Associated Builders & Contractors, Inc., Golden Gate Chapter v. Local 302 International Brotherhood of Electrical Workers Local 180 International Brotherhood of Electrical Workers Local 332 International Brotherhood of Electrical Workers Local 340 Ibew Local 442 Ibew Local 551 Ibew Local 591 Ibew Local 595 Ibew Local 617 Ibew Local 684 Ibew
Docket: 95-16202
Court: Court of Appeals for the Ninth Circuit; May 12, 1997; Federal Appellate Court
Associated Builders and Contractors, Inc. Golden Gate Chapter (ABC), a non-union construction contractors organization, filed a lawsuit against multiple local unions of the International Brotherhood of Electrical Workers (IBEW), alleging that the unions' job targeting programs (JTPs) violate California law. These programs involve collecting wages from workers on public works projects and redistributing them to union-signatory contractors to enable competitive bidding. ABC asserted that the JTPs violate California's prevailing wage laws and constitute unfair competition under § 17200 of the California Business and Professions Code, claiming they allow contractors to evade mandated wage payments.
The IBEW unions removed the case to federal court, arguing that ABC's claims were preempted by § 301 of the Labor Management Relations Act (LMRA) due to the necessity of interpreting job targeting agreements. The district court denied ABC's motion to remand, ruling that the case involved labor agreements and was thus preempted. The unions subsequently moved for judgment on the pleadings, which the court granted, dismissing ABC's complaint with prejudice and denying ABC's request to amend its complaint.
ABC appealed the district court's jurisdictional ruling and the dismissal. The appeals court confirmed jurisdiction under 29 U.S.C. § 185(a) and 28 U.S.C. §§ 1331 and 1337, and acknowledged the appeal as a final order under 28 U.S.C. § 1291.
Subject matter jurisdiction is a legal issue subject to de novo review, as established in relevant case law. A defendant can typically remove a case to federal court only if it could have initially been brought there, in accordance with 28 U.S.C. § 1441(a). Under the well-pleaded complaint rule, federal jurisdiction is established only when a federal question appears on the plaintiff's complaint, while federal defenses do not grant federal jurisdiction. However, the complete preemption doctrine serves as an exception; it applies when a federal statute's preemptive scope effectively transforms a state law complaint into a federal claim. This doctrine holds that if Congress has fully occupied a legislative area, any state law claims related to that area are preempted, making federal remedies exclusive.
Specifically, under § 301 of the Labor Management Relations Act (LMRA), federal law exclusively governs breaches of collective bargaining agreements, preempting any state law claims that involve such agreements or their terms. Although § 301's language refers to contract violations, it broadly encompasses state-law actions requiring interpretation of labor agreements. Claims that substantially depend on analyzing the terms of labor contracts must be treated as § 301 claims or dismissed as preempted. Many lawsuits under § 301 do not directly assert breaches of collective bargaining agreements but are still preempted due to their connection to those agreements, as argued by the IBEW unions regarding ABC's state-law claims, which necessitate interpretation of labor contracts.
§ 301 preemption does not automatically apply to every claim involving a labor-management agreement. The Supreme Court has clarified that claims requiring mere reference to a collective bargaining agreement may not be preempted if there is no dispute over the meaning of its terms. In the case at hand, ABC's state-law claims do not concern the interpretation or breach of the job targeting agreements; instead, they assert that unions complied with these agreements while violating state law. The only issue is the legality of the agreements under state law. Extending § 301 preemption to situations questioning the legality of labor contracts would allow parties to shield unlawful behavior behind labor agreements, contrary to congressional intent. Therefore, not every employment dispute linked to a collective-bargaining agreement is preempted by § 301.
The court concluded that ABC's claims could be resolved without interpreting the agreements, rendering them independent of the agreements for § 301 preemption purposes. Consequently, the district court lacked subject matter jurisdiction, leading to a vacated decision and a remand for state court proceedings. The other issues raised by ABC were not addressed due to this jurisdictional ruling.
The District of Columbia Circuit upheld a ruling that payroll deductions for Job Targeting Programs (JTPs) violated regulations tied to the Davis-Bacon Act, as the withheld funds were not classified as "membership dues." ABC raised this issue for the first time on appeal, rendering it improperly before the court. California Labor Code §§ 1778 and 1779 outline criminal offenses related to wage misappropriation and the collection of fees for public work placements, but no criminal charges were pursued against the unions involved in the JTPs. The court determined that it need not address ABC's state-law claims due to the district court's lack of subject matter jurisdiction. ABC appealed the denial of its motion to remand to state court; however, the IBEW Unions contended that ABC waived this right by not seeking interlocutory review. The Supreme Court later invalidated this waiver theory, allowing ABC to preserve the issue on appeal without prior interlocutory review. The correctness of the remand denial hinges on whether § 301 preemption was correctly applied, as the district court's jurisdiction relied on this determination. Section 301 allows lawsuits for contract violations between employers and labor organizations to be brought in any relevant U.S. district court. ABC contended that the job targeting agreements were not "contracts" under § 301, but the court declined to rule on this as ABC's state-law claims did not require interpretation of those agreements.
ABC contends that § 301 preemption is inapplicable because it is neither a party to the contracts involved nor classified as an employer or labor organization. However, established precedent indicates that parties in a § 301 action need not be employers or labor organizations, as the term 'between' in § 301(a) pertains to contracts rather than the parties involved in litigation. The case Painting, Decorating Contractors Ass'n v. Painters, Decorators Joint Comm. supports this by affirming jurisdiction over a case involving multiple employer groups and labor organizations regarding a breach of a collective bargaining agreement. ABC's status as a non-party to the agreement does not negate the applicability of § 301. The ruling does not assess the merits of ABC's state-law claims, nor does it prevent the appellees from asserting federal labor law preemption in state court. Relevant cases, including San Diego Bldg. Trades Council v. Garmon and Lodge 76, Int'l Ass'n of Machinists v. Wisconsin Employment Relations Comm'n, emphasize that activities arguably governed by the National Labor Relations Act necessitate deference to the National Labor Relations Board. These matters are to be resolved by the original state court.
