Unpublished Disposition, 848 F.2d 1242 (9th Cir. 1988)

No. 86-4167.

United States Court of Appeals, Ninth Circuit.

Before WALLACE and REINHARDT, Circuit Judges, and CHARLES L. HARDY, District Judge^** .

Coleman brought a complaint pro se against the Prudential Insurance Company in Oregon state court. He claimed breach of contract, "estoppel", defamation, and tortious interference with contractual relations. Prudential removed to federal court. On cross-motions for summary judgment, the district court, in two separate orders, granted Prudential summary judgment on the defamation claim, held that the breach of contract and estoppel claims were preempted by federal law, and, reading Coleman's pro se complaint as stating a section 301 claim, 29 U.S.C. § 185(a), granted Prudential summary judgment on that claim as well. The one remaining claim, tortious interference with contract, was remanded to the state court. Coleman appeals pro se.¹ 

Coleman was a district agent for Prudential Insurance Company from 1974 to 1982. All Prudential district agents are covered by a collective bargaining agreement which is incorporated as part their employment contracts. One provision of the collective bargaining agreement prohibits agents from selling policies from companies other than Prudential (labeled "the Two Job rule").

In May 1980, Coleman purchased an independent insurance agency and began selling Safeco and Oregon Mutual policies as well as Prudential policies. He claimed his actions were given oral approval by a Prudential district agency manager and, alternatively, that, for various reasons, he was not prohibited from selling other companies' policies. In September 1981, Prudential put Coleman on probation for selling non-Prudential policies. He disputed the decision but did not file a grievance. The probation was eventually lifted, but Coleman resigned from Prudential in late 1983. In his complaint, Coleman characterized Prudential's action, putting him on probation, as a breach of the oral agreement, which, he alleges, modified the collective bargaining agreement as it applied to him. In the alternative, Coleman argues that because of the oral agreement, Prudential was estopped from enforcing the Two Job rule against him. He also asserts various other reasons why he should not have been disciplined for the activities he engaged in.

Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a), is the exclusive basis for challenging a breach of a collective bargaining agreement. Section 301 has been held to preempt state law in cases involving allegations of breach of a collective bargaining agreement. Teamsters v. Lucas Flour Co., 369 U.S. 95 (1962). State-law claims which are "inextricably intertwined" with or substantially dependent upon collective bargaining agreements are similarly preempted. Allis-Chambers Corp. v. Lueck, 471 U.S. 202, 213, 220 (1985). Coleman's breach of contract and estoppel claims are thus preempted, for they depend on his assertion that his employment contract had been modified orally, a modification which appears to be contrary to the terms of the collective bargaining agreement.

Coleman's pro se complaint can be read as stating a claim under section 301; however, that claim also fails. "A bargaining unit employee may not bring an action for breach of a collective bargaining agreement unless he has exhausted the contractual grievance procedures." Truex v. Garrett Freightlines, Inc., 784 F.2d 1347, 1353 (9th Cir. 1985). There is an exception to the exhaustion requirement where "the union has sole power under the contract to invoke the higher stages of the grievance procedure, and if ... the employee-plaintiff has been prevented from exhausting his contractual remedies by the union's wrongful refusal to process the grievance." Vaca v. Sipes, 386 U.S. 171, 185 (1967). On the cross-motions for summary judgment, the district court concluded that this exception did not apply to Coleman's claim. We agree; Coleman has not alleged that the union's action was arbitrary or in bad faith. Coleman makes one final argument. He contends that invoking the grievance procedure would be futile because the machinery has broken down and the union is powerless to use the process. We conclude that Coleman has not produced evidence sufficient to create a genuine issue of material fact on this point. Because the futility exception is inapplicable and Coleman failed to allege arbitrary or discriminatory action by the union, his section 301 claim must be dismissed for failure to exhaust the grievance procedure.

For the reasons stated above, we affirm the judgment of the district court.

AFFIRMED.