Opposition Brief — Freeman v. Duke Power Co.

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} Supreme Court, U.S

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/ FEB 282005 |

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No. 04-1011 | OFFICE OF THE CLERK

In The

Supreme Court of the Anited States

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ALBERT L. FREEMAN,

Petitioner,

2

DUKE POWER COMPANY, et al.,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fourtb Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

D. BETH LANGLEY

Counsel of Record

BRIAN S. CLARKE

NEXSEN PRUET ADAMS KLEEMEIER, PLLC

701 Green Valley Road, Suite 100

Greensboro, North Carolina 27408

(336) 373-1500

Counsel for Respondents

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

Did the Fourth Circuit conclude correctly, based

on well-established precedent, that a settlement

agreement entered as a result of a grievance

brought by a union pursuant to the terms of a col-

lective bargaining agreement is a labor “contract”

within the meaning of Section 301 of the Labor

Management Relations Act, 29 U.S.C. § 185(a)

(hereinafter “LMRA Section 301”)?

Did the Fourth Circuit conclude correctly, based

on well-established precedent, that Petitioner Al-

bert L. Freeman’s claims for breach of contract,

wrongful discharge and tortious interference with

contract were completely preempted by LMRA

Section 301?

Did the Fourth Circuit conclude correctly, based

on well-established precedent, that Petitioner Al-

bert L. Freeman’s claims for breach of contract

and wrongful discharge were barred by the six-

month statute of limitations for “hybrid” LMRA

Section 301 claims pursuant to DelCostello v. Int'l

Bhd. of Teamsters, 462 U.S. 151, 158, 103 S.Ct.

2281, 2287 (1983)?

Did the Fourth Circuit conclude correctly, based

on well-established precedent, that Petitioner Al-

bert L. Freeman’s claim for tortious interference

with contract failed to state a claim upon which

relief could be granted under LMRA Section 301?

Did the Fourth Circuit conclude correctly, based

on well-established precedent, that Petitioner Al-

bert L. Freeman’s claim for unfair and deceptive

trade practices failed to state a claim upon which

relief could be granted under North Carolina law?

CORPORATE DISCLOSURE STATEMENT

Respondent “Duke Power Company” is an operating

unit of respondent Duke Energy Corporation, is not a

separate corporate entity and has no stock. Accordingly, no

publicly-held company owns 10% or more of its stock.

Respondent Duke Energy Corporation is a publicly-

held company. Duke Energy Corporation has no parent

company and no publicly-held company owns 10% or more

of its stock.

Respondents Cindy Thaxton and George Kwascha are

individuals.

iil

TABLE OF CONTENTS

Page

QUBSTIONS PRESENTED o000ccccseccscscssrescesscossesssessosess i

CORPORATE DISCLOSURE STATEMENT............... ii

BE PRE hE RID cs scnctasincrnecvecsccccastsncansseasase Vv

STATEMENT OF THE CASE. ..........ccccccscsscssesessosecsosees

REASONS FOR DENYING THE PETITION .............. 5

I. THE DECISION OF THE FOURTH CIRCUIT

DOES NOT CONFLICT WITH ANY DECI-

ESP HEROD GAPRIIEE csinissssnsicciscscatscecssscencsees 5

A. The Decision Of The Fourth Circuit Does

Not Conflict With This Court’s Decision In

INC IIE ccaitadiiauiphanvicesdavdasneneenninacesenns 6

B. The Decision Of The Fourth Circuit Does

Not Conflict With This Court’s Decision In

ee iddeaaanens 8

C. The Decision Of The Fourth Circuit Does

Not Conflict With This Court’s Decision In

PERRIER, TID. Sssscciincesnsnsatvencsesusecsens 9

II. THERE IS NO CIRCUIT SPLIT ON THE

QUESTIONS PRESENTED..................cccceeeeeeees 10

III. THIS CASE DOES NOT PRESENT ANY

QUESTION OF EXCEPTIONAL IMPOR-

TANCE TO LABOR LAW JURISPRUDENCE

WHICH SHOULD BE DECIDED BY THIS

IIT Si Nn oi ssa cinnenndpibintininnciiincimnnnnhiasnnienesssees 12

IV. THERE IS NO INTERNAL CONFLICT WITH

THE CASE LAW OF THE FOURTH CIRCUIT

ON THE QUESTIONS PRESENTED .............. 14

iv

TABLE OF CONTENTS - Continued

Page

V. THERE IS NO COMPELLING REASON FOR

THIS COURT TO INVOKE ITS DISCRE-

TIONARY AUTHORITY TO REVIEW THE

FOURTH CIRCUIT'S DECISION..................... 16

Ce I siicinterktcatidapiiatnencincaniintnaaapitninctadinusionn 17

TABLE OF AUTHORITIES

Page

CASES

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105

CR. BODE CR vscesnncccttnitsienicinnteenecaneaeeions passim

Amalgamated Meat Cutters and Butcher Workmen

of N. Am., Local 195, AFL-CIO v. M. Feder & Co.,

234 F. Susp. G64 CBD. Pin. RGD occcccccccascsccnrcsnsexsosisaness 11

Avco Corp. v. Aero Lodge No. 735, Int'l Ass’n Of

Machinists & Aerospace Workers, 390 U.S. 557,

GO Bk. DORE CID vasenacntdcniiaeanemeumaes 13

Bakers Union Factory No. 326 v. ITT Cont'l Baking

Co., Inc., 749 F.2d 350 (6th Cir. 1984).....................0000 11

Bowen v. United States Postal Service, 459 US.

312, 3038. B.Cé. BRS CD iene tioiicceneoinnn 8

Caterpillar, Inc. v. Williams, 482 U.S. 386, 107

Ge. BOE Ci iviicctkkcrts inka etitenene 6, 7, 8, 12

Coca-Cola Bottling Co. of St. Louis v. Teamsters

Local Union No. 688, 959 F.2d 1438 (8th Cir.

VOID issiisicnsishcunstishichiadeasbavcmasadieatia stamina nama uamacaaaaat: 11

Cotter v. DaimlerChrysler Corp., 87 F. Supp. 2d 746

CO EW, Pe, TE aesicchenecisicckdtcnskansnsnsnicensansessacetacadarnandaas 12

Davis v. Bell Atlantic-West Virginia, Inc., 110 F.3d

245 (4th Cir. 1997)............. Aabeaaauic ecceachieaie nied a Y, 22

DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151,

ROD. B.C. SI CA esiinsntstcinecinsndsrancintieruesrcnene passim

Duerr v. 3M, 101 F. Supp. 2d 1057 (N.D. Ill. 2000).......... 11

Franchise Tax Bd. v. Constr. Laborers Vacation

Trust, 463 U.S. 1, 103 S.Ct. 2841 (1983)... ee 12

Hillard v. Dobelman, 774 F.2d 886 (8th Cir. 1985).... 13, 15

TABLE OF AUTHORITIES - Continued

Page

International Union of Operating Eng’rs v. Cooper

Natural, 163 F.3d 916 (5th Cir.), cert. denied, 528

U2. GRR, FO BA: Ge Ce brscsehcsincastnndgesitaictionscaens 11

International Union, United Mine Workers of Am. v.

Covenant Coal Corp., 977 F.2d 895 (4th Cir.

RIED ccnnccoccdcnpasusasucnnunsakieainensniialamnnnmananaanaecan ial passim

Jackson v. Kimel, 922 F.2d 1318 (4th Cir. 1993)........ 14, 15

Jones v. General Motors Corp., 939 F.2d 380 (6th

Cher, BE) naececcssssescaseiecenscenisubaacepasenaiamuaniaicanainasaiaas 11

Kimbro v. Pepsico, Inc., 215 F.3d 723 (7th Cir. 2000).... 13, 15

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

S308, 100 GGL. BBFe Ci Riieiindcdeneoanandnau 12

Shiflett v. I.T.O. Corp., No. 99-1379, 2000 U.S. App.

LEXIS 263 (4th Cir. Jan. 20, 2000)..........ccccccccceceeseeeeees 15

Steinbach v. Dillon Cos., 253 F.3d 538 (10th Cir.

Tootsie Roll Indus., Inc. v. Local Union No. 1,

Bakery, Confectionary and Tobacco Workers’ Int'l

Union, 832 F.2d 81 (7th Cir. 1987) ..................cseccceeeees 11

United Mine Workers of Am. v. Barnes & Tucker

Co., 561 F.2d 1008 (Srd Cir. 1977) .......cccccsscsccccccccosseseee 11

United States Dep’t of the Air Force v. Fed. Labor

Relations Auth., 949 F.2d 475 (D.C. Cir. 1991) ............ 11

Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903 (1967)........00.. 10

STATUTES

BD UE: © i isscisincistscrncibienentntdaciantniomiiunnnal passim

SD UG. F Beetisisisvicistsscateantivcomimenceeuaa 4, 8, 16

ee ee

1

STATEMENT OF THE CASE

From 1983 until July of 1999, petitioner Albert L.

Freeman (“Freeman”) was employed by respondents Duke

Power Company and Duke Energy Corporation (collec-

tively “Duke”) as a “lineman” in Burlington, North Caro-

lina. See Petition Appendix (“Petition Appx.”) B at p. 2b.

Freeman was a member of Local Union 962, International

Brotherhood of Electrical Workers (hereafter the “Union”),

which had, at all relevant times, various collective bar-

gaining agreements with Duke (collectively the “CBA”). Id.

On or around January 26, 1994, Freeman was sus-

pended and then discharged from his employment as a

lineman for removing a service drop and meter and dis-

connecting service to a customer without authorization

from Duke, while moonlighting as an electrical contractor.

Id. at p. 3b. The Union filed a grievance on behalf of

Freeman under the “Grievances” provision of the then

existing CBA. Jd. Prior to the referral of this grievance to

arbitration as provided by the CBA, Duke and the Union

settled the grievance and Duke, the Union, and Freeman

entered into an agreement entitled “Grievance Resolu-

tion.” Jd. Pursuant to the “Grievance Resolution,” Duke,

the Union, and Freeman agreed, inter alia, that Duke

would reinstate Freeman with no loss of service under the

CBA, but with no back pay; the Union agreed to withdraw

the grievance; and Freeman agreed not to engage, directly

or indirectly, in the business of electrical contracting while—

employed with Duke. Jd. The Grievance Resolution pro-

vided that Duke could discharge Freeman if he engaged in

electrical contracting and that the discharge decision

would be final and would not be subject to the grievance

procedures of the CBA in effect at the time of any future

discharge. Id.

In June 1996, Duke Power suspended and proposed to

discharge Freeman a second time, asserting that Freeman

violated the Grievance Resolution by engaging in electrical

contracting. Jd. Freeman asserted that he did not violate

the Grievance Resolution. Jd. In settling the dispute, the

Union, Duke, and Freeman entered into an Amendment to

the Grievance Resolution (the “Amendment”) on or about

July 3, 1996. Id. The Amendment prohibited Freeman

from being or beeoming employed on a full- or part-time

basis with any entity engaged in the business of electrical

contracting. Jd. In the Amendment, Duke agreed not to

terminate Freeman for the then current violation of the

Grievance Resolution, and Freeman agreed not to engage

in the business of electrical contracting in the future. Id.

The Amendment provided that Duke could terminate

Freeman’s employment if he violated the Amendment and

that such termination would be final and would not be

subject to the arbitration or grievance procedures under

the CBA. Id.

In July of 1999, Duke suspended Freeman and then

terminated Freeman’s employment for breaching the

terms of the Grievance Resolution and the Amendment by

engaging in the business of electrical contracting. Jd. The

Union did not file a grievance pursuant to the CBA on

behalf of Freeman regarding his July 1999 termination.

Id. at p. 4b.

On or about June 30, 2000, Freeman filed a complaint

against Duke in the General Court of Justice, Alamance

County, North Carolina asserting state law claims for

breach of employment contract, wrongful discharge, bad

faith discharge and violation of the North Carolina Consti-

tution. Jd. Duke removed the action to federal court on the

ground that Freeman’s state law claims were completely

_—

3

preempted by LMRA Section 301, 29 U.S.C. § 185(a). Duke

moved to dismiss Freeman’s claims; Freeman moved to

remand. Id.

On or about June 28, 2002, Freeman filed a separate

action in the General Court of Justice, Alamance County,

North Carolina, against respondents Cindy Thaxton

(“Thaxton”) and George Kwascha (“Kwascha”), two man-

agement employees at Duke. Id. This action asserted

claims for tortious interference with contract and unfair

and deceptive trade practices. Jd. Thaxton and Kwascha

removed this action to federal court based on complete

preemption by LMRA Section 301 and moved to dismiss.

Freeman moved to remand. Id.

The District Court granted both motions to dismiss

and denied Freeman’s motions to remand. See Petition

Appx. A. Freeman appealed to the United States Court of

Appeals for the Fourth Circuit.

On September 27, 2004, the Fourth Circuit, by unpub-

lished per curiam opinion, affirmed the District Court in

all respects. See Freeman v. Duke Power Co., 114 Fed.

Appx. 526 (4th Cir. 2004) (per curiam) (unpublished);

Petition Appx. B. As a preliminary matter, the Fourth

Circuit concluded that, based on established precedent,

the Grievance Resolution and the Amendment were labor

“contracts” within the meaning of LMRA Section 301

because they “derive[d] their ‘entire vitality and legiti-

macy’ from the CBA.” Freeman, 114 Fed. Appx. at 531-32

(quoting Davis v. Bell Atlantic-West Virginia, Inc., 110 F.3d

245, 248 (4th Cir. 1997)); Petition Appx. B at pp. 6b-7b.

The Fourth Circuit concluded further that Freeman's

breach of contract and wrongful discharge claims against

Duke and his tortious interference claim against Thaxton

and Kwascha were completely preempted by LMRA

4

Section 301. Freeman, 114 Fed. Appx. at 532-33; Petition

Appx. B at pp. 8b-9b. Accordingly, the Fourth Circuit held

that the District Court properly exercised subject matter

jurisdiction over both actions and affirmed the District

Court’s denial of the motions to remand. Id.

The Fourth Circuit treated the breach of contract and

the wrongful discharge claims against Duke as LMRA

Section 301 claims. Freeman, 114 Fed. Appx. at 533 (citing

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220, 105 S.Ct.

1904, 1915 (1985)); Petition Appx. B at p. 10b. The Fourth

Circuit then considered whether these claims were timely

under LMRA Section 301. Jd. As directed by this Court in

DelCostello v. Int'l Bhd. of Teamsters, 462 U.S. 151, 158,

103 S.Ct. 2281, 2287 (1983), the Fourth Circuit applied the

six-month statute of limitations found in Section 10(b) of

the National Labor Relations Act (the “NLRA”), 29 U.S.C.

§ 160(b), and held that these claims against Duke were

time barred. Freeman, 114 Fed. Appx. at 533-34 (citing

DelCostello, 462 U.S. at 158, 103 S.Ct. at 2287); Petition

Appx. B at pp. 10b-11b. It further held that Freeman’s

claims against Duke for “bad faith discharge” and for

violation of the North Carolina Constitution failed to state |

claims under North Carolina law.’ Freeman, 114 Fed.

Appx. at 534-35; Petition Appx. B at pp. 11b-12b.

As to the claims against Thaxton and Kwascha, the

Fourth Circuit concluded that the tortious interference :

with contract claim did not state a claim upon which relief

could be granted under LMRA Section 301. Freeman, 114

* Freeman does not mention either the “bad faith discharge” claim

or the claim for alleged violation of the North Carolina Constitution in

his Petition and does not assert that the Fourth Circuit erred in

affirming the dismissal of these claims.

TR een Aa —_

SL RE Nm NT mr ere

5

Fed. Appx. at 535 (following International Union, United

Mine Workers of Am. v. Covenant Coal Corp., 977 F.2d 895,

897 (4th Cir. 1992)); Petition Appx. B at pp. 12b-13b.

Finally, the Fourth Circuit concluded that Freeman’s claim

for unfair and deceptive trade practices against Thaxton

and Kwascha did not state a valid claim under North

Carolina law. Freeman, 114 Fed. Appx. at 535; Petition

Appx. B at pp. 13b-14b.

The Fourth Circuit, in reliance on well-established

precedent from this Court, the Fourth Circuit and other

federal Courts of Appeals, affirmed the decision of the

District Court in all respects. The Fourth Circuit subse-

quently denied Freeman’s petitions for rehearing and for

rehearing en banc. See Petition Appx. C.

&

Vv

REASONS FOR DENYING THE PETITION

The decision of the Fourth Circuit does not conflict

with a decision of this Court or any federal Court of

Appeals. In rendering its decision in this case, the Fourth

Circuit relied upon and applied clear, well-established and

unquestioned Fourth Circuit precedent as well as well-

established precedent from this Court and from other

federal Courts of Appeals. In short, there is no compelling

reason for this Court to review the Fourth Circuit’s deci-

sion.

I. THE DECISION OF THE FOURTH CIRCUIT

DOES NOT CONFLICT WITH ANY DECISION

OF THIS COURT.

The decision of the Fourth Circuit does not conflict

with any decision of this Court. There are three decisions

6

of this Court that are explicitly or implicitly implicated in

Freeman’s Petition: Caterpillar, Inc. v. Williams, 482 U.S.

386, 107 S.Ct. 2425 (1987); DelCostello v. Int'l Bhd. of

Teamsters, 462 U.S. 151, 103 S.Ct. 2281 (1983); and Allis-

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

(1985). As discvssed in detail below, the Fourth Circuit’s

decision in this case does not conflict in any way with any

of these decisions. fs

A. The Decision Of The Fourth Circuit Does

Not Conflict With This Court’s Decision In

Caterpillar, Inc.

Freeman specifically asserts that the Fourth Circuit’s

decision conflicts with this Court’s decision in Caterpillar,

Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425 (1987). See

Petition pp. 13-15. However, Freeman does not discuss or

analyze the facts or holding of Caterpillar, Inc. or set forth

any argument regarding the alleged conflict. Rather, the

Petition states simply that claims based on an “independ-

ent” agreement are not preempted by LMRA Section 301.

In Caterpillar, Inc., the plaintiffs alleged that while

they were management employees and, therefore, not

unicn members or subject to any collective bargaining

agreement, Caterpillar entered into individual employ-

ment agreements with them. See Caterpillar, Inc., 482

U.S. at 388-89, 107 S.Ct. at 2427-28. After they were

demoted to positions within the bargaining unit and then

laid off, the plaintiffs brought suit in California state court

for breach of their individual employment agreements. Jd.

at 390, 107 S.Ct. at 2428. Caterpillar removed the action

to federal court asserting complete preemption by LMRA

Section 301. Jd. This Court held that a claim for breach of

an individual employment agreement, which was brought

at.

— =

7

by an employee who was not subject to any collective

bargaining agreement at the time the individual agree-

ment was executed, and the resolution of which was not

substantially dependent on analysis of a collective bar-

gaining agreement, was not preempted by LMRA Section

301. Id. at 394-98, 107 S.Ct. at 2430-33.

In the instant case, unlike the situation in Caterpillar,

Inc., Freeman was, at all times, a member of the Union

and subject to the CBA between the Union and Duke. The

Grievance Resolution and Amendment were entered into

by Duke, Freeman and the Union to resolve a grievance

brought by the Union on Freeman’s behalf pursuant to the

CBA. As distinguished from Caterpillar, Inc., the Griev-

ance Resolution and Amendment derive their very exis-

tence from the CBA.

In its decision, the Fourth Circuit squarely addressed

this issue and distinguished Caterpillar, Inc. as follows:

Although disputes arising over independent em-

ployment contracts unrelated to a CBA are not

preempted by § 301 of the LMRA, see Caterpillar

Inc. v. Williams, 482 U.S. 386, 394-95, 107 S.Ct.

2425, 2430-31, 96 L.Ed. 2d, 2430-31 (1987), the

Grievance Resolution and the Amendment are

not independent of the CBA. 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. 7d. at 395 & n. 9,

107 S.Ct. at 2425. The same cannot be said in the

instant case, as the Grievance Resolution and

Amendment derive their “entire vitality and le-

gitimacy” from the CBA. Davis, 110 F.3d at 248.

8

Freeman, 114 Fed. Appx. at 531-532; Petition Appx. B at p.

7b. Freeman offers no argument on how the Fourth Circuit

allegedly erred when it discussed and distinguished

Caterpillar, Inc. This Court’s decision in Caterpillar, Inc. is

distinguishable and the Fourth Circuit’s decision does not

conflict with Caterpillar, Inc. in any way.

—

B. The Decision Of The Fourth Circuit Does

Not Conflict With This Court’s Decision In

DelCostello.

Freeman’s Petition could be construed to suggest that

the Fourth Circuit’s decision conflicts with this Court’s

opinion in DelCostello due to application of the six-month

statute of limitations. See Petition p. 15. It is well estab-

lished that; where a union has agreed to waive its right to

grieve or otherwise challenge a discharge under a labor

contract, the waiver acts as a final resolution of the

matter. See Bowen v. United States Postal Service, 459

U.S. 212, 226, 103 S.Ct. 588, 596 (1983). This Court,

however, has “recognized that this rule works an unac-

ceptable injustice when the union representing the em-

ployee in the grievance/arbitration procedure

breach[es] its duty, of fair representation.” DelCostello, 462

U.S. at 164, 103 S.Ct. at 2290 (citations omitted). As a

result, this Court recognized “hybrid” LMRA Section 301

claims wherein “an employee may bring suit against both

the employer and the union, notwithstanding the outcome

or finality of the grievance or arbitration proceeding.” Id.

at 165, 103 S.Ct. at 2291. Such “hybrid” LMRA Section 301

claims borrow the six-month statute of limitations found

in Section 10(b) of the NLRA, 29 U.S.C. § 160(b). Id. at

171, 103 S.Ct. at 2294.

9

The Fourth Circuit determined correctly that, due to

the waiver of the grievance provisions of the CBA in the

Grievance Resolution and Amendment, any LMRA Section

301 claim was governed by the six-month statute of

limitations for hybrid LMRA Section 301 claims. Freeman,

114 Fed. Appx. at 533-34 (citing DelCostello, 462 U.S. at

171, 103 S.Ct. at 2294); ‘Petition Appx. B at pp. 10b-11b.

The Fourth Circuit’s application of DelCostello in this case

was correct and not in conflict with any decision of this

Court.

C. The Decision Of The Fourth Circuit Does

Not Conflict With This Court’s Decision In

Allis-Chalmers, Corp.

Freeman asserts that the Fourth Circuit’s decision

below was inconsistent with this Court’s decision in Allis-

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

1904, 1911 (1985). See Petition p. 15. Freeman argues

that, because the Grievance Resolution and Amendment

waived his access to the grievance provisions of the CBA,

those agreements should not be considered labor contracts

within the meaning of LMRA Section 301. See Petition p.

15. Freeman suggests that Allis-Chalmers Corp. stands for

the proposition that in order to be a labor contract, an

agreement must allow access to arbitration. See id.

Allis-Chalmers Corp. does not state or imply that an

agreement must contain an arbitration provision in order

to be a labor contract within the meaning of LMRA Section

301. To the contrary, Allis-Chalmers Corp. specifically

states that “Section 301 on its face says nothing about the

substance of what private parties may agree to in a labor

contract.” Allis-Chalmers Corp., 471 U.S. at 211-12, 105

S.Ct. at 1911-12.

10.

Contrary to Freeman’s assertion, the Union’s waiver

of the grievance provisions of the CBA in the Grievance

Resolution and Amendment does not render those agree-

ments mere state law contracts. Rather, the waiver ren-

dered Duke’s decision to terminate Freeman a “final”

decision for purposes of the CBA. See Bowen, 459 U.S. at

226, 103 S.Ct. at 596. Accordingly, Freeman’s remedy was

a hybrid LMRA Section 301 action, as discussed by this

Court in DelCostello, 462 U.S. at 165, 103 S.Ct. 2291, Vaca

v. Sipes, 386 U.S. 171, 87 S.Ct. 903 (1967), and other

cases.

The Fourth Circuit’s decision does not conflict in any

way with this Court’s decision in -Allis-Chalmers Corp. or

any other case.

II. THERE IS NO CIRCUIT SPLIT ON THE QUES-

TIONS PRESENTED.

The decision of the Fourth Circuit below does not

conflict with the decisions of any other Court of Appeals on

the issues presented.

There is no split among the Courts of Appeals regard-

ing the fact that a settlement agreement entered to resolve

a grievance initiated by a union pursuant to the terms of a

collective bargaining agreement is a labor “contract”

within the meaning of LMRA Section 301. The various

Courts of Appeals agree on this point, even though they

use slightly different labels to describe the agreements at

issue.

In its decision, the Fourth Circuit characterized the

Grievance Resolution and Amendment as labor contracts

within the meaning of LMRA Section 301 because they

Pe

i

11

“deriveld) their ‘entire vitality and legitimacy’ from the

CBA.” Freeman, 114 Fed. Appx. at 531-32 (quoting Davis,

110 F.3d at 248); Petition Appx. B at pp. 6b-7b. The Sixth

Circuit and the Third Circuit have reached similar conclu-

sions with regard to grievance settlement agreements. See

Jones v. General Motors Corp., 939 F.2d 380, 382-83 (6th -

Cir. 1991) (settlement agreement arrived at by virtue of

the grievance process established by a collective bargain-

ing agreement was a labor contract within the meaning of

Section 301 of LMRA); United Mine Workers of Am. v.

Barnes & Tucker Co., 561 F.2d 1093, 1096-98 (3rd Cir.

1977) (same); see also Duerr v. 3M, 101 F. Supp. 2d 1057,

1060-61 (N.D. Ill. 2000) (same); Amalgamated Meat

Cutters and Butcher Workmen of N. Am., Local 195, AFL-

CIO v. M. Feder & Co., 234 F. Supp. 564, 548 (E.D. Pa.

1964) (same).

Other Courts of Appeals, including the Fifth, Sixth,

Seventh, Eighth and District of Columbia Circuits, have

uniformly held that settlement agreements arising out of

grievances, which are typically characterized as “last _

chance agreements,” are labor contracts within the mean-

ing of LMRA Section 301. See Intl Union of Operating

Eng'rs v. Cooper Natural, 163 F.3d 916, 919 (5th Cir.), cert.

denied, 528 U.S. 812, 120 S.Ct. 45 (1999) (last chance

agreement is labor contract for purposes of Section 301 of

LMRA); Coca-Cola Bottling Co. of St. Louis v. Teamsters

Local Union No. 688, 959 F.2d 1438 (8th Cir. 1992) (same);

United States Dep't of the Air Force v. Fed. Labor Relations

Auth., 949 F.2d 475, 478 (D.C. Cir. 1991) (same); Tbotsie

Roll Indus., Inc. v. Local Union No. 1, Bakery, Confection-

ary and Tobacco Workers’ Int’l Union, 832 F.2d 81, 82 (7th

Cir. 1987) (same); Bakers Union Factory No. 326 v. ITT

Conti Baking Co., Inc., 749 F.2d 350, 354 (6th Cir. 1984)

12

(same); see also Cotter v. DaimlerChrysler Corp., 87

F. Supp. 2d 746, 757 (E.D. Mich. 2000) (same).

The Fourth Circuit’s decision is wholly consistent with

the vast body of well-established precedent that a settle-

ment agreement entered into to resolve a grievance

initiated by a union pursuant to the terms of a collective

bargaining agreement is a labor contract within the

meaning of LMRA Section 301. Further, there is no split

among the Courts of Appeals regarding any other question

presented in the instant action.

Il. THIS CASE DOES NOT PRESENT ANY QUES-

TION OF EXCEPTIONAL IMPORTANCE TO LA-

BOR LAW JURISPRUDENCE WHICH SHOULD

BE DECIDED BY THIS COURT.

In rendering its decision, the Fourth Circuit applied

well-established precedent from this Court, the Fourth

Circuit and the other Courts of Appeals.

As discussed in Section II, supra, it is well established

in the Fourth Circuit and the other Courts of Appeals that

agreements such as the Grievance Resolution and the

Amendment are labor contracts within the meaning of

LMRA Section 301.

The case law from this Court firmly establishes that a

state law claim for breach of a labor contract and any

other claim the resolution of which requires the interpre-

tation of a labor contract are completely preempted by

LMRA Section 301. See Lingle v. Norge Div. of Magic Chef,

Inc., 486 U.S. 399, 108 S.Ct. 1877 (1988); Allis-Chalmers

Corp., 471 U.S. at 220, 105 S.Ct. at 1915; Caterpillar, Inc.,

482 U.S. at 393, 107 S.Ct. at 2430; Franchise Tax Bd. v.

13

Constr. Laborers Vacation Trust, 463 U.S. 1, 24, 103 S.Ct.

2841, 2854 (1983); Avco Corp. v. Aero Lodge No. 735, Int'l

Ass'n Of Machinists & Aerospace Workers, 390 U.S. 557, 88

S.Ct. 1235 (1968). Further, it is firmly established that

state law claims that are completely preempted by LMRA

Section 301 “must either be treated as a § 301 claim... or

dismissed as preempted by federal labor-contract law.”

Allis-Chalmers Corp., 471 U.S. at 220, 105 S.Ct. at 1915.

It is well-established precedent in this Court that,

where a decision is “final” under a labor contract, either by

operation of the grievance procedure or by waiver, a

plaintiff may only pursue a “hybrid” LMRA Section 301

claim. See DelCostello, 462 U.S. at 165, 103 S.Ct. at 2291;

Vaca, 386 U.S. 171, 87 S.Ct. 903. Further, it is beyond

question that “hybrid” LMRA Section 301 claims are

subject to the six-month statute of limitations found in

Section 10(b) of the NLRA, 29 U.S.C. § 160(b), and that

claims bought after the expiration of this statute of limita-

tions fail as matter of law. DelCostello, 462 U.S. at 171,

103 S.Ct. at 2294.

Fourth Circuit and other Courts of Appeals have

repeatedly held that a claim against a manager, supervisor

or other third-party for tortious interference with a labor

contract is preempted by LMRA Section 301. See Covenant

Coal Corp., 977 F.2d at 897 (claim for tortious interference

with labor contract preempted by LMRA Section 301);

Steinbach v. Dillon Cos., 253 F.3d 538, 540 (10th Cir. 2001)

(same); Kimbro v. Pepsico, Inc., 215 F.3d 723, 727 (7th Cir.

2000) (same); Hillard v. Dobelman, 774 F.2d 886, 887 (8th

Cir. 1985) (same).

Freeman specifically argues in his Petition that the

question of whether the Grievance Resolution and the

14

Amendment are “riders” to the CBA, “last chance agree-

ments” or mere state law contracts is a question of excep-

tional importance to labor law jurisprudence that should

be decided by this Court. See Petition pp. 15-16. As dis-

cussed above, however, it is firmly established in the

Courts of Appeals that a settlement agreement entered

into to resolve a grievance initiated by a union pursuant to

the terms of a collective bargaining agreement is a labor

contract within the meaning of LMRA Section 301, regard-

less of the semantics of labeling such an agreement a

“rider to the CBA” or a “last chance agreement.” See

Section II, supra. This issue is well settled in labor law

jurisprudence and need not be considered by this Court.

The case at bar presents no new issues. The issues

raised in the Petition are firmly established in labor law

jurisprudence, through the decisions of this Court and the

Courts of Appeals, and should not be disturbed. There is

simply no unsettled question of exceptional importance to

labor law jurisprudence presented in this case.

IV. THERE IS NO INTERNAL CONFLICT WITH

THE CASE LAW OF THE FOURTH CIRCUIT

ON THE QUESTIONS PRESENTED.

In finding that Freeman’s claim against Thaxton and

Kwascha for tortious interference with contract was

preempted, the Fourth Circuit applied “controlling and

unquestioned circuit precedent.” Freeman, 114 Fed. Appx.

at 535 (citing Covenant Coal Corp., 977 F.2d at 897);

Petition Appx. B at pp. 12b-13b. Nevertheless, Freeman

asserts as a basis for review by this Court that the Fourth

Circuit’s decision below conflicted with the Fourth Cir-

cuit’s previous opinion in Jackson v. Kimel, 922 F.2d 1318

(4th Cir. 1993). See Petition pp. 16-19.

~ mene + ee —

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15

The Fourth Circuit’s decision in Jackson is distin-

guishable and inapplicable in this case. The issue in

Jackson was whether a state law claim for intentional

infliction of emotional distress against a former supervisor

was preempted by LMRA Section 301. The Fourth Circuit

held that such a claim was not preempted because the

supervisor's conduct “if it occurred as alleged, [was]

wrongful regardless of whether it was authorized by the

collective bargaining agreement.” Jackson, 992 F2d at

1326. Interpretation of the relevant labor contract was not

necessary to establish any element of the plaintiff’s claizn.

Unlike Jackson, the claim at issue in this case was a

purported state law claim for tortious interference with

various labor contracts, including the CBA, the Grievance

Resolution and the Amendment. The Fourth Circuit

explicitly held in Covenant Coal Corp., 977 F.2d at 897,

that a state law claim for tortious interference with

contract is preempted by LMRA Section 301 where the

contract at issue was a labor contract. See also Steinbach,

253 F.3d at 540 (claim for tortious interference with labor

contract preempted by LMRA Section 301); Kimbro, 215

F.3d at 727(same); Hillard, 774 F.2d at 887 (same).

In his Petition, Freeman quotes extensively from the

concurring opinion in Jackson in support of his position.

See Petition pp. 17-19 (quoting Jackson, 992 F.2d at 1327-

28 (Phillips, J., concurring)). However, the Fourth Circuit

has specifically rejected the reasoning of this concurrence

in Jackson as inconsistent with its prior decision in Cove-

nant Coal Corp. See Shiflett v. I.T-0. Corp., No. 99-1379,

2000 U.S. App. LEXIS 263 (4th Cir. Jan. 20, 2000).

Based on its decision in Covenant Coal Corp., the

Fourth Circuit determined that it was “bound ... by prior

16

controlling and unquestioned circuit precedent” and,

therefore, held that Freeman’s claim for tortious interfer-

ence with contract was preempted and should be dis-

missed. Freeman, 114 Fed. Appx. at 535 (citing Covenant

Coal Corp., 977 F.2d at 897); Petition Appx. B at pp. 12b-

13b. This decision was not in conflict with Jackson or any

other decision by the Fourth Circuit.

V. THERE IS NO COMPELLING REASON FOR

THIS COURT TO INVOKE ITS DISCRETION-

ARY AUTHORITY TO REVIEW THE FOURTH

CIRCUIT’S DECISION.

In his Petition, Freeman argues that he will be left

without a remedy if the Fourth Circuit’s decision is not

reviewed and reversed by this Court and, therefore, this

Court should grant certiorari to correct this “unjust and

harsh” result. (Petition pp. 15, 19-21). Freeman had

remedies available to him but he did not pursue them.

For example, Freeman could have asserted a hybrid

LMRA Section 301 claim against Duke and the Union at

any time prior to the expiration of the six-month statute of

limitations in January of 2000; however, he did not do so.

Likewise, Freeman could have filed an unfair labor prac-

tice charge with the National Labor Relations Board

regarding any alleged conduct by Thaxton and Kwascha;

however, he did not do so.’ See Covenant Coal Corp., 977

F.2d at 899-900 (noting availability of unfair labor practice

* Both a hybrid LMRA Section 301 action and an unfair labor

practice charge are subject to the six-month statute of limitations

contained in 29 U.S.C. § 160(b). See DelCostello, 462 U.S. at 171, 103

S.Ct. at 2294.

17

charge to redress alleged interference with labor contract

by third-party who was not a signatory of the labor con-

tract). Freeman’s failure to pursue the remedies available

to him is not a compelling reason for this Court to invoke

its discretionary authority to review the Fourth Circuit’s

decision. 7

Further, the Fourth Circuit correctly applied North

Carolina law in concluding that Freeman’s claim for unfair

and deceptive trade practices failed to state a claim upon

which relief could be granted. Any alleged error in the

application of North Carolina law in this case fails to

provide a compelling reason for this Court to invoke its

discretionary authority to review the Fourth Circuit’s

decision.

¢

CONCLUSION

For the foregoing reasons, Respondents respectfully

request that the Court deny the Petition for Writ of Certio-

rari.

Respectfully submitted, this the 28th day of February,

2005. |

D. BETH LANGLEY

Counsel of Record

BRIAN S. CLARKE

NEXSEN PRUET ADAMS KLEEMEIER, PLLC

701 Green Valley Road, Suite 100

Greensboro, North Carolina 27408

(336) 373-1600

Counsel for Respondents