Opinion
Civil Action No. 02-656
February 26, 2003
ORDER AND REASONS
Before the Court is a Motion for Summary Judgment (Rec. Doc. 27) filed by defendants, The Prudential Insurance Company of America and Prudential Select Life Insurance Company of Americana (collectively "Prudential"). Plaintiff opposes the motion. The motion, set for hearing on February 12, 2003, is before the Court on briefs without oral argument. For the reasons that follow the motion is GRANTED.
Background
Plaintiff Timothy Watson ("Watson") was employed by Prudential as an agent from 1977 to 2001 when he was fired due to low production. Watson was paid commissions on a weekly basis based upon a "10 week roll." Under that payment scheme, a portion of Watson's weekly commissions was accumulated and held by Prudential during a nine week period. At the tenth week, full commission was paid, with the following weekly commissions being calculated as the average of the previous ten weeks of commissions. Plaintiff's Petition at ¶ IV. Upon termination from employment Watson demanded payment of the accumulated commissions but Prudential refused to pay.
Watson filed a grievance pursuant to the terms of the Collective Bargaining Agreement ("CBA") entered into between Prudential and his union. Prudential still refused payment. He then filed the instant lawsuit in state court, on behalf of himself and all others similarly situated, claiming that Prudential's refusal to pay was a breach of contract under Louisiana law, and that Prudential was liable for penalties and attorney's fees under La. R.S. 23:631 23:632.
Plaintiff did not move to certify a class.
Prudential removed the case to this Court and later moved to dismiss Watson's petition pursuant to Federal Rule of Civil Procedure 12(b)(6). The basis of that motion was that Watson's state law claims were preempted by section 301 of the Labor Relations Management Act. The Court denied that motion after noting that it was unclear from the state court petition as to the specific contract upon which Plaintiff was suing. Rec. Doc. 13, at 6. The Court noted, however, that if the Plaintiff were intending to sue based upon the provisions of the CBA then those claims would clearly be preempted by federal law. Id. Rather than dismiss the case so early in the litigation the Court chose to err on the side of allowing discovery to proceed with the issue of preemption to be later revisited upon a properly supported subsequent motion.
Prudential now moves for summary judgment arguing that the only contractual basis for Plaintiff's claims is the CBA, and that pursuant to the terms of the CBA, Watson is not entitled to any further commission payments.
Prudential's Motion
Prudential argues that the CBA is the sole agreement governing the issue of commission payments thereby preempting any state law causes of action for commissions due. Prudential argues that Plaintiff's wage payment claims are barred to the extent that they conflict with the CBA and that the plain language of the CBA confirms that Plaintiff is not entitled to further commission payments.
Defendant also raised an alternative argument that the CBA required Plaintiff to arbitrate his claims. In light of the Court's ruling on the preemption issue, the Court need not address whether arbitration was mandatory under the CBA.
In opposition, Plaintiff asserts that failure to pay him the earned commissions is grossly unfair and contrary to Louisiana law. Plaintiff does not attempt to explain how his state law claims escape preemption in light of the CBA and applicable federal law.
Discussion
Section 301 of the LMRA provides in part:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.29 U.S.C. § 185(a).
Section 301 preempts state causes of action that allege a violation of a collective bargaining agreement affecting interstate commerce. Branson v. Greyhound Lines, Inc., 126 F.3d 747, 753 (5th Cir. 1997) (citing Allis-Chambers Corp., 471 U.S. at 210, 105 S.Ct. at 1911; Eitmann v. New Orleans Pub. Serv., Inc., 730 F.2d 359 (5th Cir. 1984)). When resolution of a state law claim substantially depends on the meaning of a collective bargaining agreement courts must treat the claim as one made under section 301 or dismiss the claim as preempted by federal law. Id. (citing Allis-Chambers v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 1916, 85 L.Ed.2d 206 (1985); Thomas v. LTV Corp., 39 F.3d 611 (5th Cir. 1994). Preemption occurs when a decision on the state claim is inextricably intertwined with consideration of the terms of the labor contract or when the application of state law to a dispute requires interpretation of the collective bargaining agreement. Thomas v. LTV Corp. 39 F.3d 611, 616 (5th Cir. 1994) (citing Lingle v. Norge Div. Magic Chef, Inc., 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1968); Allis-Chambers, 471 U.S. at 213, 105 S.Ct. at 1912). The preemptive effect of section 301 applies to causes of action arising in both contract and tort. Id. (citing United Steelworkers v. Rawson, 495 U.S. 362, 110 S.Ct. 1904, 109 L.Ed.2d 362 (1990); Allis-Chambers Corp., 471 U.S. at 210-11, 105 S.Ct. at 1910-11)
Section 301 does not, however, preempt every state law claim between the parties to a collective bargaining agreement, nor does it preempt claims only tangentially related to the agreement. Branson, 126 F.3d at 753 (citing Lingle, 486 U.S. at 409-11, 108 S.Ct. at 1883-85); Allis-Chambers, 471 U.S. at 211-12, 105 S.Ct. at 1911-12,; Thomas, 39 F.3d at 617). Although claims for breach of the collective bargaining agreement itself are automatically preempted, claims arising out the breach of other contracts between plaintiff and the employer, claims whose resolution do not involve an interpretation of the collective bargaining agreement, are not ordinarily subject to preemption. See Parham v. Carrier Corp., 9 F.3d 383, 390 (5th Cir. 1993). Thus, in order to determine whether a given state law contract claim is preempted by federal law, the court will necessarily consider the specific contract upon which plaintiff bases his claim as well as the defenses the employer is asserting. See Branson, 126 F.3d at 754.
It is undisputed that the terms and conditions of Plaintiff's employment with Prudential were governed by the CBA. Section A of Article 4 of the CBA outlines the Accelerated Compensation Plan ("ACP") or 10 week commission roll plan, (MSJ Exhibit B, at 3) Section I governs termination settlements (MSJ Exhibit B, at 15) Parts 1 2 of Section I explain how commission credits are disbursed when an individual's status as a Prudential Representative terminates due to either retirement, death, long term disability, military service, or transfer to certain other Prudential positions. (MSJ Exhibit B, at 15). However, Part 3 of Section I states that "[i]f the Prudential Representative's account is terminated for any other reason other than those listed in subsections 1. and 2. above, no settlement shall be made ." Id. (emphasis added).
The CBA clearly addresses when commission payments are due upon termination of employment. Because any recovery under state law would conflict with the express provisions of the CBA, any such state law claims are clearly preempted under federal law. Plaintiff's suit must be treated as a claim that Prudential breached the CPA.
However, under the express terms of the CPA Plaintiff is owed no further commissions. Prudential terminated Plaintiff for poor job performance which is not one of circumstances of cessation of employment that would entitle Watson to additional payments. Federal law will not allow Plaintiff to circumvent the bargained for terms of the CPA by attempting to recover additional commissions by relying on state law. Although Plaintiff now argues that the terms of the CBA are unfair, he was a union member and his union's authorized representatives negotiated the CBA, including the forfeiture of commissions, with his employer. The Court can only assume that Plaintiff's union had the best interest of its members in mind when agreeing to such a forfeiture and that such a provision was made part of the CBA in light of some other type of consideration that the union found to be more important. The Court cannot now second guess what the parties to the CBA clearly agreed to.
Accordingly;
IT IS ORDERED that Prudential's Motion for Summary Judgment (Rec. Doc. 27) should be and is hereby GRANTED. Plaintiff's suit is DISMISSED WITH PREJUDICE.