BRIAN UNBEHAUN v. MINNESOTA ENERGY RESOURCES CORPORATION (2024)

ORDER ON MOTION FOR JUDGMENT ON THE PLEADINGS

Plaintiff Brian Unbehaun worked for Defendant Minnesota Energy Resources Corp. (“MERC”) as a gas distribution system designer. MERC terminated Unbehaun after he failed a random drug test. After Unbehaun and his union exhausted the grievance procedures and arbitration proceedings under the applicable collective-bargaining agreement (“CBA”), Unbehaun sued MERC for violating Minnesota's Drug and Alcohol Testing in the Workplace Act (“DATWA”). MERC now moves for judgment on the pleadings. (ECF No. 55.) For the reasons below, the motion is granted in part and denied in part.

BACKGROUND

I. Unbehaun's Employment with MERC

MERC delivers natural gas to customers in the state of Minnesota. In 2016, MERC hired Unbehaun and eventually promoted him to the position of gas distribution system designer. (ECF No. 1-1 (“Compl.”) ¶¶ 5–6.) As a designer, Unbehaun designed and estimated customer-initiated requests, customer or government relocation requests, and smaller infrastructure projects. (Id. ¶ 7.)

Unbehaun was a member of a bargaining unit covered by a CBA with International Union of Operating Engineers Local 49 (“Union”). (See Compl. ¶ 34 (referencing the CBA); ECF No. 61 at 6, 28 ¹ .) The CBA includes a section on drug and alcohol testing procedures (Article XVI), which notes that bargaining unit employees are subject to MERC's “Alcohol and Other Drug Use Policy (and related procedures)” (“Drug Use Policy”). (ECF No. 61 at 24.) The policy allows for random drug testing of employees; it applies to all employees, regardless of representation by a collective-bargaining unit. (Id.; Compl. ¶ 26.)

In March 2022, Unbehaun was selected for random testing. (Compl. ¶ 14.) MERC did not provide Unbehaun with its Drug Use Policy that day, nor did it ask that he acknowledge in writing having the policy. (Id. ¶ 15.) He took the test and tested positive for marijuana. (Id. ¶¶ 16–17.) MERC informed Unbehaun of the test results and suspended him. (Id. ¶¶ 17, 20.) MERC did not inform Unbehaun that he could request a confirmatory retest in writing or permit him to participate in drug counseling or a rehabilitation program.² (Id. ¶¶ 18, 32.) A few days later, MERC terminated Unbehaun's employment “as a result of a violation of the Employer's Alcohol and Other Drug Use Policy.” (Id. ¶ 22.)

After his termination, Unbehaun and the Union exhausted the required grievance procedures and arbitration proceedings under the CBA. (Id. ¶¶ 33–34.) In arbitration, Unbehaun asserted that he was not subject to the Drug Use Policy because he did not perform any “covered functions” (as defined by the Pipeline and Hazardous Materials Safety Administration (“PHMSA”)) on the gas pipeline, he worked in an office rather than in the field, and his duties were not the kind in which an impairment caused by drug usage would threaten the health or safety of any person. (Id. ¶¶ 9, 12–13; ECF No. 61-1 at 19.) The arbitrator denied the grievance, concluding that Unbehaun “was subject to random drug testing under the provisions of federal law and regulations” and that MERC “acted with just cause when it discharged [Unbehaun] for failing a drug test.” (ECF No. 61-1 at 32.)

II. This Litigation

Unbehaun then sued MERC, asserting that it had violated DATWA, a statute that imposes “minimum standards and requirements for employee protection” regarding an employer's drug and alcohol testing policy in Minnesota.³ Minn. Stat. § 181.955, subdiv. 1; (see Compl. ¶¶ 25–37.) Under DATWA, an employer may only require employees to undergo random drug testing if “they are employed in safety-sensitive positions.”⁴ Minn. Stat. § 181.951, subdiv. 4. DATWA prohibits an employer from discharging an employee based on “a positive test result from an initial screening test that has not been verified by a confirmatory test.” Minn. Stat. § 181.953, subdiv. 10(a). It also prohibits an employer from discharging a first-time offender-employee unless the employee is first offered the opportunity to participate in treatment and either refuses to participate or fails to successfully complete the program. Id., subdiv. 10(b)(1)–(2). DATWA allows an employer to disclose evidence of a positive test result on a confirmatory test in certain circumstances, including to any federal agency as required under federal law, regulation, or order. Minn. Stat. § 181.954, subdiv. 3. DATWA does not limit parties to a CBA from bargaining and agreeing about a drug and alcohol testing policy “that meets or exceeds, and does not otherwise conflict with, the minimum standards and requirements for employee protection” provided by DATWA. Minn. Stat. § 181.955, subdiv. 1.

Unbehaun alleges that MERC violated DATWA by:

(1) having a drug and alcohol policy that does not contain the minimum information required by DATWA, (Compl. ¶¶ 26, 28(a));

(2) requiring Unbehaun to submit to a random drug test when he was not employed in a safety-sensitive position, (id. ¶ 28(b); see id. ¶ 27);

(3) failing to inform Unbehaun in writing of his rights relating to testing, (id. ¶¶ 29–30);

(4) discharging Unbehaun without a confirmatory test verifying his initial drug screening, (id. ¶ 31);

(5) failing to offer Unbehaun counseling or rehabilitation before discharging him, (id. ¶ 32); and

(6) disclosing Unbehaun's positive test result to a federal agency without a confirmatory test, (id. ¶ 33).

MERC now moves for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure.

ANALYSIS

I. Legal Standard

A Rule 12(c) motion is generally assessed under the same standards as a Rule 12(b)(6) motion. In re Pre-Filled Propane Tank Antitrust Litig., 893 F.3d 1047, 1056 (8th Cir. 2018); see Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990) (noting that the distinction between a Rule 12(b) motion and a Rule 12(c) motion is “purely formal”). Rule 12(b)(6) requires that the Court dismiss a complaint for failure to state a claim upon which relief can be granted if it fails to plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Court must “tak[e] all facts alleged in the complaint as true, and mak[e] reasonable inferences in favor of the nonmoving party.” Smithrud v. City of St. Paul, 746 F.3d 391, 397 (8th Cir. 2014). Although the factual allegations need not be detailed, they “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Because this is a Rule 12(c) motion, the Court may consider only the parties’ pleadings, some public records, and documents attached to or necessarily embraced by the pleadings. Noble Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 982 (8th Cir. 2008). The Court may also take judicial notice of a fact that is “not subject to reasonable dispute.” Fed. R. Evid. 201(b), (d). The Court will consider the documents referenced in the complaint, including the CBA and MERC's Drug Use Policy. (ECF Nos. 61, 73-1; see Compl. ¶ 26 (alleging MERC's “Drug and Alcohol Policy” violates DATWA); id. ¶ 27(a) (referencing MERC's “written drug and alcohol testing policy”); id. ¶ 34 (referencing the CBA).)

MERC relies on the findings in the arbitration award to support its motion, which is neither referenced in the complaint nor a matter of public record. Unbehaun does not object to the Court's consideration of the award and cites the award in opposing MERC's motion. (See ECF No. 64 at 14–15 (citing ECF No. 61-1), 22–23 (same).) Courts have taken judicial notice of arbitration awards on a motion to dismiss without converting the motion to one for summary judgment. See, e.g., Glover v. Verizon Wireless, No. 22-CV-1093 (ADM/DJF), 2024 WL 384866, at *3 (D. Minn. Feb. 1, 2024); MMA Consultants 1, Inc. v. Republic of Peru, 245 F. Supp. 3d 486, 500–01 (S.D.N.Y. 2017) (concluding that an arbitration award could be judicially noticed), aff'd, 719 F. App'x 47, 49-50 (2d Cir. 2017). Given that the parties do not dispute the award's veracity and both rely on the award to support their positions in connection with this motion, the Court will take judicial notice of the arbitration award without converting this motion to one for summary judgment.⁵

Now on to the merits. MERC moves for judgment on the pleadings on five grounds: (1) field preemption; (2) conflict preemption; (3) federal labor law preemption; (4) issue preclusion/collateral estoppel; and (5) because DATWA does not permit “do-over” litigation.

II. Field and Conflict Preemption

Under the Supremacy Clause of the Constitution, Congress may “pre-empt, i.e., invalidate, a state law through federal legislation.” Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 376 (2015). It may do so through “field” preemption or “conflict” preemption. MERC argues that both types of preemption bar Unbehaun's DATWA claims.⁶ As the party asserting preemption, MERC has the burden of establishing that it applies. Williams v. Nat'l Football League, 582 F.3d 863, 880 (8th Cir. 2009).

A. Field Preemption

The Court begins with field preemption because it resolves MERC's motion if, as MERC contends, DATWA is preempted by the Natural Gas Act of 1938 (“NGA”) and certain Department of Transportation (“DOT”) regulations. Field preemption exists where Congress intended “to foreclose any state regulation in the area, irrespective of whether state law is consistent or inconsistent with federal standards.” Oneok, 575 U.S. at 377 (quotation marks and citation omitted). In those cases, Congress has forbidden the State to act in the field that the federal statute preempts.

In enacting the NGA, “Congress occupied the field of matters relating to wholesale sales and transportation of natural gas in interstate commerce.” Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 305 (1988) (citing Ill. Nat. Gas Co. v. Cent. Ill. Pub. Serv. Co., 314 U.S. 498, 506–07 (1942)). When a state law affects the federal regulator's ability “to regulate comprehensively the transportation and sale of natural gas, and to achieve the uniformity of regulation”—an objective of the NGA—“or presents the prospect of interference with the federal regulatory power, then the state law may be pre-empted even though collision between the state and federal regulation may not be an inevitable consequence.” Id. at 310 (cleaned up, citation omitted). But “every state statute that has some indirect effect on rates and facilities of natural gas companies is not pre-empted.” Id. at 308; see, e.g., Oneok, 575 U.S. 373, 390 (holding that the NGA did not field-preempt states’ antitrust laws).

MERC does not assert—nor could it—that DATWA's central purpose involves regulation of the transportation or sale of natural gas. Instead, MERC claims that DATWA “conflict[s] with the Congressional mandate in the Natural Gas Act and the role of federal agencies charged with regulating the safe transportation of natural gas in interstate commerce.” (ECF No. 57 at 25.) The Court disagrees. “States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State ․” Chamber of Com. of U.S. v. Whiting, 563 U.S. 582, 588 (2011) (citation omitted). MERC cites no case in which a court held that the NGA field-preempts a state's regulation of employee drug testing or other similar workplace issue. And the Court could not find one. To the extent that DATWA has “some indirect effect on rates and facilities of natural gas companies” it is not pre-empted. Schneidewind, 485 U.S. at 308; see generally Williams v. BHI Energy I Power Servs., LLC, No. 0:21-CV-1186 (KMM/DTS), 2023 WL 5403796, at *5 (D. Minn. Aug. 24, 2023) (In the context of the Atomic Energy Act, “BHI cannot credibly argue that DATWA ․ attempts to regulate within a field the federal government has entirely occupied.”).

B. Conflict Preemption

Conflict preemption voids state laws when either (1) “compliance with both federal and state regulations is a physical impossibility,” or (2) “the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” WinRed, Inc. v. Ellison, 59 F.4th 934, 944 (8th Cir. 2023) (citing Arizona v. United States, 567 U.S. 387, 399 (2012)). When considering arguments about a federal law's preemptive effect, “[i]t is not enough for a party to ‘rest on a supposition (or a wish)’ that a conflict ‘must be in there somewhere.’ ” BHI, 2023 WL 5403796, at *13 (citing Va. Uranium, Inc. v. Warren, 587 U.S. 761, 767 (2019)).

MERC asserts that DATWA is preempted because it conflicts with the workplace drug testing regulations promulgated by PHMSA of the DOT. (ECF No. 57 at 30–32); see 49 U.S.C. § 108(a). And MERC is correct that “[f]ederal regulations can have the same preemptive effect as federal statutes.” Gunter v. Farmers Ins., 736 F.3d 768, 771–72 (8th Cir. 2013). PHMSA regulations require random testing of covered employees for alcohol or drugs that might impair the employees’ performance of their duties, and establish the protocols and standards for random testing, collection, and testing of samples.⁷ See 49 C.F.R. pt. 199.

Both federal regulations and DATWA specifically address conflict preemption. Title 49 C.F.R. Part 199 preempts state laws in two scenarios: (1) where compliance with state and local requirements is impossible, and (2) where compliance with a state requirement is “an obstacle to the accomplishment and execution of any [DOT] requirement.” 49 C.F.R. § 199.9(a). DATWA specifies that it does not apply to, among others, employees where the work performed requires them to be subject to drug and alcohol testing pursuant to federal regulations that preempt state regulation of such testing. Minn. Stat. § 181.957, subdiv. 1. Under DATWA, then, the employers of employees subject to federal drug testing must comply with DATWA's protections for employees “to the extent” that they “are not inconsistent with or specifically preempted by the federal regulations.” Id., subdiv. 2. DATWA fits within a cooperative regulatory structure “because it expressly recognizes the supremacy of federal law by requiring employers of individuals subject to federal drug testing to follow DATWA only ‘to the extent’ it is ‘not inconsistent with’ what is required by federal law.”⁸ BHI, 2023 WL 5403796, at *14. The Court concludes that “DATWA ‘does not upend’ the federal government's ‘carefully calibrated regulatory scheme—it operates within it.’ ” Id. (citing R. J. Reynolds Tobacco Co. v. City of Edina, 60 F.4th 1170, 1178 (8th Cir. 2023)).

In its reply brief, MERC argues that DATWA's “ ‘one free bite’ rule” is incompatible with 49 C.F.R. Section 199.233. (ECF No. 72 at 6.) DATWA prohibits an employer from “discharg[ing]” a first-time offender-employee unless the employee is first offered the opportunity to participate in treatment and either refuses to participate or fails to successfully complete the program. Minn. Stat. § 181.953, subdiv. 10(b). MERC argues that this provision conflicts with Section 199.233, which provides that, with limited exceptions, “no operator shall permit any covered employee to perform covered functions if the employee has engaged in conduct prohibited by §§ 199.215 through 199.223 [sections of Subpart C–Alcohol Misuse Prevention Program] or an alcohol misuse rule of another DOT agency.”⁹

In considering conflict preemption, courts look to “the text and context of the law in question” and are “guided by the traditional tools of statutory interpretation.” Va. Uranium, 587 U.S. at 767. The plain text of “discharg[ing]” an employee and not permitting an employee “to perform covered functions” do not necessarily conflict. Arguably, an employer could comply with both laws by reassigning a first-time offender-employee to other (non-covered) functions rather than discharging the employee. Cf. BHI, 2023 WL 5403796, at *13 (“To be preempted, the state regulatory scheme must irreconcilably conflict with the federal scheme. A hypothetical or theoretical conflict is insufficient to warrant preemption.” (emphasis added) (citing Flying J, Inc. v. Van Hollen, 621 F.3d 658, 662 (7th Cir. 2010)). So MERC has not met its burden of proving conflict preemption.

III. LMRA Preemption

MERC also argues that Unbehaun's DATWA claim is completely preempted by federal law under Section 301 of LMRA, 29 U.S.C. § 185(a). “Complete preemption exists only where federal preemption is so strong that there is no such thing as a state-law claim.” Minnesota by Ellison v. Am. Petroleum Inst., 63 F.4th 703, 709 (8th Cir. 2023) (quotation marks and citation omitted).

Section 301 is one of the “very rare” applications of complete preemption. Id. at 710. But Section 301 does not preempt “every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement.” Allis–Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985). It “completely preempts only [1] claims founded directly on rights created by collective-bargaining agreements and [2] claims substantially dependent on analysis of a collective-bargaining agreement.” Johnson v. Humphreys, 949 F.3d 413, 416 (8th Cir. 2020) (citing Boldt v. N. States Power Co., 904 F.3d 586, 590 (8th Cir. 2018)). MERC contends that Unbehaun's DATWA claim is “substantially dependent” on analysis of the CBA.

A substantially dependent claim “requires the interpretation of some specific provision of a collective-bargaining agreement, including any documents incorporated by reference.” Boldt, 904 F.3d at 590 (cleaned up, citations omitted). An otherwise independent claim is not preempted if a CBA “need only be consulted during its adjudication.” Trs. of Twin City Bricklayers Fringe Ben. Funds v. Superior Waterproofing, Inc., 450 F.3d 324, 330 (8th Cir. 2006). “The crucial inquiry is whether resolution of a state-law claim depends upon the meaning of a CBA.” López Prater v. Trs. of Hamline Univ. of Minn., No. 23-CV-00505 (KMM/DJF), -- F. Supp. 3d --, 2023 WL 6050277, at *4 (D. Minn. Sept. 15, 2023) (cleaned up) (citing Miner v. Loc. # 373, 513 F.3d 854, 865 (8th Cir. 2008)).

To determine whether a claim requires interpreting the CBA, courts begin with what a plaintiff must prove; here, Unbehaun's DATWA claim. Johnson, 949 F.3d at 416. As noted above, Unbehaun's DATWA claim can be broken down into six subclaims, which the Court groups into three buckets for purpose of this analysis. First, he alleges that MERC's Drug Use Policy failed to meet the minimum notification requirements of DATWA. Second, he alleges that MERC's request that Unbehaun submit to a random drug test violated DATWA. Third, he alleges that MERC violated DATWA by: (1) failing to conduct a confirmatory test or notify him of his right to one; (2) failing to offer counseling or rehabilitation before discharge; and (3) disclosing Unbehaun's drug test results to a federal agency when not required by federal law. (ECF No. 64 at 17, 19; see Compl. ¶¶ 26–33.)

Having considered these subclaims, the Court finds that one is preempted and the rest are not.

The Policy. The first subclaim that MERC's Drug Use Policy fails to meet DATWA's minimum requirements is preempted. The policy is specifically incorporated into the CBA's section on MERC's drug and alcohol testing procedures. (ECF No. 61 at 24); see Halbach v. Great-W. Life & Annuity Ins., 561 F.3d 872, 876 (8th Cir. 2009) (“Where a writing refers to another document, that other document ․ is to be interpreted as part of the writing.” (cleaned up and citation omitted)). Because this claim challenges a policy incorporated by reference in the CBA, it is substantially dependent on an interpretation of the CBA. Boldt, 904 F.3d at 590. And, contrary to Unbehaun's assertion, this subclaim does not raise “purely factual questions” about either party's conduct. (ECF No. 64 at 18.) Because Unbehaun filed this action outside the six-month statute of limitations, it is untimely under LMRA. Boldt, 904 F.3d at 593; see 29 U.S.C. § 160(b). This subclaim is dismissed.

Random testing. The second subclaim—that MERC's request that Unbehaun submit to a random drug test violated DATWA—depends on whether Unbehaun's position is a safety-sensitive position. DATWA allows random testing of employees in safety-sensitive positions. Minn. Stat. § 181.951, subdiv. 4. The question, then, is whether this inquiry—whether Unbehaun is in a safety-sensitive position—depends on interpretation of the CBA or relies instead on other facts. It appears to this Court that it is the latter, and that it is a factual inquiry under Minnesota law, not the CBA.

The Eighth Circuit considered a similar issue in Williams v. National Football League, 582 F.3d 863 (8th Cir. 2009). There, Section 301 did not preempt football players’ DATWA claim because the claim was “predicated on Minnesota law, not the CBA or the Policy, and the claim [was] not dependent upon an interpretation of the CBA or the Policy.” Id. at 878. Put another way, the court did not need to “consult the Policy in order to resolve the Players’ DATWA claim. Rather, it would compare the facts and the procedure that the NFL actually followed with respect to its drug testing of the Players with DATWA's requirements for determining if the Players are entitled to prevail.” Id. at 876; see also Thompson v. Hibbing Taconite Holding Co., No. 08-CV-868 (JRT/RLE), 2008 WL 4737442, at *4 (D. Minn. Oct. 24, 2008) (“Allegations that [the defendant] violated such non-negotiable state law rights [under DATWA] do not require an interpretation of the CBA, and would not be preempted under the LMRA.”).

As was evident in Williams, courts require “an active and genuine dispute about a specific CBA term for the plaintiff's claim to ‘substantially depend’ upon interpreting the CBA.” Ratfield v. Delta Air Lines, Inc., No. 22-CV-2212 (KMM/DLM), 2023 WL 5178593, at *11 (D. Minn. Aug. 11, 2023) (first citing Boldt, 904 F.3d at 592 (dispute over whether plaintiff was “fit for duty”); and then citing Johnson, 949 F.3d at 417 (dispute over whether offense was one of “extreme seriousness”); and then citing Avina v. Union Pac. R.R. Co., 72 F.4th 839, 843–44 (8th Cir. 2023) (dispute over whether plaintiff “applied” for the promotion)); see also Sturge v. Nw. Airlines, Inc., 658 F.3d 832, 838 (8th Cir. 2011) (“Interpretation of a provision of a collective bargaining agreement entails the resolution of a dispute about the meaning of the provision.”).

MERC contends that this issue requires the Court to examine the designers’ “duties, the provisions of the CBA and the policy, the parties’ past practice under the policy, and application of the Management Rights clause of the CBA, which reserves to [MERC] the right to manage the employees.”¹⁰ (ECF No. 57 at 16.) MERC does not point to any provision in the CBA that addresses or incorporates by reference the designer job description or relates to alleged safety-sensitive nature of the position. The Court can find no actual and genuine dispute over a CBA term that needs to be resolved to resolve this subclaim. Thus, LMRA preemption does not apply, and the subclaim survives.

Notice of DATWA rights, confirmatory testing, rehabilitation opportunities, and disclosure of test results. Remaining subclaims are similarly focused on facts under Minnesota law rather than a dispute about the language of the CBA. None is preempted.

Unbehaun asserts MERC failed to notify him of certain rights under DATWA. MERC argues that these subclaims implicate the CBA.¹¹ The Court disagrees. These subclaims—that MERC did not inform Unbehaun of his rights to explain a positive test or obtain a retest, (Compl. ¶¶ 29–30),—raise questions of fact that do not require the Court to consider the CBA or MERC's Drug Use Policy, and so are not preempted under Section 301. See Williams, 582 F.3d at 878 (holding that a DATWA claim was not preempted where it was “not dependent upon an interpretation of the CBA or the Policy”).

As for the subclaim that Unbehaun never received a confirmatory test before termination, (Compl. ¶ 31), DATWA prohibits an employer from discharging an employee based on “a positive test result from an initial screening test that has not been verified by a confirmatory test.” Minn. Stat. § 181.953, subdiv. 10(a). The complaint alleges that MERC terminated Unbehaun “without a confirmatory test verifying the results of the initial drug screening.” (Compl. ¶ 31.) Taking the complaint allegations as true and making reasonable inferences in Unbehaun's favor, the Court reads the complaint as asserting that MERC violated DAWTA by terminating him before performing a second confirmatory test. MERC argues that Unbehaun's single drug test complied with DATWA because that test satisfied DATWA's definition of a “confirmatory test.” DATWA defines “[i]nitial screening test” as well as “[c]onfirmatory test” and “confirmatory retest” as a drug or alcohol test that uses a method of analysis allowed “under one of the programs listed in section 181.953, subdivision 1.” Minn. Stat. § 181.950, subdivs. 2, 8. Because DATWA bases the initial screening and the confirmatory test on the same standard, Section 181.953 appears to contemplate a second test. See Wehlage v. ING Bank, FSB, No. 07-CV-1852 (PJS/RLE), 2008 WL 4838718, at *3 n.1 (D. Minn. Nov. 5, 2008) (“A ‘confirmatory’ test is simply a second test done on the same specimen after a first ‘initial screening’ test has come back positive.” (citing Minn. Stat. § 181.953, subdiv. 10(a)). Whether Unbehaun received a second “confirmatory test” is a fact issue that does not require analysis of the CBA.

As to MERC's alleged unlawful failure to provide Unbehaun with an opportunity for rehabilitation or counseling after testing, (Compl. ¶ 32), this allegation raises a fact issue that does not require analysis of the CBA. The Court is not persuaded by MERC's assertion the CBA incorporates a policy allowing rehabilitation before testing through an employee assistance program (“EAP”). MERC acknowledges that federal regulations permit, but do not require, employers to offer rehabilitation after a positive test.¹² (ECF No. 72 at 10.)

Finally, as to MERC's alleged disclosure of Unbehaun's test results to a federal agency, (Compl. ¶ 33), MERC denies that it reported the test results and argues that if it had, it could do so under DATWA. (ECF No. 72 at 10–11.) These disputes do not substantially depend on interpreting the CBA, and thus they are not preempted by Section 301.

IV. Collateral Estoppel/Issue Preclusion

MERC contends that Unbehaun's DATWA claim is barred by issue preclusion (also known as collateral estoppel) by the arbitration award over Unbehaun's termination. Minnesota's doctrine of collateral estoppel “precludes a party from relitigating a legal or factual issue that was actually litigated in a prior proceeding and was essential to the judgment rendered.”¹³ Mandich v. Watters, 970 F.2d 462, 465 (8th Cir. 1992). Courts “do not apply collateral estoppel rigidly, but focus on whether an injustice would be worked upon the party against whom the estoppel is urged.” Mach v. Wells Concrete Prods. Co., 866 N.W.2d 921, 927 (Minn. 2015) (quotation marks and citation omitted).

For collateral estoppel to apply, MERC must prove that “(1) the issue was identical to one in a prior adjudication; (2) there was a final judgment on the merits; (3) the estopped party was a party or in privity with a party to the prior adjudication; and (4) the estopped party was given a full and fair opportunity to be heard on the adjudicated issue.” Peschong v. Child.’s Healthcare, 917 F.3d 656, 658 (8th Cir. 2019) (citation omitted). “A final arbitration award has the same preclusive effect as a prior judgment” under Minnesota law. Manion v. Nagin, 392 F.3d 294, 300 (8th Cir. 2004).

The focus here is on the first requirement—whether the arbitration addressed identical issues as this case.¹⁴ “The issue on which collateral estoppel is to be applied must be the same as that adjudicated in the prior action and it must have been necessary and essential to the resulting judgment in that action.” Hauschildt v. Beckingham, 686 N.W.2d 829, 837 (Minn. 2004). Unbehaun argues that the issues are not same because this case challenges whether MERC afforded him the rights to which he is entitled under DATWA, while the arbitration addressed his termination under the CBA. (ECF No. 64 at 22.) MERC's position is much narrower: it asks the Court to find that the arbitration award forecloses Unbehaun's argument that his job was not a safety-sensitive position under DATWA. (ECF No. 57 at 22.)

“The issue must have been distinctly contested and directly determined in the earlier adjudication for collateral estoppel to apply.” Hauschildt, 686 N.W.2d at 837–38. According to the arbitrator, the “primary fact” in dispute in the arbitration proceeding was whether MERC properly classified Unbehaun's designer position “as a safety-sensitive position as defined by DOT/PHMSA regulations.” (ECF No. 61-1 at 18.) The arbitration award quotes a PHMSA interpretation letter explaining that “the functions performed by employees subject to the [drug testing] regulations are operations, maintenance, and emergency response functions subject to parts 192, 193, and 195 that are performed on a pipeline,” and that “from the onset PHMSA specifically excluded the design function from DOT drug testing.”¹⁵ (ECF No. 61-1 at 14); see Control of Drug Use in Natural Gas, Liquefied Natural Gas, and Hazardous Liquid Pipeline Operations, 53 F.R. 47084-01 at 47087–9 (Nov. 21, 1988). The award repeatedly noted the Union's position that MERC violated DATWA, but it did not address whether the designer position is a safety-sensitive position under DATWA or adjudicate any DATWA claim. (ECF No. 61-1 at 11, 20, 24–25.) After considering the parties’ evidence and arguments, the CBA, and the parties’ practice, the arbitrator concluded that MERC's “designation of the designer position as a safety sensitive position is not contrary to federal law or regulation, and that its drug and alcohol testing program was properly applied to [Unbehaun].” (Id. at 28; see id. at 30 (noting that the parties “agreed to [the CBA's] terms and their practice that the designer position is a safety sensitive position subject to random testing”).)

The issue boils down to whether the arbitrator's determination that the designer position is a safety-sensitive position under federal regulations should apply to bar Unbehaun's argument that the position is not a safety-sensitive position under state law in DATWA. At this stage of the litigation, it is unclear whether a position considered safety-sensitive under DOT/PHMSA regulations necessarily satisfies the definition of “safety-sensitive position” under DATWA. Because MERC has not satisfied its burden to prove that the issue was “necessarily determined in the earlier action,” Mach, 866 N.W.2d at 927, the Court declines to apply collateral estoppel.¹⁶

CONCLUSION

Based on the above and on all the files, records, and proceedings herein, Defendant's Motion for Judgment on the Pleadings (ECF No. 55) is GRANTED IN PART and DENIED IN PART as follows:

(1) The claim that MERC's Alcohol and Other Drug Use Policy does not contain the minimum information required by DATWA is DISMISSED; and

(2) The claims that MERC violated DATWA by doing the following remain pending:

a. requiring Unbehaun to submit to a random drug test;

b. failing to inform Unbehaun in writing of his rights relating to testing;

c. discharging Unbehaun without a confirmatory test verifying his initial drug screening;

d. failing to offer Unbehaun counseling or rehabilitation before discharging him; and

e. disclosing Unbehaun's positive test result to a federal agency without a confirmatory test.

FOOTNOTES

1.   Page citations to the record reference ECF pagination.

2.   After his termination, Unbehaun registered under the Minnesota Medical Cannabis Program. (Compl. ¶ 24.)

3.   The Minnesota Legislature enacted cannabis-related amendments to DATWA in 2023. See 2023 Minn. Sess. Laws Serv. Ch. 63 (H.F. 100). Because MERC tested Unbehaun in March 2022, (Compl. ¶¶ 14–16), the Court analyzes the version of DATWA in effect when he was tested. See generally Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 837 (1990) (“[R]etroactivity is not favored in the law.”) (citation omitted).

4.   At the time Unbehaun was tested, DATWA defined a safety-sensitive position as “a job ․ in which an impairment caused by drug or alcohol usage would threaten the health or safety of any person.” Minn. Stat. § 181.950, subdiv. 13 (1991).

5.   MERC also submitted a job description, drug test results, excerpts from arbitration transcripts, and other documents that fall outside these parameters. (See ECF No. 61-2–61-7.) The Court denied MERC's request to file a summary judgment motion before the close of discovery. It will not effectively reverse this decision by considering these documents at this stage of the litigation.

6.   At times, MERC muddles its field preemption and conflict preemption arguments.

7.   “Covered employee ․ means a person who performs a covered function ․” 49 C.F.R. § 199.3. “Covered function means an operations, maintenance, or emergency-response function regulated by part 192, 193, or 195 of this chapter that is performed on a pipeline ․” Id. Under Part 192, a “covered task” on a pipeline facility is an activity that: “(1) Is performed on a pipeline facility; (2) Is an operations or maintenance task; (3) Is performed as a requirement of this part; and (4) Affects the operation or integrity of the pipeline.” 49 C.F.R. § 192.801.

8.   In Williams v. BHI Energy I Power Services, the court concluded that if there was a conflict between DATWA and the Atomic Energy Act (“AEA”), the employer “would not have to follow DATWA where it would be inconsistent with federal law” because of DATWA's provision on federal preemption. 2023 WL 5403796, at *13 (citing Minn. Stat. § 181.957). MERC tries to distinguish this case because there the plaintiff “conceded” that if she had sued a nuclear licensee rather than a contractor under the AEA, her DATWA claims would be preempted. Id. at *8 (noting that “this case is different” because plaintiff brought claims against “a contractor of a nuclear licensee rather than the nuclear licensee itself”). The Court is unpersuaded by a party's concession as to a hypothetical involving a different federal statute.

9.   On its face, Section 199.233 applies to alcohol use. Unbehaun tested positive for marijuana use, so it is not clear to the Court that Section 199.233 applies to Unbehaun.

10.   The CBA's Management Clause states in part that MERC “retains the full and unrestricted right to manage all procedures and methods of operation and the direction of the working forces covered herein, including the determination of the adequacy of supervision, the right to hire, suspend, discharge for proper cause, discipline, promote, demote, transfer, and lay off because of lack of work or for other proper reasons, shall be vested in [MERC].” (ECF No. 61 at 11.) MERC also “has the right to establish, modify, publish and enforce reasonable rules relating to discipline, operations, safety and any other business-related concerns.” (Id.) MERC does not point to any language in this clause implicated by the DATWA claims.

11.   MERC points to various provisions of the CBA: “All bargaining unit employees will be subject to the Company's Alcohol and Other Drug Use Policy ․ which includes reasonable suspicion, random and post-accident drug and alcohol testing ․” (ECF No. 61 at 24.) Those who refuse testing will be subject to severe disciplinary action, and that those found working “under the influence of any illegal drug” will be terminated. (Id.) The CBA defines “under the influence of an illegal drug” as “having a confirmed positive test result as defined under prescribed cut-off limits based on levels set for [DOT] guidelines ․” (Id.) MERC argues that he had notice because the Union—as the employees’ representative—acknowledged that policy by executing the CBA, and the CBA names Unbehaun as a member of the CBA bargaining committee, (id. at 28), reasonably inferring that he received notice of MERC's testing policy. But the subclaims do not assert that MERC failed to notify Unbehaun of MERC's testing policy; they contend that MERC failed to notify him of his rights under DATWA.

12.   MERC also asserts that Unbehaun made no effort to avail himself of the EAP offered in the CBA and MERC's Drug Use Policy before he was selected for testing. (ECF No. 72 at 10.) The Court declines to convert this motion to one for summary judgment and thus does not consider this evidence at this stage of the litigation.

13.   In diversity cases, collateral estoppel is a matter of state law. Jaramillo v. Burkhart, 999 F.2d 1241, 1243 (8th Cir. 1993) (citation omitted).

14.   Unbehaun does not dispute other three requirements for collateral estoppel.

15.   This letter responded to the Union's request for PHMSA's opinion on whether MERC's designer position was safety-sensitive. (ECF No. 61-1 at 13–15.) MERC objected to the arbitrator's consideration of the letter but was overruled. (Id. at 15.)

16.   MERC also contends that DATWA does not authorize a “do-over” civil action, and if it did, the Federal Arbitration Act preempts DATWA. At this stage of the litigation, the Court must take the complaint allegations as true. The complaint alleges a DATWA claim that appears independent of the arbitration proceeding, and the arbitration award did not rule on a DATWA claim, so the complaint does not allege a “do-over” action.

Nancy E. Brasel United States District Judge