Reply Brief — Frito-Lay, Inc. v. Huntley

Supreme Court, U.S.

FILED

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No. 99-1912. | AUS 2 4 onan

RARER EI NRE EEE AED CCS IE Rn OR SMP MUI AR HR oc

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Supreme Court of the Uniten_srbe

FRITO-LAY, INC.,

Petitioner,

V.

ROBERT HUNTLEY, MICHAEL HILL, RICHARD HENRY, BRENT

DOVE, KENNETH REYNOLDS, JACKIE JEWELL, MICHAEL MORRIS,

WILLIAM WELCH, BERT BORG, FRED BELLOWS, and SHERMAN

PERKINS, on behalf of themselves and others similarly situated,

Respondents.

On Petition for Writ of Certiorari to the

Court of Appeals of the State of Washington

PETITIONER’S REPLY TO

RESPONDENTS’ BRIEF IN OPPOSITION

Of Counsel: STEVEN T. CATLETT

RUDY A. ENGLUND (Counsel of Record)

DOUGLAS E. SMITH ROBIN D. STUMPF

NANCY W. ANDERSON JONES, DAY, REAVIS & POGUE

_ LANE, POWELL, SPEARS, 77 West Wacker Drive

LUBERSKY LLP Chicago, Illinois 60602

1420 Fifth Avenue, Suite 4100 (312) 782-3939

ns agua Spon E10! Counsel for Petitioner

ARTHUR F. STARRS, JR.

FRITO-LAY, INC.

7701 Legacy Drive

Plano, Texas 75024

(972) 334-3825

_ BEST AVAILABLE COPY ©

TABLE OF CONTENTS

I. THE COURT HAS JURISDICTION TO REVIEW

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Il. RECENT AUTHORITY INDICATES THAT THE

CONFLICT OVER SECTION 301 PREEMPTION

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Il. THE PETITION DOES NOT INVOLVE AN

ARBITRATOR’S POWER TO ADJUDICATE

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IV. WASHINGTON’S APPROACH TO SECTION

301 PREEMPTION CONFLICTS WITH THIS

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Cases

Allis-Chalmers Corp. v. Lueck,

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Atchley v. Heritage Cable Vision Assocs.,

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Belknap, Inc. v. Hale,

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Caterpillar Inc. v. Williams,

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Commodore v. Univ. Mechanical Contractors, Inc.,

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Cramer v. Consol. Freightways, Inc.,

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Firestone v. Southern California Gas Co.,

2000 WL 986929, 164 L.R.R.M. (BNA) 2897

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Lingle v. Norge Div. of Magic Chef, Inc.,

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Livadas v. Bradshaw,

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Ramirez v. Yosemite Water Co., Inc.,

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Wash. Admin. Code § 296-128-540 ................. 3

I. THE COURT HAS JURISDICTION TO REVIEW

THE WASHINGTON COURT OF APPEALS’

DECISION

Respondents initially challenge this Court’s jurisdiction to

review the decision of the Washington Court of Appeals.

(Opp. at 1) But in doing so, they ignore this Court’s decision

in Belknap, Inc. v. Hale, 463 U.S. 491 (1983). In Belknap, a

state trial court held that a state-law claim was preempted by

federal labor law, and granted summary judgment. See id. at

497. The state appellate court reversed, and the state Supreme

Court denied review. See id. The employer then sought

certiorari.

This Court held that its “jurisdiction to affirm or reverse the

[state] Court of Appeals . . . is clear.” Jd. at 497 n.5.

Specifically, Belknap held that the judgment of the state

appellate court was final within the meaning of 28 U.S.C.

§ 1257 because it “finally disposed of the federal preemption

issue” and “to permit the proceedings to go forward without

resolving the preemption issue would involve a serious risk of

eroding the federal [preemption] policy.” Jd. The procedural

posture in this case is identical, and thus, the Court likewise

clearly has jurisdiction.

Il. RECENT AUTHORITY INDICATES THAT THE

CONFLICT OVER SECTION 301 PREEMPTION IS

DEEPENING

In its opening submission, Petitioner noted the substantial

confusion—and resulting conflicting decisions—over the

proper approach to Section 301' preemption of so-called

“independent” state-law claims, such as the wage claims

presented here. (Pet. at 12-15) Even Respondents

acknowledge the “confusing” state of the law (Opp. at 5), and

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

recent authority—in the very federal judicial circuit

encompassing Washington—indicates that this confusion is

generating a deepening conflict.

Specifically, in Firestone v. Southern California Gas Co.,

2000 WL 986929, 164 L.R.R.M. (BNA) 2897 (9th Cir. July

19, 2000), the Ninth Circuit held that state wage and hour

claims for overtime pay were preempted by Section 301. See

164 L.R.R.M. at 2899. The Firestone Court, like the earlier

Seventh Circuit decision in Atchley v. Heritage Cable Vision

Assocs., 101 F.3d 495, 500-01 (7th Cir. 1996) (cited in Pet. at

14), rejected the plaintiffs’ argument based on Livadas v.

Bradshaw, 512 U.S. 107 (1994) and, instead, affirmed the

lower court’s ruling that the overtime claims were preempted

because “resolution of the essential dispute between the parties

about the applicability of the [state overtime] exemption”—the

virtually identical issue in this case—required interpretation of

the collective bargaining agreement. Firestone, 164 L.R.R.M.

at 2899. This approach by the Seventh and now Ninth Circuits

stands in sharp conflict with the approach taken by the

Washington courts, which read Livadas to mean that the

independent legal character of the state overtime claim make

Section 301 preemption unwarranted.

A further conflict is reflected by the Ninth Circuit’s recent

decision in Cramer v. Consol. Freightways, Inc., 209 F.3d

1122 (9th Cir. 2000). In Cramer, the Court held that torts for

privacy invasion and intentional infliction of emotional

distress—which depend on the reasonableness of employee

expectations about privacy and the relationship between the

parties—were preempted since the collective bargaining

agreement “inevitably inform[ed]” these subjective

determinations. /d. at 1127, 1131. But here, in contrast, the

Washington court found no preemption, even though the

substantive issue—i.e., whether respondents are outside

salesmen and thus excluded from Washington overtime

requiremuais—tums on a determination of the parties’ intent

—

regarding the “purpose” of Respondents’ jobs. See Wash.

Admin. Code § 296-128-540; see also Ramirez v. Yosemite

Water Co., Inc., 978 P.2d 2, 13 (Cal. 1999) (noting that

evaluation of outside sales exemption requires consideration

of not only an employee’s evidence, but also the “employer’s

realistic expectations”). Had this issue been presented in

federal court in Washington, that court, following Cramer’s

preemption analysis, would have found Washington’s

subjective “outside salesman” standard to be “inevitably

inform[ed]” by the collective bargaining agreement between

Petitioner and Respondents’ union. See 209 F.3d at 1131. But

since the parties were in state court, the court below ignored

the collective bargaining agreement, and thus Petitioner’s

evidence of the parties’ intent, in its preemption analysis. See

Pet. App. at 11a.

Certiorari should be granted to review and resolve the

conflict over preemption of independent state claims, like the

wage claim here, and to clarify the proper preemption

approach where resolution of the state claim depends on a

determination of the parties’ intent.

Il. THE PETITION DOES NOT INVOLVE AN

ARBITRATOR’S POWER TO ADJUDICATE

STATE CLAIMS

Ignoring the conflicting decisions over Section 301

preemption of independent state claims, Respondents’ main

argument for denying the petition is an exercise in

misdirection. Respondents seek to frame the issue as whether

_an arbitrator can decide state-law claims. (Opp. at 5-6) But

this petition poses no such issue. The Section 301 preemption

issue is entirely distinct from the arbitrability of Respondents’

state-law wage claim. Rather, Section 301 preemption turns

on the extent to which resolution of a state claim involves

interpretation of a collective bargaining agreement. See Lingle

v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 407, 413

(1988). If Respondents’ wage claims are preempted under

4

Section 301, then they are substantively extinguished in favor

of the remedies provided in the collective bargaining

agreement—including the general grievance and arbitration

procedure for challenging classifications, and the special

Route-Review Procedure that enables route salesmen to have

their routes reviewed and restructured. And contrary to

Respondents’ assertion (Opp. at 5), protecting the parties’

expectatic 1s that disputes about job classifications would be

resolved trough one of these mutually-agreed-to procedures

is exactly the policy that Section 301 preemption is designed

to protect. See Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,

220 (1985).

IV. WASHINGTON’S APPROACH TO SECTION 301

PREEMPTION CONFLICTS WITH THIS

COURT’S APPROACH

Finally, Respondents seek to defend Washington’s per-se

Section 301 preemption test as an accommodation of the

state’s interest in enforcing its wage and hour laws. (Opp. at

6) And the test certainly does further the state’s interest; after

all, it allows state claims to escape preemption if plaintiffs can

merely assert their claim without referencing the collective

bargaining agreement. See Commodore v. Univ. Mechanical

Contractors, Inc., 839 P.2d 314, 319 (Wash. 1992). But

defending the test on this basis proves too much. The flaw

‘with Washington’s approach is not that it does not adequately

protect Washington’s interests, but rather that it conflicts with

this Court’s decisions indicating the need to balance state

interests with the federal policies animating Section 301

preemption. See, e.g., Lueck, 471 U.S. at 220; Caterpillar Inc.

v. Williams, 482 U.S. 386, 398 (1987). The Washington

analysis in Commodore and in the decision below allows self-

serving plaintiffs to avoid preemption through artful pleading,

and allows state courts to ignore obviously relevant evidence

in the collective bargaining agreement, as well as the parties’

bargaining history, in deciding issueg of federal preemption.

5

Because Washington’s approach, as illustrated in the opinion

below, plainly deviates from this Court’s jurisprudence, review

is necessary to clarify the Section 301 preemption test and

bring the Washington courts in line with this Court’s

decisions.

CONCLUSION

The petition for writ of certiorari should be granted.

Respectfully submitted,

Of Counsel: STEVEN T. CATLETT

RuDY A. ENGLUND (Counsel of Record)

DOUGLAS E. SMITH ROBIN D. STUMPF

NANCY W. ANDERSON JONES, DAY, REAVIS & POGUE

LANE, POWELL, SPEARS, 77 West Wacker Drive

LUBERSKY LLP Chicago, Illinois 60601

1420 Fifth Avenue (312) 782-3939

Suite 4100 i

Seattle, Washington 98101 Counsel for Petitioner

(206) 223-7000

ARTHUR F. STARRS, JR.

FRITO-LAY, INC.

7701 Legacy Drive

Plano, Texas 75024

(972) 334-3825

Dated: August 24, 2000