code Ann. § 36-101 et seq.

(1993)

Georgia - Ga. Code Ann. § 34-7-1 et seq. (Michie 1992)

Hawaii — Haw. Rev. Stat. § 388-1 et seq. (1994)

Idaho — Idaho Code § 45-601 et seq. (1948 & Supp. 1994)

Illinois — Ill. Ann. Stat. ch. 820, para. 115/1 et seq. (Smith-

Hurd 1993)

Indiana - Ind. Code Ann. § 22-2-9-1 et seq. (Burns 1992 &

Supp. 1994)

Iowa - lowa Code Ann. § 91A.1 et seq. (West 1984 & Supp.

1994)

Kansas — Kan. Stat. Ann. § 44-312 et seq. (1993)

Kentucky — Ky. Rev. Stat. Ann. § 337.010 et seq. (Baldwin

1993)

Louisiana — La. Rev. Stat. Ann. § 23:631 et seq. (West 1985 &

Supp. 1994)

Maine — Me. Rev. Stat. Ann. tit. 26, § 621 et seq. (West 1964)

Maryland - Md. Labor & Employment Code Ann. § 3-501

et seq. (1991)

Massachusetts - Mass. Ann. Laws ch. 149, § 148 et seq.

(Law. Co-op. 1989)

Michigan — Mich. Comp. Laws Ann. § 408.471 et seq. (West

1985)

Minnesota — Minn. Stat. Ann. § 181.01 et seq. (West 1993 &

Supp. 1994)

Mississippi — Miss. Code Ann. §§ 71-1-35 to 71-1-45;

§ 71-1-53 (1972 & Supp. 1993)

Missouri - Mo. Ann. Stat. §§ 290.080 to 290.130 (Vernon

1993)

Montana —- Mont. Code Ann. § 39-3-201 et seq. (1993)

Nebraska — Neb. Rev. Stat. §§ 48-1228 to 48-1232 (1988)

Nevada — Nev. Rev. Stat. §§ 608.016 to 608.195 (1987)

New Hampshire — N.H. Rev. Stat. Ann. §§ 275:42 to 275:55

(1987 & Supp. 1993)

New Jersey — N.J. Stat. Ann. § 34:11-4 et seq. (West 1988)

New Mexico — N.M. Stat. Ann. § 50-4-1 et seq. (Michie 1993)

New York — N.Y. Lab. Law § 190 et seq. (McKinney 1986 &

Supp. 1994)

North Carolina — N.C. Gen. Stat. § 95-25.1 et seg. (1993)

North Dakota - N.D. Cent. Code § 34-14-01 et seq. (1987 &

Supp. 1993)

Ohio —- Ohio Rev. Code Ann. §§ 4113.15 and 4113.16 (Bald-

win 1990)

Oklahoma — Okla. Stat. Ann. tit. 40, § 165.1 et seq. (West

1986 & Supp. 1994)

Oregon — Or. Rev. Stat. §§ 652.110 to 652.250 (1993)

Pennsylvania — Pa. Stat. Ann. tit. 43 §§ 260.1, et seq. (1986

& Supp. 1993)

Rhode Island — R.I. Gen. Laws § 28-14-1 et seq. (1986 &

Supp. 1993)

South Carolina —- S.C. Code Ann. § 41-10-10 et seq. (Law.

Co-op. Supp. 1993)

South Dakota - S.D. Codified Laws Ann. § 60-11-1 et seq.

(1993 & Supp. 1994)

Tennessee — Tenn. Code Ann. § 50-2-101 et seq. (1991 &

Supp. 1993)

Texas — Tex. Lab. Code Ann. §§ 61.011 to 61.020 (West

Supp. 1994)

Utah ~- Utah Code Ann. § 34-28-1 et seq. (1988 & Supp.

1993)

Vermont — Vt. Stat. Ann. tit. 21, §§ 341 to 347 (1987)

Virginia — Va. Code Ann. § 40.1-29 to 40.1-33 (1990 &

Supp. 1993)

Washington — Wash. Rev. Code Ann. §§ 49.48.010 et seq.,

49.52.010 et seq. (1990 & Supp. 1994)

West Virginia —- W. Va. Code § 21-5-1 et seq. (1989 & Supp.

1993)

Wisconsin — Wis. Stat. Ann. §§ 109.01 et seqg., §§ 111.01(f)

(West 1988 & Supp. 1993)

Wyoming — Wyo. Stat. §§ 27-4-101 et seq., §§ 27-4-501 et seq.

(1991)

APPENDIX I

State Wage Payment Statutes that Appear To

Impose Personal Liability on Corporate Officers Absent

a Showing Sufficient to Pierce the Corporate Veil

Arkansas — Ark. Code Ann. § 11-4-402(c) (Michie 1987 &

Supp. 1993)

California - Cal. Lab. Code § 216 (West 1989)

Colorado — Colo. Rev. Stat. § 8-4-101 (6) (1986 & Supp.

1993)

Connecticut —- Conn. Gen. Stat. Ann. § 31-71g (West 1987)

Hawaii — Haw. Rev. Stat. § 388-10 (1994)

Illinois — Ill. Ann. Stat. ch. 820, para. 115/13 (Smith-Hurd

1993)

Indiana —- Ind. Code § 22-2-9-1(a) (Burns 1992 & Supp.

1994)

Kansas — Kan. Stat. Ann. § 44-313 (1993)

Kentucky — Ky. Rev. Stat. Ann. § 337.010(d) (Baldwin 1993)

Massachusetts - Mass. Gen. Laws Ann. ch. 149, § 148 et seq.

(Law Co-op. 1989)

Michigan —- Mich. Comp. Laws Ann. § 408.471(d) (West

1985)

Mississippi ~ Miss. Code Ann. §§ 71-1-53 (1972 & Supp.

1993)

Montana —- Mont. Code Ann. § 39-3-201(6) (1993)

Nevada — Nev. Rev. Stat. Ann. §§ 608.011 (1987)

New Hampshire - N.H. Rev. Stat. Ann. §§ 275:42(1) and

275:42(V) (1987 & Supp. 1993)

New Jersey — N.J. Stat. Ann. § 34:11-4.1(a) (West 1988)

New Mexico — N.M. Stat. Ann. § 50-4-1(a) (Michie 1993)

New York — N.Y. Lab. Law § 198-c (McKinney 1986 &

Supp. 1994)

North Carolina - N.C. Gen. Stat. § 95-25.2(5) (1993)

North Dakota —- N.D. Cent. Code § 34-14-01 (1987 & Supp.

1993)

Pennsylvania — 43 Pa. Stat. Ann. tit. § 260.2a (1992 & Supp.

1994)

Rhode Island — R.I. Gen. Laws § 28-14-1(2) (1986 & Supp.

1993)

South Carolina - S.C. Code Ann. § 41-10-10(1) (Law. Co-

op. Supp. 1993)

South Dakota —- S.D. Codified Laws Ann. § 60-11-8 (1993 &

Supp. 1994)

Texas — Tex. Lab. Code Ann. §§ 61.001 (West Supp. 1994)

Utah — Utah Code Ann. § 34-28-2(1) (1987 & Supp. 1993)

Vermont — Vt. Stat. Ann. tit. 21 § 345 (1987)

Washington — Wash. Rev. Code § 49.52.070 (1990 & Supp.

1994)

West Virginia —- W. Va. Code § 21-5-1 (1989 & Supp. 1993)

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.