Kurt BIRTELL, Plaintiff and Appellant, v. LOCKHEED–CALIFORNIA COMPANY, et al., Defendants and Respondents.
Plaintiff and appellant Kurt Birtell appeals from the “Judgment granting defendants' Motion for Summary Judgment.” In this consolidated action plaintiff alleges that his employer defendant Lockheed 1 tortiously retaliated against him because he reported to the United States Department of Air Force OSI Investigation Unit, Lockheed's “(a) Utilization of noncertified inspectors to inspect top secret military products, in contravention with Military Specifications; (b) Improper calibration standards for inspection of highly sensitive and potentially life-threatening military products [and] (c) [allowing] employees ․ who did not have top secret clearance ․ to work on projects which were classified as top secret.” Plaintiff also alleges that defendants K.E. Kleinberg and Jim Kalish conspired with Lockheed to retaliate against him.
Defendants collectively moved for summary judgment on the grounds that (1) plaintiff's action was preempted by federal law pursuant to section 301 of the Labor Management Relations Act (29 U.S.C. § 185) (hereafter section 301); (2) plaintiff's action was barred because he failed to exhaust his administrative remedies under available grievance procedures and (3) plaintiff's action was barred by the six-month statute of limitations applicable to action under section 301.
The following facts were undisputed: plaintiff was part of a collective bargaining unit addressed in a collective bargaining agreement between defendant Lockheed and plaintiff's union. Under that agreement defendant Lockheed retained control of disciplining its employees for just cause. Any claim that defendant acted contrary to the agreement could be addressed through the grievance mechanism set forth in that agreement. Plaintiff filed grievances on August 14, 1987 and on November 11, 1981. Those grievances proceeded through step two of the grievance procedure outlined in the collective bargaining agreement. Plaintiff took no further action on either grievance.
While plaintiff disputes whether the subject matter of those grievances constitutes the entirety of the conduct of which he complains in this action it is clear that at least a substantial part of the conduct which formed the basis of plaintiff's grievances also forms the basis of this action.
In opposition to the motion for summary judgment, plaintiff submitted his declaration and that of his counsel which incorporated various deposition excerpts.
In his declaration plaintiff outlined his rapid ascension as an employee of defendant Lockheed, ultimately leading to his position as an “ultrasonics inspector.” Plaintiff explained that while in that capacity he “observed that certain inspection procedures on the C–4 Trident missile nose cap were not being done according to military specifications.” He also noticed that “other tests performed by Ultrasonics Inspectors were not proper and that certification of such inspections were not according to specifications.”
Plaintiff explains that the measures he took at Lockheed in an effort to correct these violations were of no avail. Accordingly he decided to take his concerns elsewhere. He was eventually put in touch with one William Edwards an investigator with the United States Air Force office of special investigations. Mr. Edwards decided an investigation was warranted. The day following plaintiff's initial meeting with Mr. Edwards, Lockheed commenced its retaliatory conduct against plaintiff. This retaliatory conduct eventually included Lockheed's suspension of plaintiff's access to security projects; his transfer from the lab in which he was working; his assignment to an entry level position; unavailability of overtime; implied and express threats to his job security; being singled out for reprimand and being passed over for advancement.
In one of several deposition excerpts plaintiff submitted in opposition to summary judgment, Mr. Edwards testified that during his investigation “in reviewing the records of training of some of the inspectors that some of the inspectors who had not been trained for certain procedures had signed off as having accomplished those procedures.” Mr. Edwards elaborated “[t]here was a major problem with the inspection of some P–3 wings. The P–3 Orient is a type of airplane.” At the conclusion of his investigation Mr. Edwards “felt that we had enough facts to make the case appealing to the U.S. Attorney. Unfortunately, ․ the U.S. Attorney did not feel that it was worthy of prosecution.” The U.S. Attorney felt “the case lacked sufficient merit for prosecution․ [T]here was a technical violation, but no loss to the government allegedly.” Mr. Edwards thought the situation that plaintiff had uncovered “was dangerous for air force people and equipment [and] was corrected as a result of his action.” 2
The trial court granted defendants' motion for summary judgment. It ruled that “all claims asserted by plaintiff in both actions are preempted by section 301 of the Labor Management Relations Act, and as such plaintiff's claims in the within pending consolidated actions must be dismissed as preempted by federal law. In addition, ․ all claims asserted by plaintiff in both actions are barred by reason of plaintiff's failure to exhaust the grievance procedure set forth in the collective bargaining agreement, and that plaintiff agreed that each grievance should be closed․ [Moreover] the exception relied upon by plaintiff ․ to the requirement that the grievance procedures set forth in the collective bargaining agreement be exhausted is not applicable to [this consolidated action].”
On appeal plaintiff contends that his action is not preempted by federal law.
“The purpose of the summary judgment procedure under Code of Civil Procedure section 437c is to expedite litigation by avoiding needless trials. [Citation.] A summary judgment must, and may only, be properly granted where no material triable issue of fact exists and the moving party's affidavits set forth sufficient facts to sustain a judgment in its favor. [Citations.] When no triable issue of fact exists and the contentions of the parties turn upon an issue of law, summary judgment is proper. [Citation.] Inasmuch as summary judgment denies the right of an adverse party to a full trial of the case, it should be used with caution. Any doubts as to the propriety of granting such motion should be resolved against the moving party. [Citation.]” (Ferrell v. Southern Nevada Off–Road Enthusiasts, Ltd. (1983) 147 Cal.App.3d 309, 313, 195 Cal.Rptr. 90.)
Employing this standard we must determine whether as a matter of law defendants' alleged tortious retaliation against plaintiff, which forms the basis for all of plaintiff's causes of action, is preempted by section 301. Section 301 provides: “Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ․ or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties․” (29 U.S.C. § 185(a).) Under this section “[a] suit for breach of a collective bargaining agreement is governed exclusively by federal law․” (Young v. Anthony's Fish Grottos, Inc., (9th Cir.1987) 830 F.2d 993, 997.)
The basis for federal preemption in this area comes from the fact that “the subject matter of § 301(a) ‘is peculiarly one that calls for uniform law.’ [Citations.] The possibility that individual contract terms might have different meanings under state and federal law would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements. Because neither party could be certain of the rights which it had obtained or conceded, the process of negotiating an agreement would be made immeasurably more difficult by the necessity of trying to formulate contract provisions in such a way as to contain the same meaning under two or more systems of law which might someday be invoked in enforcing the contract. Once the collective bargain was made, the possibility of conflicting substantive interpretation under competing legal systems would tend to stimulate and prolong disputes as to its interpretation. Indeed, the existence of possibly conflicting legal concepts might substantially impede the parties' willingness to agree to contract terms providing for final arbitral or judicial resolution of disputes.” (Teamsters Local v. Lucas Flour Co. (1962) 369 U.S. 95, 103–104, 82 S.Ct. 571, 576–77, 7 L.Ed.2d 593, fn. omitted.)
Recently the Supreme Court in Allis–Chalmers Corp. v. Lueck (1985) 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206, analyzed whether the policy set out in Lucas Flour required preemption of an action by an employee for an employer's alleged breach of the covenant of good faith even though it was not a direct suit for breach of contract. The court commenced its analysis by explaining: “If the policies that animate § 301 are to be given their proper range, ․ the pre-emptive effect of § 301 must extend beyond suits alleging contract violations. These policies require that ‘the relationships created by [a collective bargaining] agreement’ be defined by application of ‘an evolving federal common law grounded in national labor policy.’ [Citation.]” (Allis–Chalmers Corp. v. Lueck, supra, 471 U.S. 202, 210–211, 105 S.Ct. 1904, 1911, 85 L.Ed.2d 206.) However, the court was careful to explain that “[i]n extending the pre-emptive effect of § 301 beyond suits for breach of contract, it would be inconsistent with congressional intent under that section to pre-empt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.” (Id., at p. 212, 105 S.Ct. at 1912, fn. omitted; italics added.)
In light of this standard the court explored the origins of an action for breach of a covenant of good faith and concluded “[t]he duties imposed and rights established through the state tort ․ derive from the rights and obligations established by the contract.” (471 U.S., at p. 217, 105 S.Ct. at p. 1914.) Therefore, the court held that the action for breach of a covenant of good faith there involved was inextricably intertwined with the terms of the collective bargaining agreement and thus was preempted by section 301. In reaching this conclusion, the court passed “no judgment on whether an independent, nonnegotiable, state-imposed duty which does not create similar problems of contract interpretation would be pre-empted under similar circumstances.” (Ibid., fn. 11.)
The issue now before us boils down to whether, under the standard set out in Allis–Chalmers, an action by an employee under state law for an employer's allegedly tortious retaliatory conduct, is preempted under section 301.
The various jurisdictions to have considered whether an employee's action based on the employer's retaliatory conduct is preempted under section 301 have reached divergent results. (E.g. Gonzalez v. Prestress Engineering Corp. (1986) 115 Ill.2d 1, 104 Ill.Dec. 751, 503 N.E.2d 308 [no preemption of action by employee against employer for discharge in retaliation of employee's exercise of worker's compensation rights]; Baldracchi v. Pratt & Whitney Aircraft Div. (2d Cir.1987) 814 F.2d 102 [same]; Johnson v. Hussmann Corp. (8th Cir.1986) 805 F.2d 795, 797 [preemption of claim by employee against employer for discharge in retaliation of exercise of worker's compensation rights]; Vantine v. Elkhart Brass Mfg. Co., Inc. (7th Cir.1985) 762 F.2d 511, 517 [same].) The Supreme Court has thus far declined to consider this issue. (Prestress Eng. Corp. v. Gonzalez (1987) ––– U.S. ––––, ––––, 107 S.Ct. 3248, 3248, 97 L.Ed.2d 779, 780; see Electrical Workers v. Hechler (1987) 481 U.S. 851, ––––, fn. 5, 107 S.Ct. 2161, 2168–69, fn. 5, 95 L.Ed.2d 791, 803–804, fn. 5 [court holds employee did not preserve issue that his tort claim was based on a state law independent of the employment contract. Therefore, the court declined to rule on the effect that state law would have on the preemption issue].)
Even within the Ninth Circuit, the law in this area is less than clear. In Garibaldi v. Lucky Food Stores, Inc. (9th Cir.1984) 726 F.2d 1367, certiorari denied 471 U.S. 1099, an employee claimed he was discharged in violation of public policy in retaliation for his report to local health authorities that he had been instructed by his employer to deliver adulterated milk.
The court focused on the California Supreme Court's opinion in Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330, which approved an employee's right to sue his employer for wrongful discharge for refusal to fix retail gasoline prices in violation of federal law. In Tameny the court recognized the “employer's obligation to refrain from discharging an employee who refuses to commit a criminal act does not depend upon any express or implied ‘ “promise[s] set forth in the [employment] contract” ’ ․ but rather reflects a duty imposed by law upon all employers in order to implement the fundamental public policies embodied in the state's penal statutes.” (Id., at p. 176, 164 Cal.Rptr. 839, 610 P.2d 1330.)
Based on the nature of this tort, the Garibaldi court held that action was not preempted. The court reasoned: “A claim grounded in state law for wrongful termination for public policy reasons poses no significant threat to the collective bargaining process; it does not alter the economic relationship between the employer and employee. The remedy is in tort, distinct from any contractual remedy an employee might have under the collective bargaining contract. It furthers the state's interest in protecting the general public—an interest which transcends the employment relationship.” (Garibaldi v. Lucky Food Stores, Inc., supra, 726 F.2d at p. 1375.)
Following Garibaldi, the Ninth Circuit has rendered several opinions in an effort to define the limits of preemption in cases based on retaliatory discharge. For example, in Paige v. Henry J. Kaiser Co. (9th Cir.1987) 826 F.2d 857, appeal pending, the court held an action by a group of employees was not preempted where they were terminated due to their refusal to fill generators with gasoline under unsafe conditions in violation of state health and safety standards. The court concluded “[s]tate health and safety standards benefit all employees as individual workers, not because they are or are not members of a collective bargaining association. And California's interest in providing the private cause of action is in the enforcement of the underlying statute or public policy, not to regulate the employment relationship.” (Id., at p. 863.)
On the other hand in Young v. Anthony's Fish Grottos, Inc., supra, 830 F.2d at page 1002, the court held that an employee's claim that she was fired in retaliation for organizing a protest of an IRS “tip audit” was preempted by section 301. The court reasoned there is no “public policy of California protecting opposition to IRS tax audits. Because no state public policy transcending the employment relationship protects [the plaintiff's] actions her wrongful termination claim is preempted.” Similarly in DeSoto v. Yellow Freight Systems, Inc. (9th Cir.1987) 820 F.2d 1434, 1438, the court held a plaintiff's claim that he was fired for refusal to drive a truck which he erroneously believed had expired registration was preempted under section 301. “Unlike Garibaldi, [the plaintiff] was not fired because of obedience to a state statute designed to protect the health of the citizens of California. He was fired because he had in good faith believed that it was illegal for him to drive the trailer without the requisite permits in the truck.” (DeSoto v. Yellow Freight Systems, Inc., supra, 820 F.2d at p. 1438.)
Finally, in Olguin v. Inspiration Consolidated Copper Co. (9th Cir.1984) 740 F.2d 1468, plaintiff sought to state a claim for wrongful termination in violation of public policy under Arizona law based upon his employer's alleged violation of the federal mine safety and health act. In holding his action was preempted, the Court of Appeal reasoned: “Arizona has little interest in enforcing federal law, even if the federal law is incorporated, as [the plaintiff] suggests, in the state's general public policy.” (Id., at p. 1475.)
Defendants interpret this line of cases as holding section 301 preemption applies unless “a clearly identifiable, substantial state public policy was being furthered by the employee's conduct.” In other words, they state, it is not sufficient that the employee's claim under state law is wholly independent of the labor agreement and can be decided without reference to that agreement. Additionally the state policy furthered by the employee's action must be “substantial,” otherwise the action is preempted. Indeed there is language in the above cited Ninth Circuit cases to support defendants' interpretation.
However, in order to construe those cases to be consistent with the Supreme Court's reasoning on the subject, as expressed in the Lucas Flour and Allis–Chalmers opinions, we must conclude that the weight of the state policy furthered by the employee's extra contractual cause of action is not dispositive of the preemption issue. Rather, as long as the state has seen fit to recognize a cause of action available to all employees, regardless of the terms of any labor contract to which an employee may or may not be a party, which cause of action can be completely litigated without reference to any such labor agreement, there is no preemption under section 301.
Otherwise courts would be required to engage in a balancing test to determine the preemption issue: if the state policy is “substantial” enough there would be no preemption, if it were not then there would be preemption. In Allis–Chalmers, the court was careful to note that unlike the standard to determine whether there is preemption to protect the jurisdiction of N.L.R.B. where there is a balancing of federal and state interests (San Diego Unions v. Garmon (1959) 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775) “[i]n this situation the balancing of state and federal interests ․ is irrelevant, since Congress, acting within its power under the Commerce Clause, has provided that federal law must prevail.” (Allis–Chalmers Corp. v. Lueck, supra, 471 U.S. at p. 214 fn. 9, 105 S.Ct. at p. 1913 fn. 9.) Simply put, the weight of the state interest is irrelevant to the preemption issue. Instead, under Allis–Chalmers, preemption turns solely on whether the state cause of action is wholly independent of any labor agreement. If it is, there is no preemption.
The sole California state court decision to discuss section 301 preemption in this setting is Friday v. Hughes Aircraft Co. (1986) 188 Cal.App.3d 117, 236 Cal.Rptr. 291. In Friday, plaintiff argued his action for wrongful termination was not preempted by section 301 because his termination was in part, a result of the employer's retaliation for his complaints about the safety of his workplace. In rejecting this argument the court reasoned: “We find the facts reported in [the plaintiff's] declaration imply nothing more than complaints about the safety of his workplace, a subject expressly covered by ․ the collective bargaining agreement. [The plaintiff] did not report the clear violation of a specific statute for the protection of the general public, as in Garibaldi, but complained of what he perceived to be unsafe internal practices in the handling of chemicals. Unlike Garibaldi, where the maintenance of the state law cause of action was justified ‘to assist in the enforcement of statutes or policies extrinsic to the employment relationship’ (citation), allowing [the plaintiff's] wrongful termination action to go forward would involve consideration of the terms of the labor contract and directly interfere with federal regulation of disputes arising out of collective bargaining agreements.” (Id., at p. 124.)
Defendants read Friday as holding that whenever the subject of a state cause of action is covered by a collective bargaining agreement that cause of action is preempted by section 301. While there is language in Friday that could be used to support defendants' position, such a conclusion would be inconsistent with Allis–Chalmers. There the court concluded: “[There is no] suggestion that Congress, in adopting § 301, wished to give the substantive provisions of private agreements the force of federal law, ousting any inconsistent state regulation. Such a rule of law would delegate to unions and unionized employers the power to exempt themselves from whatever state labor standards they disfavored. Clearly, § 301 does not grant the parties to a collective-bargaining agreement the ability to contract for what is illegal under state law. In extending the preemptive effect of § 301 beyond suits for breach of contract, it would be inconsistent with congressional intent under that section to pre-empt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.” (Allis–Chalmers Corp. v. Lueck, supra, 471 U.S. at pp. 211–212, 105 S.Ct. at p. 1911, fn. omitted, italics added.)
Thus, even assuming, arguendo, defendants are correct in claiming the subject matter of this suit is covered by the collective bargaining agreement, as long as California state law establishes a right in plaintiff independent of that agreement there is no preemption. Accordingly, we must determine whether there is an issue of material fact whether the subject matter of this suit is actionable under California law independent of the subject collective bargaining agreement.
Defendants argue no such independent cause of action exists inasmuch as there is no “authority which supports [plaintiff's] claim that this state possesses a public policy interest in protecting all alleged ‘whistle-blowers' under all circumstances. It is only where the purported ‘whistle blowing’ is undertaken in an effort to further a specific matter of state or local concern that such a public policy has been or may be found.”
However, under circumstances virtually identical to that in the present case the court in Garcia v. Rockwell Intern. Corp. (1986) 187 Cal.App.3d 1556, 232 Cal.Rptr. 490, recognized an employee's cause of action for wrongful retaliation. In Garcia, the plaintiff sued his employer claiming it wrongfully retaliated against him because he informed a representative of NASA that defendant was engaged in overcharging. The trial court granted summary judgment in favor of defendant and the Court of Appeal reversed.
First the court held that a cause of action could be stated under Tameny v. Atlantic Richfield Co., supra, 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330, for an employer's retaliatory conduct falling short of termination of the employee. The court then concluded: “There is no question public policy forbids retaliatory action taken by an employer against an employee who discloses information regarding an employer's violation of law to a government agency. Labor Code section 1102.5, subdivision (b) provides: ‘No employer shall retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or violation or noncompliance with state or federal regulation.’ ” (Garcia v. Rockwell Internat. Corp., supra, 187 Cal.App.3d at p. 1561, 232 Cal.Rptr. 490, fn. omitted.)
The court noted that while “Labor Code section 1102.5 was enacted in 1984 [and was effective on January 1, 1985], after the retaliatory action alleged by plaintiff in this case ․ in our view, the Labor Code section merely enunciated already existing public policy.” (187 Cal.App.3d at p. 1561, fn. 1, 232 Cal.Rptr. 490.)
In the present case the acts of alleged retaliation which form the basis of plaintiff's first action (L.A.S.C. No. C418007) occurred prior to the effective date of Labor Code section 1102.5 while the acts which form the basis of plaintiff's second action (L.A.S.C. No. C543095) occurred after the effective date of that section. However, regardless of the applicability of that section all of the alleged acts clearly violated the public policy of this state which forbids “retaliatory action taken by an employer against an employee who discloses information regarding an employer's violation of law to a government agency.” (187 Cal.App.3d at p. 1561, 232 Cal.Rptr. 490.)
In arguing Labor Code section 1102.5 does not apply here, defendants assert “the record on appeal does not contain any evidence to support a claim that [plaintiff's] communication with the OSI was for the purpose of reporting ‘a violation of state or federal statute, or violation or noncompliance with a state or federal regulation.’ ”
This assertion fails for several reasons. First, defendants lose sight of the posture of this case. Defendants moved for summary judgment. Accordingly, it was their burden “to negate completely an essential element of plaintiff's case or to establish a complete defense. [Citation.]” (Fireman's Fund Ins. Co. v. City of Turlock (1985) 170 Cal.App.3d 988, 994, 216 Cal.Rptr. 796.) Thus, in arguing that plaintiff has not stated a claim for violation of public policy it was incumbent on defendants to demonstrate plaintiff's claim fell outside of the reach of Labor Code section 1102.5 and the policy which it codified. If the record on appeal contains no evidence on this issue, that indicates only that defendants failed to meet their burden in this regard.
However, the record on appeal does contain evidence on this issue. In the deposition of Inspector Edwards he testified he felt that Lockheed's actions “probably [violated] something like 1001 USC; 1001, [3 ] false statements; the stamping of a particular document offered to the government.” This alone prevents us from concluding as a matter of law that plaintiff did not report a violation of statute or regulation.
We therefore necessarily conclude that issues of material facts exist as to whether defendants engaged in retaliatory conduct in violation of the public policy of this state as reflected in Labor Code section 1102.5. Since the determination of whether defendants engaged in this tortious conduct is wholly independent of the collective bargaining agreement this action is not preempted by section 301.4 Accordingly, the trial court abused its discretion in erroneously concluding plaintiff's claims were preempted by section 301.
Finally, because we conclude this action is not preempted by section 301 and since this action is grounded on a tort theory, we need not, and do not, reach defendants' contentions that plaintiff failed to exhaust his administrative remedies and that his claims are barred by the six-month statute of limitations applicable to actions under section 301. Both contentions are wholly premised on the application of section 301 and are not relevant unless this action is preempted by that section. (See Garibaldi v. Lucky Food Stores, Inc., supra, 726 F.2d at p. 1375.)
Judgment for respondents is reversed. Appellant shall recover his costs on appeal.
1. Throughout this opinion reference to defendant Lockheed indicates a reference collectively to defendants Lockheed–California Company and Lockheed Corporation.
2. Defendants submitted a series of evidentiary objections to plaintiff's declarations. However, defendants' failure to procure a ruling by the trial court on these objections constitutes a waiver of them. (3 Witkin, Cal. Evidence (3d ed. 1986) Introduction of Evidence at Trial, § 2030, pp. 1992–1993.)
3. This is an obvious reference to 18 United States Code section 1001.
4. Plaintiff pleads several causes of action based upon the retaliatory conduct in which defendants allegedly engaged. In his first action he pleads causes of action for breach of the implied covenant of good faith and fair dealing, unlawful employment practices, conspiracy to harass and retaliate and intentional infliction of emotional distress. In his second action he alleges identical causes of action. Since each cause of action is based on the identical alleged conduct which is actionable independent of the collective bargaining agreement there is no section 301 preemption. The label attached to the various causes of action is irrelevant to a determination of the preemption issue and the propriety of the issuance of the summary judgment. (See Plumbers' Union v. Borden (1962) 373 U.S. 690, 698, 83 S.Ct. 1423, 1428, 10 L.Ed.2d 638 [“It is not the label affixed to the cause of action under state law that controls the determination of the relationship between state and federal jurisdiction”].) In concluding there is no section 301 preemption of the subject matter of this consolidated action, we need not, and do not, decide whether each independent cause of action is adequately pleaded.
McCLOSKY, Acting Presiding Justice.
GEORGE and ROTHMAN,* JJ., concur.