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Pennsylvania Nurses Ass'n v. Pennsylvania State Educ. Ass'n

July 25, 1996
















On Appeal from the United States District Court for the Middle District of Pennsylvania

(District Court No. 94-cv-00880) Argued May 20, 1996

Before: SLOVITER, Chief Judge, SAROKIN and ROSENN, Circuit Judges

SLOVITER, Chief Judge.

(Opinion Filed July 25, l996)


The contesting parties in this case are two labor organizations who vied for the right to represent the nurses at eight health-care facilities in Pennsylvania and Delaware. Pennsylvania Nurses Association (PNA), the organization that had previously been the bargaining agent, filed an action asserting eleven state-law tort claims against the Pennsylvania State Education Association and six individuals associated with it, four of whom had previously been PNA's representatives (collectively referred to as "PSEA"). The district court entered judgment on the pleadings for PSEA on nine of the claims on the ground that they were preempted by the National Labor Relations Act. It rejected PSEA's contention of preemption on the remaining claims and remanded them to the state court. PNA appeals the district court order to the extent that it entered judgment for PSEA. PSEA, as cross-appellant, appeals from the disposition of the two surviving claims.


Because this appeal arises from the district court's grant of a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), we accept as true the well-pleaded allegations in the complaint and draw all inferences therefrom in favor of PNA. United States v. City of Philadelphia, 644 F.2d 187, 190 (3d Cir. 1980). Accordingly, we set forth the facts as PNA alleges them.

PNA is both a professional association of nurses and a nurses' labor union; PSEA is a school employees' labor union. Before June 30, 1993, PNA represented approximately 9,000 nurses through sixty local bargaining units in Pennsylvania and Delaware. During that period, defendants Debra Ferguson, Richard Lewis, Jeffrey Lewis, and Karen Schrader worked for PNA as labor representatives. Sometime thereafter, these representatives decided that they no longer wanted to work for PNA and would be more likely to secure positions with another union if they could bring along with them the local PNA units they represented. Debra Ferguson, in particular, sought a position with PSEA, offering to bring with her as many of PNA's local units as possible. She accordingly developed a plan to work with PSEA to enlist the help of the other defendant PNA representatives in shifting PNA local units and their leadership away from PNA and toward PSEA.

PNA claims that to further the conspiracy that it alleges, PSEA sought authorization from its Board of Directors to allow it to represent nurses as well as teachers; met with the executive and negotiating committees of various PNA local units along with the labor representatives, who were still employees of PNA, to persuade them to disassociate from PNA and join PSEA; provided Debra Ferguson and the other named PNA representatives with PSEA propaganda, election cards, and other materials to aid them in inducing PNA local units to join PSEA; held meetings with PNA local memberships and, with the defendant PNA representatives, spoke in favor of affiliating with PSEA instead of PNA; "produced and promulgated false, malicious, and defamatory propaganda designed to destroy the reputation of PNA," App. at 22; offered employment with PSEA as an incentive to Debra Ferguson and the other defendant labor representatives to assist in affiliating the PNA local units with PSEA; and sought to induce other PNA labor representatives to leave PNA and become PSEA employees and to bring their local PNA units with them.

PNA also contends that the individual defendants who were its former labor representatives failed to negotiate in good faith successor collective bargaining agreements on behalf of their PNA units, which enabled PSEA's subsequent efforts to represent the units after the agreements expired; disparaged the reputation of PNA and its officials to persuade unit members to disassociate from the union; solicited unit members to sign election cards for PSEA representation; and engaged in disloyal activities including the creation and distribution of propaganda promoting PSEA at the expense of PNA.

PNA originally filed its complaint in the Court of Common Pleas of Dauphin County, setting forth the following eleven state-law claims in separate counts against one or more of the defendants: I) breach of fiduciary duty, II) fraud and deceit, III) defamation, IV) commercial disparagement, V) unfair competition, VI) vicarious liability, VII) interference with present contractual relations (between PNA and its former representatives), VIII) interference with present and prospective contractual relations (between PNA and its local units), IX) interference with present and prospective contractual relations (between PNA and health care employers), X) aiding and abetting, and XI) conspiracy. PNA sought compensatory and punitive damages.

PSEA removed the case to federal court on the ground that some of the claims were preempted by the National Labor Relations Act (NLRA), 29 U.S.C. Section(s) 151-169, and/or the Labor Management Relations Act (LMRA), 29 U.S.C. Section(s) 141-187, and moved for judgment on the pleadings on that basis. In an order dated June 6, 1995, and amended July 28, 1995, the district court granted PSEA's motion, dismissing counts II, IV, V, VI, VII, VIII, IX, X and XI to the extent that they were based on conduct covered by the NLRA, and denied the motion as to counts I (breach of fiduciary duty) and III (defamation), concluding that these claims were not preempted. The court remanded the case to the state court for disposition of the two remaining claims. PNA appealed. PSEA cross-appealed and filed a petition for writ of mandamus as an alternative.

PNA has not challenged our jurisdiction over PSEA's cross-appeal, but we must consider the jurisdictional question even where the parties are prepared to concede it. Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986); PAS v. Travelers Ins. Co., 7 F.3d 349, 352 (3d Cir. 1993). 28 U.S.C. Section(s) 1447(d) states that "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." This bar to review, however, has been held to apply only to remand orders issued pursuant to 28 U.S.C. 1447(c), that is, where the case was remanded due to a defect in the removal procedures or for lack of subject matter jurisdiction. Quackenbush v. Allstate Ins. Co., 116 S. Ct. 1712, 1718 (1996); Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 346 (1976); Trans Penn Wax Corp. v. McCandless, 50 F.3d 217, 222 (3d Cir. 1995); Balazik v. County of Dauphin, 44 F.3d 209, 212-13 (3d Cir. 1995). Here, the district court relied upon the discretionary ground stated in 28 U.S.C. Section(s) 1367(c)(3), which permits a district court to decline to exercise supplemental jurisdiction over state claims where it has dismissed all claims over which it has original jurisdiction. Accordingly, 28 U.S.C. Section(s) 1447(d) is inapplicable. See Trans Penn Wax, 50 F.3d at 224-25; PAS, 7 F.3d at 352.

Moreover, because the district court's remand order divested the federal court of all control over the action, our cases suggest that we would have jurisdiction under 28 U.S.C. Section(s) 1291. See Powers v. Southland Corp., 4 F.3d 223, 231 n.9 (3d Cir. 1993); Foster v. Chesapeake Ins. Co., 933 F.2d 1207, 1211 n.6 (3d Cir.), cert. denied, 502 U.S. 908 (1991); Carteret Sav. Bank, FA v. Shushan, 919 F.2d 225, 228 n.7 (3d Cir. 1990); McLaughlin v. ARCO Polymers, Inc., 721 F.2d 426, 428 n.1 (3d Cir. 1983). The recent decision in Quackenbush supports this view. See 116 S. Ct. at 1719. In light of our decision that we have appellate jurisdiction, the petition for mandamus filed in this case is moot.


A. NLRA Preemption

It is well established that state-law claims are presumptively preempted by the NLRA when they concern conduct that is actually or arguably either protected or prohibited by the NLRA, Belknap, Inc. v. Hale, 463 U.S. 491, 498 (1983), and by the LMRA when such claims rely upon an interpretation of a collective bargaining agreement, Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 405-06 (1988).

The general framework for determining whether particular state-law claims are preempted by the NLRA remains that initially established by the Supreme Court in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 243-45 (1959), and more recently summarized as follows:

[S]tate regulations and causes of action are presumptively preempted if they concern conduct that is actually or arguably either prohibited or protected by the Act. The state regulation or cause of action may, however, be sustained if the behavior to be regulated is behavior that is of only peripheral concern to the federal law or touches interests deeply rooted in local feeling and responsibility. In such cases, the State's interest in controlling or remedying the effects of the conduct is balanced against both the interference with the National Labor Relations Board's ability to adjudicate controversies committed to it by the Act, and the risk that the State will sanction conduct that the Act protects. Belknap, 463 U.S. at 498-99 (citations omitted) (emphasis added); see also Local 926, Int'l Union of Operating Eng'rs v. Jones, 460 U.S. 669, 676 (1983).

Either of the polarities of the Garmon analysis, arguable protection or arguable prohibition, will ordinarily suffice. In this case, the district court examined both protection and prohibition under the NLRA in ruling on PSEA's preemption claim. The court rejected PSEA's argument that the conduct alleged was protected by the NLRA, concluding that "section 7 does not protect a labor union's conduct in secretly enlisting another union's labor representative in a scheme to defraud the latter union of its right to represent various groups of workers." PSEA does not challenge that holding on appeal.

On the other hand, when the district court focused on the prohibition prong of the Garmon/Belknap formulation it concluded that the nine claims set forth in Counts II and IV through XI were preempted because they were arguably prohibited by two provisions of the NLRA, primarily section 8(b)(1)(A) but also section 9. Section 8(b)(1)(A) makes it "an unfair labor practice for a labor organization or its agents . . . (1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in [section 7 of the NLRA]." See 29 U.S.C. 158(b).

Section 7 protects employees' rights to organize and, inter alia, to choose their bargaining agents. *fn1

PNA argues that the conduct it alleges PSEA and the individual defendants engaged in was directed at PNA, rather than the nurses, and therefore the conduct must necessarily have been unrelated to employees' organizational rights, which is the concern of section 7. We do not agree. Conduct which undermines the union representing a unit of employees, and thereby induces those employees to change their affiliation, arguably "constrains or coerces" those employees in their ability to exercise their free choice of an exclusive representative.

Indeed, in one of the various branches of the PNA/PSEA controversy, PNA itself filed an unfair labor practice charge with the NLRB, complaining that PSEA engaged in activities similar to those it asserts here at the Polyclinic Medical Center which interfered with PNA's collective bargaining agreement with that employer. The NLRB ruled that the conduct of both PSEA and the employer violated section 8 of the NLRA. See Polyclinic Medical Ctr., 315 N.L.R.B. 1257 (1995), enforced sub nom. Pennsylvania State Educ. Ass'n v. NLRB, 79 F.3d 139 (D.C. Cir. 1996). Both PNA's complaint and the Board's ruling illustrate the proposition that action targeted at a rival union may restrain employees in the exercise of their section 7 rights. Thus, even if the conduct here was directed at PNA, as it contends, rather than at the nurse-employees, it does not follow that section 8(b)(1) rights were not impacted.

Section 9 of the NLRA, the other provision the district court referred to as supporting its determination of preemption, gives the NLRB jurisdiction over selection of the union bargaining representative. As part of that responsibility, the NLRB has the authority to resolve disputes among competing unions and take action needed to ensure the workers' freedom of choice, including, if necessary, invalidation of an election. See NLRB v. Savair Mfg. Co., 414 U.S. 270, 276-79 (1974); Weyerhaeuser Co., 247 N.L.R.B. 978, 978 n.2 (1980). Inasmuch as the conduct of which PNA complains arises, in essence, from a dispute or series of disputes between competing unions, each of whom sought to be the employees' exclusive representative, we agree with the district court that the conduct alleged may also have affected rights under section 9 as well as section 8(b)(1).

Notably, for preemption purposes a court need not decide whether the conduct alleged would be deemed to be prohibited by the NLRA, since it is enough that the conduct upon which the state causes of action are based is "arguably" prohibited. As the Court stated in Garmon, it is for the NLRB, not the courts, to decide whether the particular controversy falls within the scope of section 7 or 8 of the NLRA:

At times it has not been clear whether the particular activity regulated by the States was governed by Section(s) 7 or Section(s) 8 or was, perhaps, outside both these sections. But courts are not primary tribunals to adjudicate such issues. It is essential to the administration of the Act that these determinations be left in the first instance to the National Labor Relations Board.

. . . .

. . . In the absence of the Board's clear determination that an activity is neither protected nor prohibited or of compelling precedent applied to essentially undisputed facts, it is not for this Court to decide whether such activities are subject to state jurisdiction. Garmon, 359 U.S. at 244-46.

PNA suggests that even if the conduct alleged is arguably prohibited by the NLRA, as the district court found, this is not a case in which preemption should be applied. The Supreme Court's cases have referred to two circumstances in which state law is not preempted, even if the conduct at issue is arguably protected or prohibited by the NLRA. Those exceptions apply if the alleged conduct is of only "peripheral concern" to the NLRA, or "touches on interests ...

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