Petition for Writ of Certiorari — Freeman v. Duke Power Co.

Supreme Court, U.S.

\ FILED

) 7

041011 JAN 24 2008

RECORD NO.

In the

Supreme Court of the United States

October Term, 2004

ALBERT L. FREEMAN,

Petitioner,

DUKE POWER COMPANY,

A division of Duke Energy Corporation; Duke Energy Corporation,

Respondents.

TS AS APC R EMMI

ALBERT L. FREEMAN,

Petitioner,

CINDY THAXTON and GEORGE KWASCHA,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Fourth Circuit

PETITION FOR WRIT OF CERTIORARI

FRED T. HAMLET

300 North Greene Street

Wachovia Tower, Suite 2175

Greensboro, NC 27401

(336) 378-9751

Counsel for Petitioner

ce) COUNSEL PRESS @ VA - (800) 275-0668

QUESTIONS PRESENTED

In July of 1999, after having twice unsuccessfully

attempted to terminate the employment of Petitioner Albert L.

Freeman for “moonlighting” Respondent Duke Power

terminated Mr. Freeman’s employment for allegedly breaching

a “no-moonlighting” agreement between Freeman and Duke

Power. Respondents Thaxton and Kwascha orchestrated and

recommended the discharge of the Petitioner Freeman.

Freeman brought two separate actions in North Carolina state

court. The Respondents removed the cases to U.S. District

Court.

The U.S. District Court dismissed both of Petitioner

Freeman’s state law actions, one against Duke Power Company

and one against Cindy Thaxton and George Kwascha, on the

bases that all of the state law claims raised in the two cases were

either preempted by §30/ of the Labor Management Relations

Act (LMRA) and failed to state claims under the LMRA, or, if

not preempted, failed to state a claim under state law. The U.S.

Court of Appeals for the Fourth Circuit affirmed. The

following questions are presented:

l. Did the Fourth Circuit err in holding, in conflict

with the decisions of this Court, that the

Freeman Agreements were not independent of

the collective bargaining agreement and,

therefore, were preempted by §301 of the Labor

Management Relations Act?

3 Did the Freeman Agreements constitute “last

chance agreements” and, thus, “contracts” under

§301 of the LMRA?

li

Did the Fourth Circuit err in holding, in conflict

with its own decisions and decisions of this

Court, that Freeman’s claim for tortious

interference with co>tract was both preempted

by §301, LMRA, and, simultaneously, failed to

state a valid §301 claim?

Did the Fourth Circuit err in holding that its

decision in Int’] Union, United Mine Workers of

Am. v. Covenant Coal Corp., 977 F.2d 895, 899

(4” Cir. 1992), simultaneously preempted and

barred a state law tort claim for tortious

interference with contract?

Did the Fourth Circuit err, in departing form the

accepted course of judicial proceedings, by

overlooking the material legal matter that the

Petitioner-Appellant’s state law claim for

interference with contract stated a claim upon

which relief can be granted?

Did the Fourth Circuit err, in departing form the

accepted course of judicial proceedings, by

overlooking the material legal matter that the

Petitioner-Appellant’s state law claim for unfair

and deceptive trade practices stated a claim

upon which relief can be granted?

iil

PARTIES TO THE PROCEEDING

The parties to these proceedings are set forth in the case

captions. Petitioner Freeman was the Petitioner-Appellant in

both cases below. Respondents were Respondents-Appellees

in their respective case below.

IV

TABLE OF CONTENTS

QUESTIONS PRESENTED 2... 22 cc ccccccecccsscees i

PARTIES TO THE PROCEEDING ................ ill

TABLE OF CONTEND 2c ccccccctctscnccesccess Iv

TABLE OF AUTHORITIES .......ccscccccccceas vil

TABLE OF APPENDICES none ccscccscccccesees Vill

TTT ccc cccccnecksssccesasceseass l

DBCIBIOINS BRIIIW onc cccsccccsavescccceses l

FETA TI nk ob cee awnecssecswavaccdonsepes “a

STATEMENT OF THE CASE ..........0222ceee: 2

a Peer rrr rT ToT errr T er Sie Pry S 3

B. Proceedings Below ...........ccccssccsesens 9

1. The District Court ............2.2.:. 9

2. The Courtof Appeals .............. 10

REASONS FOR GRANTING THE WRIT

I. The U.S. Court of Appeals for the Fourth

Circuit has decided an important federal

question in a way that conflicts with relevant decisions

of this Court, consideration

by this Court is therefore necessary to secure

and maintain uniformity of the Court’s

er ee

II.

- Vv

decisions, and this case presents

questions of exceptional importance

that have not been, but should be,

resolved by this Court .................... 13

A. The Fourth Circuit’s decision conflicts with

the decision of the United States Supreme

Court in Caterpillar, Inc. v.

Williams, 482 U.S. 386 (1987) ........ 13

B. This case involves one or more

questions of exceptional importance

in labor law jurisprudence that has not been,

but should be, settled

hein NT RS Se Ly CE 15

The U.S. Court of Appeals for the Fourth

Circuit has decided an important question

of federal law that has not been, but

should be, settled by this Court ............. 16

A. The decision of the Fourth Circuit

conflicts with that Court’s decision in

Jackson v. Kimel, 922 F.2d 1318,

[Sal GO Pe vie 17

B. An injust and harsh result arises from the

decision of the Fourth Circuit because Mr.

Freeman is left without remedy against

Thaxton and Kwascha .............. 19

c. The decision of the Fourth Circuit departed

from the accepted course of judicial

proceedings by overlooking the material legal

matter that the Petitioner-Appellant’s state law

vi

claim for interference with contract

stated a claim upon which relief can

—) PPeererer Pee ee 21

D. The decision of the Fourth Circuit departed ;

from the accepted course of judicial

proceedings by overlooking the material legal

matter that the Petitioner-Appellant’s state law

claim for unfair and deceptive trade

practices stated a claim upon which

solsef cam Ge qramted ... wc ccccccccces 22

CALM AMMEES cceccccééeccuscuaepesensesecus 24

FEU MNUE cc daccecceeictssensevs saeneuaueens la

|

,

)

vii

TABLE OF AUTHORITIES

Cases

Allis-Chalmers Corp. v. Lueck,

471 U.S. 202, 105 S.Ct. 1904,

re ra er 15

Bloch v. Paul Revere Life Ins. Co.,

WED TOK. AOD. TIO GOON) os ccccccccacsccccccces a ae

Caterpillar, Inc. v. Williams,

482 U.S. 386, 107 S.Ct. 2425,

96 L.Ed.2d 318 (1987) ................. 10, 13, 14, 15

Davis v. Bell Atlantic-West Virginia, Inc.,

110 F.3d 245 (4th Cir. 1997)... 0.0 .0000002.. 10, 14, 16

Durling v. King

554 S.E.2d 1 (N.C. Ct. App. 2001) 2.2.6... eee ee 11

Int'l Union, United Mine Workers of Am. v. Cov. Coal Corp.,

977 F.2d 895 (4" Cir. 1992) 2... ccc ccc ene 11, 20

Jackson v. Kimel,

992 F.2d 1318 (4th Cir. 1993)... 2.000000... 17,19

Marion v. Virginia Elec. & Power Co..,

Bee oe Oe CAGE, WII) nnn ccc ccccccccccccaccce 14

Sara Lee Corp. v. Carter,

351 N.C. 27, 519 S.E.2d 308 (1999) ................ 23

Scott v New United Motor Mfg., Inc.,

632 F.Supp. 891, 894 (N.D.Cal. 1986) .............. 15

General Statutes

N.C.G.S. §75-1.1(B) 2... ee eee oat ole eae 9,11, 23

Vili

TABLE OF APPENDICES

Appendix A

Judgment and Memorandum Opinion of the

United States District Court for the Middle

District of North Carolina

EE TR AE occ c ac eccesndacesvacoeens la

Appendix B

Opinion and Order of the U.S. Court of

Appeals for the Fourth Circuit

i PPT ETT Pere eee TT eee lb

Appendix C

Order of the U.S. Court of Appeals for the

Fourth Circuit Denying Rehearing and

Rehearing En Banc

A Sh Se 4 via cosa eek eedadeeedaows Ic

l

INTRODUCTION

In July of 1999, after having twice unsuccessfully

attempted to terminate the employment of Petitioner Albert L.

Freeman for “moonlighting”, Respondent Duke Power

terminated Mr. Freeman’s employment for allegedly breaching

a “no-moonlighting” agreement between Freeman and Duke

Power. Respondents Thaxton and Kwascha orchestrated and

recommended the discharge of the Petitioner Freeman.

Petitioner Freeman brought an action in North Carolina

state court against Duke Power. Petitioner Freeman brought a

separate state court action against Thaxton and Kwascha.

Respondents in both cases removed the cases to the U.S.

District Court. The U.S. District Court dismissed both of

Petitioner Freeman’s state law actions on the bases that all of

the state law claims raised in the two cases were either

preempted by §30/ of the Labor Management Relations Act

(LMRA) and failed to state claims under the LMRA, or, if not

preempted, failed to state a claim under state law. The U.S.

Court of Appeals for the Fourth Circuit affirmed.

DECISIONS BELOW

The decision of the United States Court of Appeals for

the Fourth Circuit in these consolidated cases is an unpublished

opinion. Albert L. Freeman v. Duke Power, et al., 03-2146, CA

00-665-1 (4 Cir., September 27, 2004); Albert L. Freeman v.

Cindy Thaxton, George Kwasha, 03-2147, CA-02-630-1 (4

Cir., September 27, 2004). The decision of the United States

Court of Appeals for the Fourth Circuit denying the Petition for

Rehearing and Rehearing En Banc is unreported. Albert L.

Freeman v. Duke Power, et al., 03-2146, CA 00-665-1 (4 Cir.,

October 26, 2004); Albert L. Freeman v. Cindy Thaxton,

George Kwasha, 03-2147, CA-02-630-1 (4 Cir., October 26,

2004). The decision of the U.S. District Court in these

2

consolidated cases is unreported. Albert L. Freeman v. Duke

Power, etal., 1:00CV00665 (MDNC, August 15, 2003); Albert

L. Freeman v. Cindy Thaxton, George Kwasha, 1:02CV00630

(MDNC, August 15, 2003).

JURISDICTION

The United States Court of Appeals for the Fourth

Circuit entered its judgment in the consolidated cases on

September 27, 2004. The Court of Appeals denied Mr.

Freeman’s petition for rehearing and rehearing en banc on

October 26, 2004. Petitioner now files this Petition for Writ of

Certiorari. This Court has jurisdiction under 28 U.S.C.

$1254(1).

STATEMENT OF THE CASE

Petitioner Freeman filed the first underlying action on

June 30, 2000, in the General Court of Justice, Superior Court

Division, Alamance County, North Carolina. Petitioner

Freeman alleged several causes of action against Duke Power,

including breach of contract, wrongful discharge, a violation fo

the N.C. Constitution, and bad faith discharge.

Petitioner Freeman filed the second underlying action on

June 28, 2002, in the General Court of Justice, Superior Court

Division, Alamance County, North Carolina. Petitioner

Freeman alleged several causes of action against Cindy Thaxton

and George Kwascha, including interference with contract and

unfair deceptive trade practices.

The Respondents in both actions filed notices of removal

to the U.S. District Court. The U.S. District Court found that

jurisdiction was proper pursuant to §301 of the Labor

Management Reporting Act.

Pee ee

3

A. Facts

No. 03-2146 (Action against Duke Power)

‘ The Petitioner-Appellant Freeman was first employed by

Duke Power in June, 1983, as a

Transmission Line helper (Jt. App., p. 9). Approximately

eighteen (18) months later, Petitioner-Appellant Freeman

transferred to the Burlington operations and assumed the duties

of Distribution Line Technician C, i.e., a lineman. Freeman’s

duties as a Distribution Line Technician included, but were not

limited to, the installation of utility poles, troubleshooting

interference and after-hour problems, electrical work at

transformer boxes on utility poles, the connection of power lines

at customers’ meter boxes, and lead man over a Duke Power

line truck (Jt. App., p. 9). As a Distribution Line Technician,

Freeman had minimal contact with the owner’s property, i.e.,

hooking cable from the utility pole to the meter box on the

Owner’s property. As a lineman for Duke Power, Freeman

worked the power distribution lines, drove the Duke Power

truck, and was paid an initial hourly rate of $7.25 an hour (Jt.

App., p. 9-10).

Petitioner-Appellant Freeman is married and now has

two (2) children. In 1984, Freeman obtained a limited electrical

contractor’s license which allowed him to do electrical wiring

jobs where the contract amount was less than $25,000.00.

Thereafter, Freeman “moonlighted” as an electrician to support

his family (Jt. App., p. 10). As an electrician during his off-duty

time, Freeman did small electrical wiring jobs, such as installing

light fixtures, ceiling fans, telephone jacks, etc. This electrical

work was performed primarily in residences and, occasionally,

in small businesses. Upon information and belief, other Duke

Power employees also “moonlighted” and some of these

employees “moonlighted” as electricians. At all relevant times

hereto, Duke Power had no policies proscribing “moonlighting”

and had negotiated no restrictions on “moonlighting” in the

4

Union Contract (Jt. App., p. 10).

During the period from 1984 to 1994, Duke Power was

aware that Freeman “moonlighted” as an electrician and took no

employment action against him (Jt. App., p. 10). In fact, on

numerous occasions prior to 1994, Duke Power utilized

Freeman’s services as an electrician in the rewiring of Duke

Power buildings. On occasion, Duke Power even relieved

Freeman of his lineman duties so that Freeman could rewire

Duke Power buildings during regular business hours. Duke

> 66

Power acquiesced to, and ratified, Freeman’s “moonlighting”

(Jt. App., p. 10).

Petitioner-Appellant Freeman was a good employee and

performed every aspect of his job satisfactorily at Duke Power.

At all times relevant hereto, the Petitioner-Appellant observed

and complied with the instructions and regulations of Duke

Power and performed loyal and efficient work and service to

Duke Power. Freeman’s “moonlighting” did not adversely

affect either his attendance or his work performance at Duke

Power (Jt. App., pp. 10-11).

Duke Power is one of the largest public utilities in the

nation whereas Albert Freeman is an individual who was trying

to support his family. Freeman’s off-duty work as an electrician

in Alamance County did not even closely resemble the power

distribution services provided by Duke Power to its customers

in North and South Carolina. Freeman’s “moonlighting” did

not have, and could not have had, an adverse economic impact

9, 66

upon Duke Power (Jt. App., p. 11). Freeman’s “moonlighting”

posed no competitive threat, direct or indirect, to Duke Power. 7

Freeman solicited no work away from Duke Power and did not

cause Duke Power resources to be used to advance his

“moonlighting.” Freeman did not promote, or do, his electrical

work during his normal Duke Power working hours, except

when specifically requested to perform such services for Duke

Power (Jt. App., p. 11).

However, in or about 1990, Duke Power transferred a

Tee Se LT ee Tee ee ee ee ee Te a

5

\

district manager, Ed Holt, to Burlington from Reidsville. Holt

disliked “moonlighting” in general and Freeman’s

“moonlighting” in particular. On one occasion in 1993, Holt

wrongly accused Freeman of “moonlighting” during his

workday at Duke Power. The Petitioner-Appellant is informed

and believes and, therefore, alleged that Duke Power, though its

agents and employees, embarked upon a course of action to

prevent his “moonlighting” and to deny to him and his family

the enjoyment of the fruits of his own labor (Jt. App., p. 11).

On or about January 26, 1994, Freeman was suspended

and then discharged from his employment as a lineman with

Duke Power for allegedly “removing a service drop and meter

and disconnecting service to a customer without authorization

from Duke Power Company” (Jt. App., pp. 11-12). While

“moonlighting” after hours, Freeman had disconnected the

power to a customer’s residence and brought the meter box

back to Duke Power. Local Union 962, IBEW, filed a

grievance under the grievance provision of the Union Contract

on behalf of Freeman. Prior to the referral of this grievance to

arbitration as provided by the Union Contract, Duke Power and

Local 962 settled the grievance and Duke Power “struck a

bargain with” Freeman. As part of this settlement, Duke Power

placed Freeman under a restrictive employment contract with

Duke Power (Jt. App., p. 12).

In settlement of this grievance, Duke Power, Local 962,

and Freeman entered into a Grievance Resolution (hereinafter

“Agreement’) on or about June 20, 1994 (Jt. App., p. 12).

Under that Agreement, Duke Power agreed to reinstate

Freeman to his position of Distribution Line Technician with no

loss of service but with no back pay. The Parties further agreed

that, should Freeman thereafter engage directly or indirectly in

the business of electrical contracting while employed with Duke

Power, Duke Power could terminate Freeman’s employment for

that reason (Jt. App., p. 12). The Agreement further provided

that Duke Power's decision to discharge Freeman for engaging

ae

6

in the business of electrical contracting “shall be final and

shall not be subject to review under any grievance or

arbitration provision under any Collective Bargaining

Agreement in effect at the time of his discharge” (Jt. App., p.

12). The Agreement further provided that Freeman could

continue to do small incidental wiring jobs for his close friends

or relatives, provided he did not solicit, or advertise for, such

work. The Agreement also provided that the resolution with

Freeman would not be deemed precedent for similar situations

with other employees (Jt. App., pp. 12-13). Upon information

and belief, Freeman was singled out by Duke Power while

similarly-situated employees were not disciplined for

“moonlighting” as electricians or otherwise.

The Defendant-Appellee Duke Power, upon information

and belief, drafted this Agreement for signature by the

Petitioner-Appellant Freeman. Duke Power drafted the

Agreement and the language of the Agreement should be 3

construed strictly against Duke Power. ;

Petitioner-Appellant Freeman abided by the language of

the Agreement, notwithstanding the fact that the Agreement

purported to restrain his fundamental right to work and to

engage in a lawful business. However, in June of 1996, Duke

Power again suspended and proposed to discharge Freeman

allegedly for engaging in the business of electrical contracting

(Jt. App., p. 13). Duke Power claimed that Freeman had

breached the Agreement of June, 1994, which Freeman denied.

In order to resolve this dispute, Duke Power and

Freeman, who was represented by his attorney, agreed to an

Amendment to the Grievance Resolution (hereinafter “Amended

Agreement’), dated July 3, 1996 (Jt. App., pp. 13-!4). The

Amended Agreement provided that Freeman was prohibited

from being or becoming employed on a full or part-time basis

with any person, firm, or corporation engaging in the business

of electrical contracting (Jt. App., p. 14). The “business of

electrical contracting” was defined in the Amended Agreement

7

as “owning and operating a business for the purpose of profit by

providing electrical contracting services.” The Amended

Agreement further provided that Freeman “will not take out any

electrical permit or permit for the purpose of electrical wiring in

his name under his electrical contractor’s license except as

necessary for Mr. Freeman to perform electrical work on

property he owns” (Jt. App., p. 14). The Amended Agreement

also provided that Freeman “may wire any property which he

either individually or with his spouse owns, with the exception

of any houses being built for resale” (Jt. App., p. 14).

The Respondent-Appellee Duke Power, upon

information and belief, drafted the Amended Agreement which

was executed by Freeman on or about July 3, 1996. Duke

Power agreed not fo terminate Freeman’s employment for the

alleged reason of engaging in the business of electrical

contracting prior to July 3, 1996. In return, Freeman agreed not

to engage, directly or indirectly, in the business of electrical

contracting in the future. Notwithstanding the fact that Duke

Power had authored the language of the earlier Agreement,

Duke Power sought to make the language of the Amendment

even more restrictive in 1996. Upon information and belief,

Duke Power realized that the language of the Agreement was

unclear and sought to “tighten the noose” around the Petitioner-

Appellant and his means of supporting his family with the

Amended Agreement (Jt. App., p. 14).

Freeman abided by, and complied with, the language of

the Amended Agreement. Nonetheless, in July of 1999, after

having twice unsuccessfully attempted to discharge Freeman for

the same reason, the Respondent-Appellee Duke Power,

through Respondents George Kwascha and Cindy Thaxton,

suspended and then terminated Freeman’s employment for

allegedly breaching the Amended Agreement. Freeman denied

that he had breached the language of the Amended Agreement

(Jt. App., p. 15). Local 962 declined to file a grievance and

referred Freeman to Duke Power.

8

Freeman made demand upon Duke Power to reinstate

him to his job position with no loss in service. Duke Power

refused to do so.

No. 03-2147 (Action against Thaxton and Kwascha)

Respondents-Appellees Thaxton and Kwascha,

management employees with Duke Power, disliked Freeman,

resented his large home in Elon College, the property holdings

of Freeman and his spouse, and his affluent lifestyle, and

harbored personal hostility and ill-will towards Freeman (Jt.

App., p. 231).

In July of 1999, Respondents-Appellees Thaxton and

Kwascha, without proper investigation and without a thorough

review of the facts, suspended Freeman from his job duties,

recommended his dismissal, and orchestrated the termination of

Freeman’s employment from Duke Power for allegedly

“moonlighting” (Jt. App., p. 231).

Thaxton and Kwascha exceeded their authority, in order

to prevent the continuation of Freeman’s employment with

Duke Power, by unfairly singling Freeman out due to his

success and actively seeking a pretext to wrongfully discharge

Freeman for the business activity of “moonlighting” (Jt. App.,

p. 231).

The acts and conduct of Thaxton and Kwascha were

done outside the scope of their employment, in bad faith, for a

wrongful purpose, with malice, without any legal justification,

and for a reason not reasonably related to the protection of a

legitimate business interest (Jt. App., p 232).

Respondents-Appellees’ unfair and deceptive

acts and conduct in causing the discharge of Freeman for

alleged “moonlighting” affected commerce and were acts and

practices “in or affecting commerce” and constitute unfair and

deceptive trade practices, which are proscribed by Chapter 75-

1.1 of the North Carolina General Statutes (Jt. App., p. 233).

9

B. Proceedings Below

Freeman brought an action in North Carolina state court

against Duke Power, alleging breach of contract, wrongful

discharge, violation of North Carolina’s Constitution, and bad

faith discharge. He brought a separate state court action against

Cindy Thaxton and George Kwascha, his immediate

supervisors, for interference with contract and violation of

North Carolina’s unfair and deceptive trade practices act. The

Respondents in both cases removed the cases to U.S. District

Court and filed motions to dismiss the cases for failure to state

a claim. The Respondents also sought to consolidate the cases

in the U.S. District Court. Petitioner Freeman resisted the

motions and moved to remand the cases back to state court, to

amend his complaint, to exclude evidence attached to the

Respondents’ motions to dismiss, and to conduct discovery.

l. The District Court.

The U.S. District Court denied Freeman’s motion to

remand the cases to state court because the court determined

that the complaints in both cases raised issues arising under

federal law, specifically the LMRA. The court determined that

Freeman’s claims against Duke Power for breach of contract

and wrongful discharge were preempted by §301 of the LMRA

and granted the Respondents’ motions to dismiss. The District

Court denied Freeman’s motion to amend his complaint to

allege that he was an at-will employee because the Court

concluded that the allegation would not have changed the fact

that the claim was preempted Section 301, LMRA. The District

Court dismissed the bad faith discharge and state constitutional

claims as failing to state claims cognizable under North Carolina

law.

The District Court determined that Freeman’s claim

against the individual Respondents for interference with

10

contract was also preempted by the LMRA and subject to

dismissal. It determined that, even if the unfair and deceptive

trade practices claim was not preempted by the LMRA, such a

claim was unavailable under North Carolina law in the

employment setting. The District Court found that the

Respondents’ motions to consolidate and Freeman’s motions to

exclude evidence and conduct discovery were all mooted by the

dismissals. Petitioner Freeman appealed.

y The Court of Appeals.

The U.S. Court of Appeals affirmed the judgment of the

U.S. District Court in both consolidated cases.

No. 03-2146 (Action against Duke Power)

In affirming, the U.S. Court of Appeals for the Fourth

Circuit found that, although disputes arising over independent

employment contracts unrelated to a CBA are not preempted by

$301 of the LMRA, see Caterpillar Inc. v. Williams, 482 U.S.

386, 394-95 (1987), the Grievance Resolution and the

Amendment at bar were not independent of the CBA. The

Court of Appeals noted that the employees in Caterpillar had

entered separate management contracts and only later became

subject to a CBA when they were demoted. Their state law

action was based on the management contracts, not anything

derivative of the CBA, and thus was not preempted by the

LMRA. /d. at 395 & n.9. The Court of Appeals than concluded

that the same could not be said in the instant case, “as the

Grievance Resolution and Amendment derive their ‘entire

vitality and legitimacy’ from CBA,” citing Davis v. Bell

Atlantic-West Virginia, Inc., 110 F.3d 245, 248 (4" Cir. 1997).

No. 03-2147 (Action against Thaxton and Kwascha)

11

In affirming, the U.S. Court of Appeals observed that,

Applying the most natural interpretation of this language, we

[have previously held] that a suit against a non-signatory of a

contract cannot be considered a suit for violation of the

contract. Jnt’l Union, United Mine Workers of Am. v.

Covenant Coal Corp., 977 F.2d 895, 899 (4" Cir. 1992).

Bound, as both it and we are by prior controlling and

unquestioned circuit precedent, the district court properly

dismissed Freeman’s claim against Thaxton and Kwascha for

interference with contract. (Opinion, p. 12).

The Fourth Circuit further observed that,

Although N.C.G.S. §75-1.1(b) defines “commerce”

broadly as “business activities, however denominated,”

the Supreme Court of North Carolina has cautioned that

the act “is not intended to apply to all wrongs in a

business setting,” including most employment disputes.

Dalton v. Camp, 548 S.E.2d 704, 711 (N.C.

2001),(distinguishing Sara Lee on the basis that the

employee in Sara Lee owed a fiduciary duty to his

employer, and the employee was entrenched in a buyer-

seller relationship with his employer, which fell squarely

within the purview of the unfair trade practices act).

Freeman’s allegations that the Respondents caused

Duke Power to terminate him fails to meet the

requirement that the Respondents’ acts be in or

affecting commerce, see Durling v. King 554 S.E.2d 1,

4-5 (N.C. Ct. App. 2001) (affirming summary judgment :

where “no evidence was presented that the subject

transactions had any impact beyond the parties’

employment relationships”), and he therefore failed to

state a claim under the state unfair and deceptive trade

practices act. (Opinion, p. 13).

12

The U.S. Court of Appeals affirmed the district court’s

order denying Freeman’s motions to remand and dismissing

Freeman’s complaints against Duke Power and against Thaxton

and Kwascha. The U.S. Court of Appeals also affirmed the

district court’s denial of the various pending motions as the

dismissal of all claims made the motions moot.

| Mudwend.

13

REASONS FOR GRANTING THE WRIT

No. 03-2146 (Action against Duke Power)

I. The U.S. Court of Appeals for the

Fourth Circuit has decided

an important federal question in a way

that conflicts with relevant decisions of

this Court, consideration by this Court

is therefore necessary to secure and

maintain uniformity of the Court’s

decisions, and this case presents

questions of exceptional importance that

have not been, but should be, resolved

by this Court.

The Fourth Circuit’s decision in the case at bar

conflicts with a decision of the United States Supreme Court

and this proceeding involves one or more questions of

exceptional importance in labor law jurisdiction which should

be resolved by this Court.

A. The Fourth Circuit’s decision conflicts

with the decision of the United States

Supreme Court in Caterpillar, Inc. v.

Williams, 482 U.S. 386 (1987).

Employees covered by collective-bargaining

agreements are entitled “to assert legal rights

independent of that agreement, including state-law contract

rights, so long as the contract relied upon is not a collective-

bargaining agreement.” Caterpillar, Inc. v. Williams, 482

U.S. 386, 396, 107 S.Ct. 2425, 2431, 96 L.Ed.2d 318

(1987).

Citing Caterpillar, Inc. v. Williams, supra, the Fourth

14

Circuit conceded that disputes arising over independent

employment contracts unrelated to a CBA are not preempted

by Section 301 of the LMRA. (Opinion, p.6). However, the

Fourth Circuit distinguished Caterpillar from the instant case

(Opinion, p.7).

Private employment agreements may borrow terms

from a collective-bargaining agreement without bringing the

private agreement within the scope of Section 301 of the

LMRA. Marion v. Virginia Elec. & Power Co., 52 F.3d 86,

89 (4th Cir. 1995). This is especialiy so, where as her-, the

resolution of the claim did not depend on the meaning of, or

require the interpretation of, a collective-bargaining

agreement’. The Freeman Agreements do not implicate

provisions of the collective-bargaining agreement nor is the

subject matter of these Agreements (i.e., moonlighting)

covered by the collective-bargaining agreement. The

Freeman Agreements specifically provided that disputes

would not be resolved under the grievance and arbitration

provisions of the collective-bargaining agreement. Hence, no

interpretation of the collective-bargaining agreement would

necessarily be involved.

'The Respondents-Appellees argued that Davis v. Bell Atlantic-

West Virginia, Inc., 110 F.3d 245, 248 (4th Cir. 1997) “implicitly”

held that a grievance settlement agreement was a contract within

the preview of Section 301 of the LMRA. However, the complaint

in that case specifically alleged a breach of the collective-

bargaining agreement which clearly provided Section 301 pre-

emption. While the language of the Davis opinion concerning the

settlement agreement appears to be dicta, an interpretation of the

settlement agreement in Davis required reference to terms of the

collective-bargaining agreement. Absenteeism and tardiness were

covered terms under the collective bargaining agreement. This is

not so in the instant case. As noted by the Responuents-Appellees,

no relevant Fourth Circuit or Middle District precedent exists on

“last chance” agreements as “contracts” under Section 301 of the

LMRA.

15

The district court specifically noted that it found it

unnecessary to consider the settlement agreements and the

collective bargaining agreement in reaching its decision (Jt.

App., p..215). The Fourth Circuit affirmed the order of the

district court without commenting on this anomaly. Section

301 of the LMRA provides a basis for federal jurisdiction

because collective-bargaining agreements provide the

alternative and exclusive remedy of arbitration. See Allis-

Chalmers Corp. v. Lueck, 471 U.S. 202, 211, 105 S.Ct. 1904,

1911, 85 L.Ed.2d 206 (1985). As noted above, the Supreme

Court in Allis-Chalmers emphasized that, “[W]e [do not]

hold that every state-law suit asserting a right that relates in

some way to a provision in a collective bargaining agreement,

or more generally to the parties to such an agreement,

necessarily is pre-empted by § 301.” Jd. at 1916. Moreover,

the A/lis-Chalmers’ reliance on arbitration does not apply

here. Under the private agreements, Mr. Freeman did not

have access or recourse to the grievance and arbitration

procedures of the coliective-bargaining agreement. The

collective-bargaining agreement in this case provided the

Petitioner-Appellant with no remedy at all. “It would be

anomalous to hold that Section 301 preempts his state

remedies because federal law provides the exclusive remedy,

only then to discover that Petitioner-Appellant had no

remedies under federal law.” Scott v New United Motor

Mfgz., Inc., 632 F.Supp. 891, 894 (N.D.Cal. 1986).

The Fourth Circuit’s decision conflicts with the

decision of the United States Supreme Court in Caterpillar,

- Inc. v. Williams, 482 U.S. 386 (1987). This Court should

grant review to resolve this conflict.

B. This case involves one or more questions

of exceptional importance in labor law

jurisprudence that has not been, but

should be, settled by this Court.

16

Case No. 03-2146 raises the important question

of whether or not the settlement agreements in the case at bar

were “last chance agreements” as that term is used in labor

law jurisprudence. No relevant Fourth Circuit precedent

exists on “last chance agreements” as “contracts” under

Section 301 of the LMRA. The Respondents-Appellees

argued that the agreements in the instant case were “ast

chance agreements.” (Respondents-Appellees Brief, pp. 15-

19). In its Opinion, the Fourth Circwit relied upon Davis v.

Bell Atlantic-W.Va., Inc, 110 F.3d 245 (4th Cir. 1997),

wherein that Circuit construed a settlement agreement as a

“rider to the CBA” (Opinion, p. 6). No Fourth Circuit law

exists on the difference, if any, between a “rider” and a “last

chance agreement” to a CBA. It is unclear as to whether or

not the Fourth Circuit in the case at bar found the agreements

at issue to be “riders” or “ last chance agreements,” or none

of the above. This question is of exceptional impor‘ance in

labor law jurisprudence. This Court should grant review to

resolve this important question of federal law.

No. 03-2147 (Action against Thaxton and Kwascha)

Il. The U.S. Court of Appeals for the

Fourth Circuit has decided an important

question of federal law that has not

been, but should be, settled by this

Court.

In the action against Thaxton and Kwascha, the U.S.

Court of Appeals for the Fourth Circuit has decided an

important question of §301, LMRA, preemption of state law

tort claims involving claims against employees in their

individual capacities. The Petition for Writ of Certiorari

should be granted to resolve this question and to secure and

Poe eer my eas te ee ee

17

maintain the uniformity of the decisions of this Court.

A. The decision of the Fourth Circuit

conflicts with that Court’s decision in

Jackson v. Kimel, 922 F.2d 1318, 1327 (4

Cir 1993).

The Opinion of the Fourth Circuit is in conflict

with its decision in Jackson v. Kimel, 922 F.2d 1318, 1327

(4th Cir. 1993), and that conflict is not addressed in the

Opinion.

The U.S. Court of Appeals for the Fourth Circuit, in

Jackson v. Kimel, 992 F.2d 1318, 1327 (4th Cir. 1993), held

that a North Carolina tort claim against an individual

supervisor was not properly removed to federal court. In

Jackson, supra, the Court of Appeals reversed the judgment

of the U.S. District Court that an intentional infliction of

emotional distress claim against a supervisor in his individual

capacity was preempted by § 301 of the LMRA. In finding

no preemption, this Court of Appeals stated that,

In this case, interpretation of the collective bargaining

agreement is not necessary to determine whether

Kimel owed a duty to refrain from the alleged

conduct; the collective bargaining agreement could

not authorize his alleged behavior.

Id. at 1327.

In a concurring opinion in Jackson, Circuit Judge

Phillips noted that, “None of the Supreme Court decisions

establishing the contours of § 301 preemption of state law

tort claims involved either original or removed claims

against employees in their individual capacities.” Jackson

at 1328, fn.1. Circuit Judge Phillips further noted that,

So far as I know, neither the Supreme Court nor we

18

ever have held that a union employee’s state-law tort

claim against a fellow-employee that is removed

pendent to a joined tort claim against the employer is

subject, like the claim against the employer, to being

‘recharacterized’ by preemption as a § 301 claim and

so made subject to federal defenses unique to such a

claim.

Id. at 1328.

Finding that such claims should not be subject to §

301 preemption, Judge Phillips warned that,

An almost scandalous consequence would be that by

that means a fellow-employee defendant to a

meritorious state-law tort action would be enabled,

following removal of the pendent claim against him, to

defeat it by invoking § 301 defenses (failure to

exhaust grievance procedures, short limitations

period) that are only available to one who properly

can be charged as a signatory with breaching a labor

contract.

Id. at 1328 (Emphasis added).

In the instant case, the Petitioner-Appellant’s

Verified Complaint was based on state law, was not

inextricably intertwined with construction and application

of the terms of the collective bargaining agreement, and

involved purely factual questions concerning the conduct

of the Petitioner-Appellant and the conduct and motivation

of the individual Respondents. The Petitioner-Appellant’s

state law claims for interference with contract and unfair

and deceptive trade practices were not pre-empted by the

LMRA.

——

——EE

————— ee —

—eeooorrerew—a—ereoeoor SS

19

As Circuit Judge Phillips stated in Jackson, supra,

“None of the Supreme Court decisions establishing the

contours of § 301 preemption of state law tort claims

involved either original or removed claims against

employees in their individual capacities.” Jackson at

1328, fn.1 (Emphasis added).

Mr. Freeman sued Thaxton and Kwascha as

individuals. Neither were signatories to the agreements at

issue in Case No. 03-2146, the action against Duke Power.

Case No. 03-2147, the action against Thaxton and

Kwascha, concerned the conduct and motivation of

Thaxton and Kwascha and, thus, did not require or depend

upon an interpretation of the CBA. Contrary to the

Opinion of the Fourth Circuit, no interpretation of the

extent of Thaxton and Kwascha’s supervisory authority as

defined in the CBA was required (Opinion, pp. 8-9). The

“almost scandalous consequence” which Judge Phillips

warned of in Jackson v. Kimel, supra, at 1328, resulted in

Case No. 03-2147. This Court should grant review to

resolve this conflict and to settle this important question of

federal law.

B. An injust and harsh result arises from

the decision of the Fourth Circuit

because Mr. Freeman is left without

remedy against Thaxton and

Kwascha.

The Fourth Circuit overlooked the material legal

matter that Mr. Freeman is left without a remedy against

Thaxton and Kwascha as a result of the Fourth Circuit’s

decision. The decision works an injustice upon Mr.

Freeman because the Fourth Circuit’s decision bars a

federal cause of action for tortious interference with an

employment agreement against nonsignatories to that

20

agreement (i.e., Thaxton and Kwascha) and, :

simultaneously, preempts a similar cause of action

premised upon state law.

On the one hand, the Fourth Circuit relied upon

this Court’s decision in /nternational Union, UMWA v.

Convenant Coal, 977 F.2d 895 (4th Cir. 1992), in holding

that Mr. Freeman’s claim against Thaxton and Kwascha

for tortious interference with contract was preempted by

Section 301 of the LMRA (Opinion, p. 9). On the other

hand, the Fourth Circuit relied upon the very same decision

in Covenant Coal Corp., supra, to hold that the district

court properly dismissed Freeman’s claim against Thaxton

and Kwascha for interference with contract (Opinion, p. 4

12). B

The Fourth Circuit, in Jnternational Union, UMWA

v. Convenant Coal, 977 F.2d 895 (4th Cir. 1992),

observed that,

We are cognizant of the apparent paradox, inherent

in our decision of this case, holding that Section

301of the LMRA bars a federal cause of action for

tortious interference with contract, yet

simultaneously preempts the identical state law Fe

cause of action. This result is not as harsh as it 2

would initially appear, however, because the Union

is not left without remedy. . .Because an

adequate forum exists for resolution of the Union’s

claims, we discern no injustice in the finding that

section 301 of the LMRA serves both to bar a

federal cause of action for tortious interference

with a collective bargaining

agreement against a non-signatory of that

agreement, and to preempt a similar cause of action

premised on state law.

Id. at 899-900.

In another case cited by the Fourth Circuit in its

Opinion, Kimbro v. Pepsico, Inc., 215 F.3d 723 (7th Cir.

2000), the Seventh Circuit of Court of Appeals also

observed that,

It is true that in a case in which the defendant is not

a party to the contract, the extinction of state

causes of action is questionable because it could

leave the Petitioner-Appeallant remediless.

Id. at 727.

The Fourth Circuit’s decision leaves Mr. Freeman

without a remedy against Thaxton and Kwascha. This is a

harsh and unjust result. This Court should grant review to

resolve this conflict and to settle this important question of

federal law.

oe The decision of the Fourth Circuit

departed from the accepted course of

judicial proceedings by overlooking the

material legal matter that the Petitioner-

Appellant’s state law claim for

interference with contract stated a claim

upon which relief can be granted.

The Petitioner-Appellant’s Complaint stated a

valid claim for interference with contract

(Jt. App., pp. 231-232). The Verified Complaint alleged

the requisite elements of the tort of interference with

contract by Thaxton and Kwascha. In particular, the

Verified Complaint alleged that the acts and conduct of

Thaxton and Kwascha were done outside the scope of

22

their employment, in bad faith, for a wrongful purpose,

with malice, without any legal justification, and for a

reason not reasonably related to the protection of a

legitimate business interest (Jt. App., p. 232); Bloch v.

Paul Revere Life Ins. Co., 143 N.C. App. 228, 239-240

(2001).

In Bloch v. Paul Revere Life Ins. Co., 143 N.C.

App. 228, 239-240 (2001), the North Carolina Court of

Appeals held that, with respect to a claim for tortious

interference with contract, “non-outsider” status does not

insulate an individual defendant from liability where the

defendant acts without a reasonable-good faith motive.

Bloch, supra, at 239-240. Bad motive or wrongful

purpose is the essence of a claim for tortious interference

with contract.

The Petitioner-Appellant’s claim for tortious

interference with contract stated a claim under North

Carolina law which the Fourth Circuit overlooked in

concluding that the district court properly dismissed Mr.

Freeman’s claim against Thaxton and Kwascha for

interference with contract.

D. The decision of the Fourth Circuit

departed from the accepted course of

judicial proceedings in overlooking the

material legal matter that the Petitioner-

Appellant’s state law claim for unfair

and deceptive trade practices stated a

claim upon which relief can be granted.

Petitioner-Appellant also alleged in his Verified

Complaint’ that the Respondents’ unfair and deceptive acts

? In paragraph 11, page 3, of the Petitioner-Appellant’s Verified

Complaint, the Petitioner-Appellant alleged that the Respondents

23

and conduct in causing his discharge for alleged

“moonlighting” affected commerce and were acts and

practices “in or affecting commerce” and constituted unfair

and deceptive trade practices, which are proscribed by

Chapter 75-1.1 of the North Carolina General Statutes (Jt.

App., pp. 232-233).

The North Carolina Supreme Court in, Sara Lee

Corp. v. Carter, 351 N.C. 27, 519 S.E.2d 308 (1999), held

that the employment relationship does not preclude the

applicability of N.C.G.S. § 75-1.1 et seg. As Justice Orr

stated, the defendant’s “mere employee status at the time

he committed these acts does not safeguard him from

liability under the Act.” Jd. at 34. The North Carolina

Supreme Court found that the relevant inquiry was

whether or not the business activities and occurrences at

issue were “in or affecting commerce.” Jd. at 32.

Contrary to the findings of the Fourth Circuit

(Opinion, pp. 12-13), Mr. Freeman alleged that the acts of

Thaxton and Kwascha affected commerce, i.e., the

business activity of moonlighting, and not just his

employment relationship (Jt. App., p. 233, paragraph 24).

The acts of Thaxton and Kwascha had an impact beyond

the employment relationship, affected the consuming

public, and had the effect of chilling the practice of

moonlighting.

The Petitioner-Appellant’s claim for unfair trade

practices stated a claim under North Carolina law which

the Fourth Circuit overlooked in affirming the order of the

district court dismissing Mr. Freeman’s claim for unfair

and deceptive trade practices.

unfairly singled him out due to his success and sought a pretext to

wrongfully discharge him for the business activity of

“moonlighting” (Jt. App., p. 154).

24

CONCLUSION

For the reasons set forth above, the petition for a

writ of certiorari should be granted and the judgment

below reversed.

Respectfully submitted,

Fred T. Hamlet

300 North Greene Street

Wachovia Tower, Suite 2175

Greensboro, NC 27401

(336) 378-9751

Counsel for Petitioner

Dated January 24, 2005