Petition for Writ of Certiorari — Beals v. Kiewit Pacific Co.

f \ Sapreme Court, U.S.

\ y, FILED

97 782 OCT 1 41997

No. OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1997

BRENT BEALS,

Petitioner,

V.

KIEWIT PACIFIC COMPANY, INC.,

Respondent .

Petition For Writ Of Certiorari

To The United States Court of Appeals

For The Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

LUNSFORD DOLE PHILLIPS

900 Fort Street Mall, #1620

Honolulu, HI 96813

Ph. No. 808-533-1734

rn \

PUBLISHER'S NOTE :

ORIGINAL PAGINATION IS NOT CONTINUOUS.

QUESTION PRESENTED

Does federal law preempt state

law when an independent employment contract

is breached if the employee's job is covered

by a collective bargaining agreement?

The Ninth Circuit Court of

Appeals held that such a state law contract

claim was preempted by federal law. The

Thixd and Eighth Circuit Courts of Appeals

disagree, having upheld similar state law

claims against efforts to preempt them.

TABLE OF CONTENTS

PAGE

QUESTION PRESENTED. ..........2-eeee0: iv

CRSUEEED BEA. ow cc cccccccsecceseenes 1

POEs 6 ceccececesnteenctens ees 2

STATUTES INVOLVED IN THIS CASE....... 3

STATEMENT GP: THE CAGE... wc ccc cccccces 4

REASONS FOR GRANTING THE WRIT........ 10

The Petition Should Be Granted Because

The Ninth Court Has Created Conflict

Among The Circuits In An Area Where

National Uniformity Is Important By

Extending Federal Labor Law Preemption

To A Cause Of Action Properly Left To

State Law

ID. ; sc 0g 460 ewe eunen ka wee 23

6s 066 eee eb bbe kee eee A-1

iii

TABLE O AUTHORITIES

I. TABLE OF AUTHORITIES

Allis - Chalmers v. Lueck, 471

kc, 8 en es beb ee 6 eee ees 20

Anderson v. Ford Motor Co., 803

Pum ees (Oth Car. 1906) ....000- 17,18,19,20

Bale v. General Telephone Co. of

California, 795 F.2d 775

i rs wc week secccesiivesseoss 18

Belknap, Inc. v. Hale, 463

gw od sik een ob 6-0 606s 22

Berda v. CBS, Inc., 881 F.2d 20

(3rd Cir. 1989), cert. denied 493

U.S. 1062, on remand 800 F. Supp...

Rees STO Spee 2aeO. cies ces 42, 14,15,16,17

Caterpillar, Inc. v. Williams, 482

ee eT EE PINs oad Waica'e's o ae se Ua 0s wd passim

Darden v. U.S. Steel Corp., 830 F.2d

Re MU MEMS PFs icv ccc scccecceviees 21

ii

Eitmann v. New Orleans Pub. Serv,

Inc., 730 F.2€ 359 (Sth Cir. 1984)... 21,22

J.I. Case Co. v. NLRB, 321

i Met > ae! 7} ee are eee ee 15 ,16,a7

Olguin v. Inspiration Consolidated

Cooper Co., 740 F.2d 1468

(OE Ci BOE oo cc ck CREA 6s Shee SECO ws 12,16

Stallcop v. Kaiser Foundation

Hospital, 820 F.2d 1044

£0 Be ie. os | errs far mr ee 12

Teamsters v. Lucas Flour Co.,

Pee Sic hc ee ee inieiece cise este eee ees 11

Ulrich v. Goodyear Tire & Rubber Co.,

S864 F.28 936: 40GR Cad. TOES) iii see 21

White v. National Steel Corp., 938

Paes Ce. Ce ek Be 0 00 6 8 ee oes ss 21,22

Young v. Anthony’s Fish Grottos, Inc.,

S30 F.2G Oise Cee Cae. Bees ove tec cccees 12

PETITION FOR WRIT OF CERTIORARI

Petitioner Beals respectfully

requests that a Writ of Certiorari issue to

review the published opinion of the United

States Court of Appeals for the Ninth

Circuit filed on June 4, 1997, to resolve

the direct conflict between the Ninth

Circuit and the Third and Eighth Circuits on

the scope of federal labor law preemption of

state law claims.

OPINIONS BELOW

The opinion of the United States

Court of Appeals for the Ninth Circuit that

gives rise to this petition is a published

opinion of the Ninth Circuit Court of

Appeals filed on June 4, 1997. The opinion

is set forth in the Appendix beginning at A-

:

Petitioner timely filed a

Petition For Rehearing With Suggestion of En

Banc Consideration which was denied by an

1

unpublished order of the Ninth Circuit Court

of Appeals filed on July 17, 1997. The

order is set forth in the Appendix at A-10.

JURISDICTION

On August 4, 1995, the United

States District Court for the District of

Hawaii entered an Amended Judgment In A

Civil Case in favor of the plaintiff, Mr.

Beals. A-11l.

Mr. Beals filed a timely appeal,

and Kiewit filed a timely cross-appeal in

the Ninth Circuit Court of Appeals.

The Ninth Circuit filed its

opinion on the appeal and cross-appeal on

June 4, 1997. Mr. Beals timely filed a

petition for rehearing with suggestion for

rehearing en banc. The Ninth Circuit Court

of Appeals denied the petition for rehearing

and rejected the suggestion for rehearing en

banc by an order filed on July 17, 1997. A-

10. Pursuant to Supreme Court Rule 13.1 this

petition has been filed within ninety (90)

days of the denial of rehearing.

The jurisdiction of the Court is

invoked pursuant to 28 U.S.C. §1254(1).

STATUTES INVOLVED IN THIS CASE

29 U.S.C. §185(a), §301(a) of the

Labor-Management Relations Act of 1947,

provides:

Suits for violations 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 of the

amount in controversy or without regard

to the citizenship of the parties.

STATEMENT OF THE CASE

Petitioner Beals adopts the Ninth

Circuit Court of Appeal’s summary of facts

as set forth in its decision and quoted

below with petitioner's additions set forth

in bold print:

Brent Beals sued his former

employer, Kiewit Pacific Company (“Kiewit”’],

and won a jury verdict on his state law

Claims for breach of contract and negligent

misrepresentation. [The Ninth Circuit]

affirm[ed] on the negligent

misrepresentation Claim but reverse[d] on

the breach of contract claim on the ground

that the contract claim was preempted.

Brent Beals was working full-time

as a concrete pump operator for Merli

Concrete Company in Southern California when

Stuart Stephens of Kiewit Pacific Company

~.

A Ee te ER Bt

offered him a job as a concrete pumper on

Kiewit’s Honolulu airport project. Stephens

informed Beals that the airport project

would entail an “enormous” amount of

overtime and that it would last at least two

years. Stephens then faxed Beals a “move

letter” that described Beals’ position as a

forklift/pump operator, agreed to employ

Beals for the duration of the project, and

promised to pay Beals a weekly subsistence

allowance and moving expenses in addition to

his hourly wage. The move letter stated

that similar terms were offered only to a

few select individuals and requested that

Beals keep the terms confidential. Beals

Signed the move letter on February 13, 1991.

He moved to Honolulu and began work on

the project on February 21, 1991.

At the time that Beals signed the

move letter, Kiewit already had a collective

bargaining agreement (CBA) with Operating

Engineers Local Union No. 3 (“Local 3”) that

covered the position of forklift/pump

operator. The CBA excluded from its

coverage managers, supervisors,

estimators, office personnel,

“confidential employees” and certain .

other types of specifically identified

employees. The CBA permitted Kiewit to

discharge employees for reduction in force

and “just cause”. The CBA also provided an

hourly wage schedule that was lower than the

hourly wage promised in Beals’ move letter

and would pay no subsistence or moving

expenses to Beals. Eight days after

Beals had begun working on the

project, Stephens took him to the

union office to affiliate with Local

Be Beals only then learned that the

CBA provided less favorable terms than

his move letter. Kiewit, however,

assured Beals that it would adhere to the

terms of the move letter regardless of the

CBA, and Kiewit continued to pay Beals his

wages and subsistence according to the terms

of the move letter.

After five weeks at Kiewit, Beals

was assigned to a steel worker’s job instead

of a forklift/pump operator position. The

steel worker’s job was not covered by

the Local 3 CBA. Beals was terminated on

July 26, 1991, five months after he had been

hired. In terminating Beals, Kiewit

complied with the requirements of the CBA.

Beals filed suit against Kiewit

alleging breach of contract, fraudulent and

negligent misrepresentation, tortious breach

of contract, and two violations of the

California Labor Code. The district court

twice denied Kiewit’s motions for summary

judgment on the ground that Beals’ claims

were not preempted by federal labor law. pc

03/20/92, 11/04/92 Opns. The district court

reasoned that Beals’ claims fell outside the

CBA because they involved an individual

employment contract negotiated before Beals

arrived in Hawaii and before he became a

member of Local 3, and because Beals’ claims

did not substantially depend upon an

interpretation of the terms of the CBA. pc

03/20/92 On at 9-10; pe 11/04/92 On at 3-4.

The district court also granted Kiewit

summary judgment on the tortious breach of

contract claim. DC 06/28/93 on.

The jury returned a verdict for

Beals on his claims of breach of contract as

to duration of employment, and negligent

misrepresentation as to duration and nature

of employment, awarding Beals $93,019 and

$121,734, respectively. Kiewit filed a

PEN Foe

motion to amend the judgment on the ground

that it was duplicative, and the district

court granted the motion by forcing Beals to

choose one of the two awards. DC 05/17/94

On. |

Mr. Beals appealed the

Gistrict court’s order granting

summary judgment for Kiewit on the

tortious breach of contract claim and

the order granting the motion to amend

the judgment. Based principally on

preemption Kiewit cross-appealed the

two denials of its motions for summary

judgment.

REASONS FOR GRANTING THE WRIT

The Petition Should Be Granted Because

The Ninth Circuit Has Created Conflict

Among The Circuits In An Area Where

National Uniformity Is Important

By Extending Federal Labor Law

Preemption To A Cause Of Action

Properly Left To State Law

The Ninth Circuit Court Of Appeals’

Opinion in the instant case extends federal

labor law preemption to every contract

dispute between an employer and employee if

the position at issue is covered by a

collective bargaining agreement. The Ninth

Circuit would preempt even in cases where

the legal rights sought to be enforced arise

independently of any collective bargaining

agreement and can be resolved without

substantial interpretation of any collective

bargaining agreement. In SO doing the Ninth

Circuit has created direct conflict with the

Third and Eighth Circuit Courts of Appeal in

an area where national uniformity is

10

essential to the federal scheme favoring

collective bargaining. See Teamsters v.

Lucas Flour Co., 369 U.S. 95, 103 (1962).

The Ninth Circuit found that Mr.

Beals’ independent employment contract

entered into before he was part of the labor

unit covered by an existing collective

bargaining agreement with Kiewit and which

Kiewit adhered to throughout Mr. Beals’

employment was “superseded” by an existing

collective bargaining agreement. A-6. The

Ninth Circuit reasoned that any independent

employment contract “concerning a job

position covered by the CBA” could be

effective only as part of the collective

bargaining agreement. Id.

The Ninth Circuit relied upon a

trio of its decisions in formulating its

11

Opinion: Principally Olguin y. Inspiration

Consolidated Copper Co., 740 F.24 1468 (9th

Cir. 1984); as well as Young yv. Anthony’s

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

1987) and Stallop v. Kaiser Foundation

Hospital, 820 F.2d 1044 (9th Cir. 1987).

The Ninth Circuit distinguished

its decision in the instant case from the

Court’s Caterpillar Inc., y. Williams, 482

U.S. 386 (1987), opinion by finding that

unlike the Beals’ contract the individual

employment contract in Caterpillar was

“negotiated for a Position not covered by

the CBA at a time when the employee was not

covered by the cBa* (emphasis in the

Original).

1. THIRD CIRCUIT, Berda vy. CBS,

881 F.24 20 (3rd Cir. 1989).

Berda closely Parallels the instant

12

case factually. As in the instant case a

skilled worker was induced to leave a steady

job and employer for a job with a different

employer in another state. 881 F.2d at 21.

As in the instant case the proffered job was

for a position covered by an existing CBA,

and as in the instant case’ Berda was not

affiliated with the employer’s union at the

time of the job offer and acceptance. Id.

As in the instant case Berda’s independent

employment contract included some terms,

namely terms governing job security, more

favorable than similar terms in the CBA. Id.

As in the instant case Berda’s independent

employment contract was partially performed

before Berda affiliated with the union. Id.

Five months later, exactly as long as in Mr.

Beals’ case, the employer breached the

independent contract, terminating Berda in

accordance with the CBA’s provisions. Id.

However, unlike the Ninth Circuit in

13

the instant case, the Third Circuit rejected

the employer's argument that because the

employee’s position was covered by the CBA

the independent contract was governed by an

existing CBA. 17d. at 25 and 26. Relying on

Caterpillar, the Third Circuit court held

that Berda’s State law breach of contract

Claims were not preempted because claims

“premised on pre-employment agree ®nts that

are advantageous to the employee” are saved

from preemption. Id. at 26. The Berda

court also concluded that such claims are

“not substantially dependent on

interpretation of the collective bargaining

agreement under Caterpillar... Id. The

Berda court noted that any of its prior

decisions holding Otherwise do “not survive

Caterpillar.” iG. fini:

In its opinion the Berda court reviewed

the Court’s Caterpillar analysis, pointing

out that the Caterpillar Court had revisited

14

the decision in J.I. Case Co. v. NLRB, 321

U.S. 332 (1944). The Berda court noted that

the Caterpillar Court’s analysis had relied

in part on the distinction drawn in Case

between independent contracts which are more

advantageous to the employee than the

applicable CBA and independent contracts

which are less advantageous. 881 F.2d at 24.

The Berda court specifically noted

Caterpillar’s rejection of the Case-based

argument, apparently given new life by the

Ninth Circuit’s published decision in this

case, that independent pre-employment

contracts are necessarily subsumed in

subsequent collective bargaining agreements.

“Individual employment contracts are not

inevitably superseded by any subsequent

collective agreement covering an individual

employee, and claims based upon them may

arise under state law.” Id. at 24 (quoting

Caterpillar, 107 S.Ct. at 2431). The Berda

15

court further quoted Caterpillar, “the

employer’s basic error was ‘its failure to

recognize that an employee covered by a

collective-bargaining agreement is permitted

to assert legal rights independent of that

agreement, including State-law contract

rights, so long as the contract relied upon

is nota collective bargaining agreement’ .*

Id. (quoting Caterpillar, 107 s.ct. at 2431-

32) (emphasis in original).

The Ninth Circuit’s decision in the

instant case is in direct conflict with the

Third Circuit’s Berda decision. The Ninth

Circuit relied upon Olguin and its progeny.

Olguin and its progeny rely in turn upon

independent contract’s inconsistent terms.

740 F.2d at 1474. But the Ninth Circuit’s

Olguin proposition ought not have survived

Caterpillar. As the Third Circuit has

16

opined, an independent employment contract

entered into by an employee not a member of

the bargaining unit which provides terms

more advantageous to the employee than an

applicable CBA is not superseded by the CBA

even if the contract’s job position happens

to be covered by the CBA particularly where

the claims arising from the independent

contract do not require substantial

interpretation of the CBA.

2. EIGHTH CIRCUIT, Anderson v.

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

1986).

The Eighth Circuit’s Anderson decision

also conflicts directly with the Ninth

Circuit’s decision in the instant case.

In Anderson the union and Ford agreed

that several hundred new hires needed for a

production increase at Ford’s St. Paul plant

would come from the “preferential” hiring

17

list, a common CBA device consisting of a

list of union workers recently laid off from

Other Ford plants around the country. Ford,

however, also hired numerous former Ford

union workers who were not on the

preferential hiring list because they had

been laid off for too long a period of time.

These other hires were subsequently

terminated, replaced by persons from the

preferential hiring list. The laid off

workers then sued under state common law

Claiming Ford breached their individual

contracts and had made actionable

misrepresentations.

The Anderson Court ruled against

preemption, expressly noting that the Ninth

Circuit had reached a different result in

Bale v. General Telephone Co., 795 F.24 775

(9th Cir. 1986), on somewhat similar facts.

803 F.2d at 958. The Eighth Circuit’s

reasoning differed from the Ninth Circuit’s

18

in two respects.

Firstly, the Anderson Court found it

“significant that these [state-law contract]

claims are based on representations Ford

allegedly made before the time appellants

became employees of the company, that is,

before the time they were even covered by

the collective bargaining agreement.” 803

F.2d at 957-58. This timing of competing

contracts apparently led the Anderson court

to conclude:

Appellants are seeking to

establish hiring contracts

created by Ford’s alleged offers

of permanent-status employment

separate from the collective

bargaining agreement. It is clear

that the appellants’ contractual

and quasi-contractual claims do

not originate in, nor refer in

any substantial way to, the

rights and duties established in

the collective bargaining

agreement.

Id. at 958

Thus, the Anderson Court’s analysis

mirrors the analysis of the two district

court judges in this case who reasoned

19

Similarly based in part on the timing of

contract formation.

Secondly, the Anderson court’s

preemption inquiries were (1) whether the

claims at issue derived from the CBA and (2)

whether evaluation of those Claims required

extensive interpretation of the CBA’s terms.

Id. at 956 (citing Allis-Chalmers Corp. v.

Lueck, 471 U.S. 202 (1985). The Anderson

Court measured the essential elements of the

asserted claims against those yardsticks.

The Ninth Circuit’s decision in the

instant case conflicts with the Eighth

Circuit’s Anderson decision. The Ninth

Circuit eschewed the Eighth Circuit’s

preemption inquiries. The Ninth Circuit

ignored the timing of the Beals’ contract

formation. The Ninth Circuit never

evaluated the origin of the Beals’ contract

Claim. Rather than making the Eighth

Circuit’s preemption inquiries the Ninth

20

Circuit focused solely on whether Beals’

forklift/pump operator’s position was

covered by the CBA.

3. Another Pertinent Case.

The Fourth Circuit’s decision, White v.

National Steel Corp., 938 F.2d 474 (4th

Cir. 1991), is in substantial conflict with

the Ninth Circuit’s decision in the instant

case because the employer in White raised

the same argument as the Ninth Circuit found

persuasive, namely that “if the subject

matter of the contract is a position in the

collective bargaining unit, then the

[independent] contract cannot contain terms

inconsistent with those contained in the

collective bargaining agreement.” Id. at

484 (citing Case, supra; Ulrich v. Goodyear

Tire & Rubber Co., 884 F.2d 936, 938 (6th

Cir. 1989); Darden v. U.S. Steel Corp., 830

F.2d 1116, 1120 (11th Cir. 1987); Eitmann v.

21

New Orleans Pub. Serv., Inc., 730 F.2d 359,

364 (5th Cir. 1984).

In dicta, the Fourth Circuit rejected

that argument, focusing its analysis instead

on the source of the asserted right. 938

F.2d at 483. The Fourth Circuit then

weighed whether allowing the employees ’

state law claims to be adjudicated would

“compromise any Principles of federal labor

law” and concluded there was no threat to

federal interests. Id. at 486.

Moreover, the white employees, like Mr.

Beals, sought merely damages, which the

Court had already held were recoverable for

@ breach of an independent contract under

State law even if the independent contract

could not be specifically enforced on

account of subsequent federal labor

agreements. Id. at 485 (citing Belknap

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

the Fourth Circuit found no basis for

preemption.

22

CONCLUSION

The petitioner respectfully requests a

writ issue in this case to resolve the

conflict between the circuit courts of

appeals on this important federal issue.

23

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Brent BEALs,

Plaintiff-Appellant, No. 95-16689

v. : D.C. No.

Ksewrr Paciric Company, INc., CV-91-00471-DAE

Defendant-Appellee.

Brent BEALs,

Plaintiff-Appellant- 6844

Cross-Appellee, Me. 5-1

} D.C. No.

™ " P : ais CV-91-00471-DAE

twit Paciric Company, INc.,

Defendant-Appellee- OPINION

Cross-Appellant.

Appeals from the United States District Court

for the District of Hawaii

David Alan Ezra, District Judge, Presiding

Argued and Submitted

May 5, 1997—Honolulu, Hawaii

Filed June 4, 1997

Before: William A. Norris, Cynthia Holcomb Hall,

A. Wallace Tashima, Circuit Judges.

Opinion by Judge Norris

6460 Beats v. Kiewit Pacaric Company, INc.

SUMMARY

Labor and Employment/

Collective Bargaining Agreements

The court of appeals reversed in part a judgment of the dis-

trict court, and affirmed in part. The court held that the Labor

Management Relations Act (LMRA) preempts a breach of

contract claim based on an independent employment contract

for a position covered by a collective bargaining agreement

(CBA).

Appellee Kiewit Pacific Company offered appellant Brent

Beals a job on a construction project in Hawaii. Kiewit and

Beals signed a “move letter” that described Beals’s position

as a forklifVpump operator. Kiewit agreed to employ Beals

for the duration of the project and promised to pay him speci-

fied wages.

Kiewit already had a CBA that covered that position. The

CBA permitted Kiewit to discharge employees for lack of

work and just cause; and it provided an hourly wage schedule

that was lower than the wage promised Beals.

After being transferred to another position, Beals was dis-

charged before the project ended. Beals sued Kiewit, alleging

breach of contract as to the duration of employment; negligent

misrepresentation as to the duration and nature of employ-

ment; and tortious breach of contract. Kiewit moved for sum-

mary judgment on the ground that the claims were preempted

by federal labor law. The district court granted summary judg-

ment only on the tortious breach of contract claim.

A jury retumed a verdict for Beals on the breach of contract

and negligent misrepresentations claims. The court amended

the judgment, forcing Beals to choose one of the two awards.

Kiewit and Beals cross-appealed.

A- 2

Beats v. Kiewit Paciric Company, INc. 6461

[1] The LMRA preempts state law claims that are bascd

directly on rights created by a CBA as well as claims that arc

substantially dependent on an interpretation of a CBA. [2]

Any independent agreement of employment concerning a job

position covered by a CBA can be effective only as part of the

CBA. The position Beals was hired to fill was covered by thc

CBA. The CBA controlled and any claims seeking to enforce

the terms of the move letter were preempted.

[3] The Supreme Court case relied on by the district court

addressed an individual employment contract negotiated for a

position not covered by the CBA, at a time when the

employee was not covered by the CBA. That case did not

apply.

[4] To prove negligent misrepresentation under Hawaii law.

Beals had to show that Kiewit failed to use reasonable care in

communicating false information to him and that he justifi-

ably relied on that information. Beals did not contest that he

could have been discharged under the CBA. The question

whether he knew about the provisions of the CBA would not

require a court to construe any terms in the CBA because no

relevant provisions were disputed. Beals’s negligent misrepre-

sentations claim was not preempted.

COUNSEL

Lunsford Dole Phillips, Honolulu, Hawaii, for plaintiff-

appellant-cross-appellee Brent Beals.

Charles W. Gall and Nathan Yoshimoto, Kobayashi, Sugita &

Goda, Honolulu, Hawaii, for defendant-appellee-cross-

appellant Kiewit Pacific Company, Inc.

6462 Beas v. Kiewit Paciric Company, INc.

OPINION

NORRIS, Circuit Judge:

Brent Beals sued his former employer, Kiewit Pacific Com-

pany, and won a jury verdict on his state law Claims for

breach of contract and negligent misrepresentation. We affirm

on the negligent misrepresentation claim but reverse on the

breach of contract claim on the ground that the contract claim

is preempted.

I

Brent Beals was working full-time as a concrete pump

Operator for Merli Concrete Company in Southern Califomia

when Stuart Stephens of Kiewit Pacific Company (Kiewit)

offered him a job as a concrete pumper on Kiewit’s Honolulu

airport project. Stephens informed Beals that the airport proj-

ect would entail an “enormous” amount of overtime and that

it would last at least two years. Stephens then faxed Beals a

“move letter” that described Beals’ Position as a forklift/pump

operator, agreed to employ Beals for the duration of the proj-

ect, and promised to pay Beals a weekly subsistence allow-

ance and moving expenses in addition to his hourly wage. The

move letter stated that similar terms were offered only to a

few select individuals and requested that Beals keep the terms

confidential. Beals signed the move letter on February 13,

1991.

At the time that Beals signed the move letter, Kiewit

already had a collective bargaining agreement (CBA) with

Operating Engineers Local Union No. 3 (Local 3) that cov-

ered the position of forklift/pump Operator. The CBA permit-

ted Kiewit to discharge employees for reduction in force and

“just cause.” The CBA also provided an hourly wage schedule

that was lower than the hourly wage promised in Beals’ move

letter. Kiewit, however, assured Beals that it would adhere to

the terms of the move letter regardiess of the CBA, and

A- 4

Beacs v. Ksewrr Paciric Company, Inc. 6463

Kiewit continued to pay Beals his wages and subsistencc

according to the terms of the move letter.

After five weeks at Kiewit, Beals was assigned to a stcel

worker’s job instead of a forklifvpump operator position.

Beals was terminated on July 26, 1991, five months after hc

had been hired. In terminating Beals, Kiewit complied with

the requirements of the CBA.

Beals filed suit against Kiewit alleging breach of contract,

fraudulent and negligent misrepresentation, tortious breach of

’ contract, and two violations of the California Labor Code.

The district court twice denied Kiewit’s motions for summary

judgment on the ground that Beals’ claims were not pre-

empted by federal labor law. DC 3/20/92, 11/4/92 Opns. The

district court reasoned that Beals’ claims fell outside the CBA

because they involved an individual employment contract

negotiated before Beals arrived in Hawaii and before he

became a member of Local 3, and because Beals’ claims did

not substantially depend upon an interpretation of the terms of

the CBA. DC 3/20/92 Opn at 9-10; DC 11/4/92 Opn at 3-4.

The district court also granted Kiewit summary judgment on

the tortious breach of contract claim. DC 6/28/93 Opn.

The jury returned a verdict for Beals on his claims of

breach of contract as to duration of employment, and negli-

gent misrepresentation as to duration and nature of employ-

ment, awarding Beals $93,019 and $121,734, respectively.

Kiewit filed a motion to amend the judgment on the ground

that it was duplicative, and the district court granted thc

motion by forcing Beals to choose one of the two awards. DC

5/17/94 Opn.

Beals appeals the district court’s order granting Kiewit's

motion to amend the judgment and its order granting sum-

mary judgment in favor of Kiewit on the tortious breach of

contract claim. Kiewit cross-appeals the district court's denial

of summary judgment on the preemption issue.

A- 5

6464 Beats v. Kiewit Pactric Company, INc.

Il

[1] Section 301 of the Labor Management Relations Act

(LMRA) preempts state law claims that are based directly on

rights created by a collective bargaining agreement as well as

claims that are substantially dependent on an interpretation of

a collective bargaining agreement. Caterpillar, Inc. v. Wil-

liams, 482 U.S. 386, 394 (1987). Kiewit argues that Beals’

breach of contract and negligent misrepresentation claims are

preempted by §301 because resolution of those claims

requires an interpretation of the terms of the CBA. Kiewit

also argues that the breach of contract claim is preempted

because the move letter on which it is based is superseded by

the CBA. Beals responds that neither the breach of contract

nor the negligent misrepresentation claim requires an interpre-

tation of the terms of the CBA because those terms are not

disputed.

A

[2] Kiewit is correct that the move letter is superseded by

the CBA because any “independent agreement of employment

[conceming a job position covered by the CBA] could be

effective only as part of the collective bargaining agreement.”

Olguin v. Inspiration Consol. Copper Co., 740 F.2d 1468,

1474 (9th Cir. 1984); see also Young v. Anthony's Fish Grot-

tos, Inc., 830 F.2d 993, 997 (9th Cir. 1987); Stalicop v. Kaiser

Found. Hosp., 820 F.2d 1044, 1048 (9th Cir. 1987). More-

over, “[t}o the extent that the [independent agreement] is

inconsistent with the provisions of the collection [sic] bar-

gaining agreement, the bargaining agreement controls.”

Olguin, 740 F.2d at 1474. Since the parties do not dispute that

the position Beals was hired to fill — that of forklif’pump

operator — was covered by the CBA, the CBA controls and

any claims seeking to enforce the terms of the move letter are

preempted.

A - 6

Beats v. Ksewrr Paciric Company, INc. 6465

[3] The district court relied on Caterpillar, 482 U.S. at 386,

to hold that Beals’ move letter was independent of the CBA.

DC 3/20/92 Opn at 8-9. Caterpillar does state that “individual

employment contracts are not inevitably superseded by any

subsequent collective agreement covering an individual

employee, and claims based upon them may arise under state

law.” Caterpillar, 482 U.S. at 396. However, Caterpillar

makes this statement in the context of addressing an individ-

ual employment contract negotiated for a position not covered

by the CBA, at a time when the employee was not covered by

the CBA. See Young, 830 F.2d at 998-99 (distinguishing

Caterpillar because Caterpillar involved breach of contract

claim conceming job not governed by CBA), Stallcop, 820

F.2d at 1048-49 (same). Thus, Caterpillar does not apply to

exempt Beals’ breach of contract claim from § 301 preemption.’

‘For the same reason that Beals’ breach of contract claim is preempted,

his tortious breach of contract claim is also preempted. See Allis-Chalmers

Corp. v. Lueck, 471 U.S. 202 (1985) (state tort claim preempted where

resolution of claim implicates implied good faith provision of labor con-

tract). Therefore, we need not address whether Parnar v. Americana

Hotels, Inc., 652 P.2d 625 (Haw. 1982), prohibits such a cause of action.

Moreover, since we hold that Beals’ breach of contract claim is pre-

empted, we need not address whether the damages awarded on the breach

of contract claim are duplicative of the damages for the negligent misrep-

resentation claim.

A= 2

6466 Beats v. Krewrt Pacaric Company, INc,

pretation of the terms of the CBA because whether Beals’

reliance was justifiable depends on whether Beals should have

known that the CBA permitted Kiewit to terminate him at any

time for lack of work. We disagree. Beals does not contest

that he could have been discharged for lack of work under the

CBA. Indeed, Kiewit concedes that its right to terminate

Beals at any time under the CBA is “undisputed.” See

Defendant's Reply Br. at 1. Thus, the question whether Beals

knew about the provisions of the CBA would not require a

court to Construe any terms in the CBA because no relevant

provisions are disputed. Since none of the terms of the CBA

relevant to Beals’ negligent misrepresentation claim is subject

to conflicting meanings, resolution of that claim will not con-

travene the policy behind § 301 preemption “to ensure uni-

form interpretation of collective-bargaining agreements,”

Lingle, 486 U.S. at 404. Therefore, Beals’ negligent misrepre-

sentations claim is not preempted by § 301.

Although Kiewit does not cite these Cases, we note that

Bale v. General Tel. Co., 795 F.2d 775 (9th Cir. 1986),

Stallcop, 820 F.2d at 1044, and Young, 830 F.2d at 993, do

not dictate a contrary result. Bale held that the plaintiffs’ neg-

ligent misrepresentation claims were preempted because reso-

lution of the claims would require the plaintiffs to show that

the terms of their collective bargaining agreement differed

significantly from the terms of their individual employment

contracts. Without further elaboration on the facts, Bale

reasoned that the negligent misrepresentation claims were

therefore substantially dependent upon an analysis of the

terms of the collective bargaining agreement. Bale, 795 F.2d

at 780. Stalicop and Young merely cited Bale without addi-

tional analysis. We can onty conclude from Bale’s cu

treatment of the issue that the misrepresentation claims in

Bale, as well as those in Stallcop and Young, involved dis-

puted terms of a labor contract. In contrast, Beals and Kiewit

do not dispute the meaning of any of the relevant provisions

of the CBA, so comparison of the terms of the CBA to

A - 8

Beats v. Kiewrr Paciric Company, INc. 6467

Kiewit’s oral representations does not require an interpreta-

tion of the terms of the CBA.

CONCLUSION

Accordingly, the judgment is REVERSED to the extent

that it awards $93,019 to Beals on his breach of contract claim

and AFFIRMED to the extent it awards Beals $121,734 on his

negligent misrepresentation claim. Each side shall bear his or

its own costs on appeal.

mnrrep snares Comms or arrmce E11

JUL 17 1997

BRENT BEALS, COW A

Plaintiff-Appellant U4. COURT OF aeeene

No. 95-16689

Vv. D.C. No. 91-00471-DAE

KIEWIT PACIFIC COMPANY, INC.,

Defendant~-Apvellee

er er et er ee eet et et et et et et

BRENT BEALS,

Tenanee-Sepetiens

Cross-Appellant

No. 95-16844

v.

D.C. No. 91-00471-DAE

KIEWIT PACIFIC COMPANY, INC.,

eee Sept henns

Cross-Appellee.

er ee et et ee eet ee eet ee ee ee ee

Before: NORRIS, HALL, TASHIMA, Circuit Judges

The panel, as constituted above, has voted unanimously

to deny the petition for rehearing. Judges Hall and Tashiza have

voted to reject the suggestion for a rehearing en banc, and Judge

Norris has recommended the sane.

The full court has been advised of the suggestion for en

banc rehearing and no judge of the court has requested « vote on

the suggestion for rehearing en banc. Ped. R. App. P. 35(b).

The petition for rehearing is DENIED, and the suggestion

for a rehearing en banc is REJECTED.

A - 10

ee tawsi Seee \ —

UNITED STATES DISTRICT COURT ™=™"""—"™"

Dustna of Hawa g— Dated

Soman aati

AMENDED

BRENT BEALS JUDGMENT IN A CIVIL CASE

2d

KIJEWTT PACIFIC CO.

Case Number. CIVIL NO. 91-00471DAE

Jury Verdict. This action came before the Court for a rial by jury. The issues have been med and

the jury has rendered its verdict.

Decision by Court. This action came for consideration before the Court. The issues have been

considered and a decision has been rendered.

IT IS ORDERED AND ADJUDGED

that an Amended Final Judgment is bereby entered in favor of Plaintiff and against Defendant in the

amoum of $175.661.51.

cc: all parces

“aye _ 41985 WALTER A.Y.H. CHINN