Unpublished Disposition, 852 F.2d 571 (9th Cir. 1988)

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U.S. Court of Appeals for the Ninth Circuit - 852 F.2d 571 (9th Cir. 1988)

Laura J. DESHERLIA, Plaintiff-Appellant,v.ALPHA BETA COMPANY and Joe Banando, Defendants-Appellees.

No. 87-6045.

United States Court of Appeals, Ninth Circuit.

Submitted April 29, 1988.* Decided July 7, 1988.

Before JAMES R. BROWNING, HUG and BEEZER, Circuit Judges.


MEMORANDUM** 

Laura J. DeSherlia appeals the district court's grant of summary judgment in favor of Alpha Beta Co. and Joe Banando, an Alpha Beta manager, in her suit for breach of a settlement agreement reached after she filed a grievance. Because we conclude (1) that section 301 of the Labor Management and Relations Act (LMRA), 29 U.S.C. § 185(a), preempts her state tort cause of action for intentional infliction of emotional distress and (2) that DeSherlia's action is time-barred, we affirm.

FACTS

DeSherlia was hired by Alpha Beta in 1978 as a part-time checker for its Lennox store. DeSherlia is a member of the United Food and Commercial Workers Union, Local 905 (Union), which has a collective-bargaining agreement with Alpha Beta. During all relevant times, DeSherlia's employment was covered by the collective-bargaining agreement. The agreement provided that all disputes and controversies of any kind or character existing between the parties be settled by grievance and arbitration and that the ultimate resolution of any such grievance would be final and binding on the parties.

In 1981, DeSherlia was transferred to Store No. 239 in Lomita. She became General Merchandise Department Head of the Lomita store. On October 1, 1984, DeSherlia's supervisor, Joe Banando, terminated DeSherlia's employment contract because she had allegedly violated company procedure regarding the handling of office mail and because her performance was not acceptable. DeSherlia contends that she was terminated in retaliation for her refusal to submit to Banando's sexual harassment.

Pursuant to procedures set forth in the collective-bargaining agreement, DeSherlia filed a grievance with the Union regarding her termination. Negotiations were subsequently held at an arbitration meeting between DeSherlia, the Union, and Alpha Beta. The grievance was settled on April 18, 1985. The terms of the written settlement and release executed by DeSherlia, the Union, and Alpha Beta, required that, inter alia, DeSherlia would be reinstated to employment with full seniority effective April 22, 1985, and that she would release Alpha Beta from all claims, demands, and liabilities of any kind up to the date of the settlement agreement. The settlement agreement did not contain any condition that Alpha Beta would not reinstate DeSherlia in Store No. 239, where Banando worked. DeSherlia nonetheless contends that Alpha Beta reassured her at the settlement agreement meeting that she would not be reinstated in Store No. 239. On May 13, 1985, she returned to Store No. 239, where she worked until June 24, 1985 before being transferred to another Alpha Beta Store.

On February 28, 1986, DeSherlia filed a complaint for unlawful employment discrimination pursuant to Cal.Gov't Code Sec. 12940(a), 42 U.S.C. § 1981, and 42 U.S.C. § 2000e (Title VII) in California State Superior Court. On April 24, 1986, Alpha Beta removed the action to federal district court. DeSherlia sought leave to amend her complaint to state five causes of action: (1) employment discrimination under Cal.Gov't Code Sec. 12940(a); (2) breach of contract, i.e., that Alpha Beta breached the settlement and release agreement; (3) breach of the covenant of good faith and fair dealing by violating the settlement agreement; (4) fraud and deceit in the execution of the settlement agreement; and (5) intentional infliction of emotional distress by assigning DeSherlia to work under Banando in violation of the settlement agreement. The district court granted the leave to amend, but remanded the first cause of action for employment discrimination under Cal.Gov't Code Sec. 12940(a) to state court. The court retained jurisdiction over the remaining four causes of action.

On May 12, 1987, the district court granted Alpha Beta's motion for summary judgment. The district court reasoned that the four causes of action "are based on the alleged breach of an agreement settling a union grievance pursuant to a collective-bargaining agreement and are therefore preempted by section 301 of the [LMRA]." The district court further concluded that the applicable six-month statute of limitations for section 301 claims barred DeSherlia's action. DeSherlia timely appeals only the issue of whether her intentional infliction of emotional distress claim is preempted by section 301.

ANALYSIS

We review the district court's grant of summary judgment de novo. Scott Machinists Automotive Trades Dist. Lodge, 827 F.2d 589, 591 (9th Cir. 1987); Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir. 1986). Whether preemption was proper is a question of subject-matter jurisdiction that we also review de novo. Stallcop v. Kaiser Foundation Hosp., 820 F.2d 1044, 1048 (9th Cir.), cert. denied, 108 S. Ct. 504 (1987).

DeSherlia maintains that section 301 of the LMRA does not preempt her state tort cause of action for intentional infliction of emotional distress. She contends that adjudication of her emotional distress claim does not require interpretation of the collective-bargaining agreement. Accordingly, she argues that the district court erred in not remanding her emotional distress claim to state court. We disagree.

Section 301 provides:

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ... may be brought in any district court of the United States having jurisdiction of the parties....

29 U.S.C. § 185(a). The preemptive force of section 301 "is so 'extraordinary' that it 'converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.' " Caterpillar, Inc. v. Williams, 107 S. Ct. 2425, 2430 (1987) (quoting Metropolitan Life Ins. Co. v. Taylor, 107 S. Ct. 1542, 1547 (1987)); see also Utility Workers of America v. Souther California Edison, Nos. 87-5674, 87-5702, slip op. 5133, 5137 (9th Cir. May 4, 1988).

To determine preemption of a tort claim, our inquiry is whether the state tort action as applied here "confers nonnegotiable state-law rights on employers or employees independent of any right established by contract, or, instead, whether evaluation of the tort claim is inextricably intertwined with consideration of the terms of the labor contract." Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213 (1985). In Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. ----, 56 U.S.L.W. 4512 (1988), the Supreme Court held that "an application of state law is preempted by Sec. 301 of the [LMRA] only if such application requires the interpretation of a collective-bargaining agreement." Id. at 4515. The Court has concluded that "where resolution of state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a section 301 claim, or dismissed as pre-empted by federal labor-contract law." Allis-Chalmers, 471 U.S. at 220 (citation omitted).1 

DeSherlia alleges that Alpha Beta's outrageous conduct caused her to suffer emotional distress. Her claim essentially stems from Alpha Beta's action in reinstating her to work in Store No. 239 under Banando after resolution of the grievance she filed with the Union. DeSherlia maintains that her placement violated the settlement and release agreement executed by the Union, Alpha Beta, and herself. The settlement agreement was reached pursuant to the collective-bargaining agreement's grievance procedures. Whether Alpha Beta carried out the terms of the grievance settlement agreement tortiously would involve examination and interpretation of the settlement terms. Any ambiguities regarding DeSherlia's agreement to be reinstated into her former position, a position which is covered by the collective-bargaining agreement, would necessarily entail interpretation of terms and conditions in the labor contract. Such an inquiry would encompass the grievance and negotiation process that led to the settlement agreement. As a result, the outrageousness or reasonableness of Alpha Beta's conduct in these circumstances can only be ascertained by reference to the grievance settlement agreement and the grievance procedures under the collective-bargaining agreement.

Evaluation of DeSherlia's emotional distress claim resulting from the alleged breach of the grievance settlement agreement is inextricably intertwined with rights created by the collective-bargaining agreement and its grievance procedures.2  Because we conclude that DeSherlia's state tort claim cannot be resolved without interpreting the grievance settlement agreement and the collective-bargaining agreement, we cannot say that her claim is a nonnegotiable independent state-law right for section 301 preemption purposes. See Lingle, 56 U.S.L.W. at 4515; see also Allis-Chalmers, 471 U.S. at 213.3  As the Supreme Court recently reasoned: "Section 301 governs claims founded on rights created by collective-bargaining agreements, and also claims 'substantially dependent on analysis of a collective-bargaining agreement.' " Lingle, 56 U.S.L.W. at 4515 n. 10 (citation omitted). Accordingly, we affirm the district court's conclusion that DeSherlia's claim is preempted by section 301.4 

DeSherlia contends that the statute of limitations applicable to section 301 actions does not bar her claim. In DelCostello v. International Bhd. of Teamsters, 462 U.S. 151 (1983), the Supreme Court held that a six-month statute of limitations applies to section 301 claims against unions or employers. Id. at 155. To satisfy the statute of limitations, a plaintiff must not only file a suit, but also must serve the defendants within the six-month period. See Gallon v. Levin Metals Corp., 779 F.2d 1439, 1441 (9th Cir. 1986).

DeSherlia's claim is that Alpha Beta's breach of the settlement agreement--returning her to work at the same store under Banando--caused her to suffer emotional distress. The limitations period for DeSherlia's section 301 claim began to run when she knew or had reason to know of Alpha Beta's alleged breach of the settlement agreement. See Carter, 765 F.2d at 919 n. 2; McNaughton v. Dillingham Corp., 707 F.2d 1042, 1047 (9th Cir. 1983), cert. denied, 469 U.S. 916 (1984). The alleged breach occurred at the latest, on May 13, 1985, when she was reinstated to Store No. 239. DeSherlia only worked at Store No. 239 from May 13, 1985 through June 24, 1985, when she was transferred to another store. She did not file her original complaint until February 28, 1986, almost nine months after her reinstatement. Moreover, she did not serve defendants until March 31, 1986, ten months after her reinstatement and over nine months after her transfer from Store No. 239. Accordingly, the district court properly concluded that DeSherlia had failed to file her action within the statute of limitations period of six months from the date Alpha Beta allegedly breached the settlement agreement. Accordingly, we affirm the district court's conclusion that DeSherlia's claim was time barred.

AFFIRMED.

 *

The panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a); Ninth Circuit Rule 34-4

 **

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3

 1

We have consistently applied the Allis-Chalmers standard to emotional distress claims. See Hyles v. Mensing, No. 87-1858, slip op. 7269, 7275-76 (9th Cir. June 17, 1988); Young v. Anthony's Fish Grotto, Inc., 830 F.2d 993, 1002 (9th Cir. 1987); Stallcop, 820 F.2d at 1049; Truex v. Garret Freightlines, 784 F.2d 1347, 1350 (9th Cir. 1985). We have found that an emotional distress claim is not preempted if it arose from conduct not covered by the collective-bargaining agreement. See Tellez v. Pacific Gas & Elec. Co., 817 F.2d 536, 539 (9th Cir.), cert. denied, 108 S. Ct. 251 (1987). Moreover, in Miller v. AT & T Network Systems, No. 86-4074, slip op. 7555 (9th Cir. June 24, 1988), we reasoned that a state law right survives section 301 preemption if the state has imposed a mandatory and independent duty on employers * 571 that does not require consideration of the terms of the collective-bargaining agreement. Id. at 7564-71

 2

Because resolution of her claim would necessarily involve interpretation of the collective-bargaining agreement and rights created under its grievance procedures, it matters not that DeSherlia contends that Alpha Beta's alleged outrageous conduct violates the grievance settlement agreement rather than the collective-bargaining agreement itself. Moreover, we note that courts have recognized that grievance settlement agreements are "contracts" within the meaning of section 301. See Newton v. Local 801, 507 F. Supp. 439, 443 (S.D. Ohio 1980), aff'd, 684 F.2d 401 (6th Cir. 1982); Amalgamated Meat Cutters & Butchers Workmen v. M. Feder & Co., 224 F. Supp. 739, 739-40 (E.D. Pa. 1963); Sackett v. Wyatt, 32 Cal. App. 3d 592, 600-01, 108 Cal. Rptr. 219, 224-25 (1973); see also Retail Clerks Int'l Ass'n v. Lion Drygoods, Inc., 369 U.S. 17, 25-28 (1962) (holding that a strike-settlement agreement is a "contract" for section 301 purposes since that section's use of contract is clearly not limited to collective-bargaining agreements); Stallcop, 820 F.2d at 1048 (reasoning that oral agreement in connection with reinstatement could be effective only as part of the collective-bargaining agreement)

 3

As in Miller v. AT & T Network Systems, No. 86-4074, slip op. 7555 (9th Cir. June 24, 1988), we look to relevant California law to determine whether the state imposes a mandatory and independent duty on employers that does not require interpretation of the collective-bargaining agreement. Id. at 7564-71. To establish intentional infliction of emotional distress in California, a plaintiff must demonstrate, inter alia, that the defendant's conduct was so extreme and outrageous "as to exceed all bounds of that usually tolerated in a civilized community." Cervantez v. J.C. Penney Co., 24 Cal. 3d 579, 593, 156 Cal. Rptr. 198, 206, 595 P.2d 975, 983 (1979); Bogard v. Employers Cas. Co., 164 Cal. App. 3d 602, 616, 210 Cal. Rptr. 578, 587 (1985)

" [A]ll bounds of that usually tolerated in a civilized society" is not an independent, nonnegotiable standard of behavior. See Miller, No. 86-4074, slip op. at 7570. Moreover, California courts have recognized that the relationship between the parties is significant in determining liability for intentional infliction of emotional distress. Alcorn v. Anbro Eng'g, Inc., 2 Cal. 3d 493, 498 n. 2, 86 Cal. Rptr. 88, 90 n. 2, 468 P.2d 216, 218 n. 2 (1970). DeSherlia's status as an employee would entitle her to a greater degree of protection from outrage than if she were a stranger to Alpha Beta. See id.; see also Miller, No. 86-4074, slip op. at 7570-71 (discussing Oregon law). The outrageousness of DeSherlia's reinstatement under the circumstances of this case can be ascertained only by reference to the grievance settlement agreement and the grievance procedures under the collective-bargaining agreement. DeSherlia's emotional distress claim is thus preempted since it requires consideration of the terms of the collective-bargaining agreement. See Miller, No. 86-4074, slip op. at 7571. California state law does not impose a mandatory, independent, and nonnegotiable standard of behavior.

 4

In her brief, DeSherlia relies solely on Alpha Beta, Inc. v. Superior Court (Nahm), 180 Cal. App. 3d 324, 225 Cal. Rptr. 551, review granted, 189 Cal. App. 3d 520, 228 Cal. Rptr. 160, 721 P.2d 41 (1986), transferred, 198 Cal. App. 3d 1390, 244 Cal. Rptr. 414 (1988), in support of her contention that section 301 does not preempt her emotional distress claim. In Nahm, a terminated employee sued the company and its supervisory employees for intentional infliction of emotional distress several months after termination. Defendants moved for summary judgment on the grounds that the employee's tort action was preempted by federal labor law. The motion was denied. After various appeals, the California Court of Appeals was directed by the United States Supreme Court and the California Supreme Court to reconsider the case in light of Allis-Chalmers. The California Court of Appeals held that the employee's cause of action was not preempted. 224 Cal. Rptr. at 422. The court realized that Allis-Chalmers' policy of uniform interpretation extended "to any suit whose resolution necessarily involved the interpretation of contract terms and phrases or rights and remedies 'rooted in' or 'derivative' of the contract." Id. at 420. The court expressly distinguished Allis-Chalmers by concluding that the employee's " [r]ecovery is based on [her] right, independent of contract, to be free from [reprehensible] conduct." Id. (emphasis in original)

Such is not the case here. Rather than being a "straightforward state-law tort action for emotional distress caused by intentional outrageous conduct," id., resolution of DeSherlia's claim requires the interpretation of rights and remedies rooted in and derivative of the labor contract. Moreover, we have recently reasoned that a state's outrageousness standard for emotional distress claims is not an independent, nonnegotiable standard of behavior. Miller, No. 86-4074, slip op. at 7570. We reasoned that to survive preemption, a state law must impose a mandatory and independent duty that does not require interpretation of the terms of a collective-bargaining agreement. Id. at 7564, 7571. We finally note that Nahm continues to be pending appeal; the time for grant or denial of review has been extended.