Fallbrook Hospital Corporation v. California Nurses Association/National Nurses Organizing Committee (CNA/NNOC) et al, No. 3:2013cv01233 - Document 19 (S.D. Cal. 2014)
Court Description: ORDER Granting 12 Defendant's Motion to Dismiss Second Amended Complaint. Plaintiff is granted twenty one (21) days leave to file a third amended complaint. Signed by Judge Gonzalo P. Curiel on 2/19/2014. (srm)
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Fallbrook Hospital Corporation v. California Nurses Association/Nation... Committee (CNA/NNOC) et al Doc. 19 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 FALLBROOK HOSPITAL CORPORATION, vs. CASE NO. 13cv1233-GPC(WVG) Plaintiff, 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CALIFORNIA NURSES ASSOCIATION/NATIONAL NURSES ORGANIZING COMMITTEE (CNA/NNOC), AFLCIO ORDER GRANTING DEFENDANT’S MOTION TO DISMISS SECOND AMENDED COMPLAINT [Dkt. No. 12.] Defendant. Before the Court is Defendant California Nurses Association/National Nurses Organizing Committee’s (“CNA/NNOC” or “CNA”) motion to dismiss the second amended complaint under Federal Rule of Civil Procedure (“Rule”) 12(b)(6). (Dkt. No. 12.) Plaintiff Fallbrook Hospital Corporation d/b/a Fallbrook Hospital filed an opposition and Defendant filed a reply. (Dkt. Nos. 14 & 15.) The motion is submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1). Based on the analysis below, the Court GRANTS Defendant’s motion to dismiss. Background Plaintiff Fallbrook Hospital operates an acute care hospital in Fallbrook, California. (Dkt. No. 11, SAC ¶ 5.) Defendant CNA/NNOC is a labor organization -1- [13cv1233-GPC(WVG) ] Dockets.Justia.com 1 and was certified by the National Labor Relations Board (“NLRB”) on May 24, 2012 2 as the exclusive collective bargaining representative of registered nurses employed by 3 Fallbrook Hospital. (Id. ¶ 7.) Plaintiff brings this action under Section 301 of the 4 Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185 et seq. against 5 Defendant for failing to comply with an oral bargaining agreement to submit all 6 unresolved disputes to final and binding arbitration. It alleges causes of action for 7 breach of contract and seeks relief in the forms of damages, specific performance and 8 declaratory relief. 9 According to the second amended complaint, in March 2012, the parties met to 10 discuss an agreement between Fallbrook Hospital and the CNA “which would define 11 certain terms and conditions to govern any organizing which might be conducted by 12 the CNA among Registered Nurses employed by Fallbrook, and which would define 13 a framework for the negotiation of an initial collective bargaining agreement in the 14 event the CNA was certified by the NLRB as the exclusive collective bargaining agent 15 for Fallbrook’s Registered Nurses.” (Dkt. No. 11, SAC ¶ 14.) At the meeting, the 16 parties entered into a proposed labor relations agreement (“proposed LRA”)1 where the 17 parties agreed to submit any unresolved disputes about compliance with or construction 18 of the Agreement exclusively to final and binding arbitration.2 (Id. ¶ 15.) They also 19 agreed that they would work together to resolve issues through direct discussion and 20 exclusive arbitration, instead of through appeal to outside persons, agencies, 21 organizations or authorities. (Id.) Written drafts of the proposed LRA were then 22 1 In its motion, Defendant seeks to incorporate the proposed LRA into the SAC 23 as it is extensively referred to in the SAC. Plaintiff opposes arguing that the proposed LRA and the oral collective bargaining agreement are two distinct agreements and the 24 proposed LRA does not serve a basis for Plaintiff’s claim. The only reference in the SAC to the proposed LRA is that the parties orally agreed to abide by four provision 25 in the proposed LRA. Based on Plaintiff’s opposition and the fact that the SAC does not rely on the proposed LRA as a basis for its claims, the Court DENIES Defendant’s 26 request to incorporate the proposed LRA into the SAC. 27 2 According to Plaintiff, this allegation does not support its argument that Defendant “clearly and unmistakably” waived its right because the oral CBA is distinct 28 from the proposed LRA. -2- [13cv1233-GPC(WVG) ] 1 exchanged between the parties. (Id. ¶ 17.) 2 On April 12, 2012, in a telephone conversation between Don Carmody, 3 Fallbrook’s representative, who is also an attorney, and Jane Lawhon, legal counsel for 4 the CNA, the parties expected the proposed LRA to be executed once the parties 5 completed exchanging comments regarding minor modifications. (Id. ¶ 24.) In that 6 conversation, Carmody suggested, and Lawhon agreed, that the parties should simply 7 orally agree to apply the terms memorialized in the most recent written draft copy of 8 the proposed LRA with respect to the following terms: “a) the CNA’s service of a 9 ‘Notice of Intent to Organize’ the Registered Nurses employed by Fallbrook; b) the 10 CNA’s subsequent organizing activity at Fallbrook; c) the filing of a petition for an 11 election with, and the conduct of a secret ballot election by, the National Labor 12 Relations Board (NLRB), and d) the negotiation of an initial collective bargaining 13 agreement in the event the CNA won an election and was certified by the NLRB, 14 including the standard of the conduct of bargaining between the Parties as specified on 15 page 5, Section 4(a)(2) of the Proposed LRA.” (Id. ¶ 25.) 16 The SAC alleges that the CNA agreed to a standard that would apply to the 17 parties’ negotiations of a collective bargaining agreement (“CBA”) and that the 18 negotiations would be governed by a private standard developed by the parties, and not 19 by any outside law and a private arbitrator would hold the exclusive jurisdiction to 20 decide whether the CNA or Fallbrook had violated the agreed upon standard. (Id. ¶ 21 26.) Pursuant to the terms and conditions of the oral CBA, the parties waived their 22 right to resolve any dispute by filing an unfair labor practice charge with the NLRB and 23 all disputes would be submitted directly to the arbitrator. (Id. ¶ 27.) 24 To demonstrate that the parties were in compliance with the terms and conditions 25 of the oral CBA, Plaintiff points to numerous instances where the parties conducted and 26 complied with the terms and conditions of the oral CBA. (Id. ¶ 32.) Moreover, from 27 April 12, 2012 until September 26, 2012, Plaintiff claims that the CNA sought to 28 resolve all disputes through the oral CBA’s dispute resolution procedure and presents -3- [13cv1233-GPC(WVG) ] 1 two examples where the CNA presented disputes to an arbitrator. (Id. ¶¶ 33, 34.) 2 In addition, the SAC alleges that on July 3, 2012, the parties participated in a 3 bargaining session pursuant to the oral CBA when a dispute arose. (Id. ¶¶ 36, 38.) Mr. 4 Carmody stated that when he told Matthews, the CNA representative, that he could take 5 the matter to binding arbitration in compliance with the terms of the oral CBA, 6 Matthews did not state any disagreement that arbitration was the parties’ agreed upon 7 forum. (Id. ¶ 42.) Matthews ultimately filed an unfair labor practice charge against 8 Falbrook with the NLRB in July 2012. (Id. ¶¶ 43, 44.) Plaintiff complains that 9 Defendant breached the oral CBA agreement by filing a ULP charge with the NLRB. 10 A. Legal Standard on Federal Rule of Civil Procedure 12(b)(6) 11 Federal Rule of Civil Procedure (“Rule”) 12(b)(6) permits dismissal for “failure 12 to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal 13 under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory 14 or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police 15 Dep’t., 901 F.2d 696, 699 (9th Cir. 1990). Under Federal Rule of Civil Procedure 16 8(a)(2), the plaintiff is required only to set forth a “short and plain statement of the 17 claim showing that the pleader is entitled to relief,” and “give the defendant fair notice 18 of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. 19 Twombly, 550 U.S. 544, 555 (2007). 20 A complaint may survive a motion to dismiss only if, taking all well-pleaded 21 factual allegations as true, it contains enough facts to “state a claim to relief that is 22 plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 23 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual 24 content that allows the court to draw the reasonable inference that the defendant is 25 liable for the misconduct alleged.” Id. “Threadbare recitals of the elements of a cause 26 of action, supported by mere conclusory statements, do not suffice.” Id. “In sum, for 27 a complaint to survive a motion to dismiss, the non-conclusory factual content, and 28 reasonable inferences from that content, must be plausibly suggestive of a claim -4- [13cv1233-GPC(WVG) ] 1 entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2 2009) (quotations omitted). In reviewing a Rule 12(b)(6) motion, the Court accepts as 3 true all facts alleged in the complaint, and draws all reasonable inferences in favor of 4 the plaintiff. al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). 5 Where a motion to dismiss is granted, “leave to amend should be granted ‘unless 6 the court determines that the allegation of other facts consistent with the challenged 7 pleading could not possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 8 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well 9 Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to 10 amend would be futile, the Court may deny leave to amend. See Desoto, 957 F.2d at 11 658; Schreiber, 806 F.2d at 1401. 12 B. Allegations as to Waiver of Statutory Right 13 Defendant moves to dismiss arguing that the SAC does not allege a “clear and 14 unmistakable” waiver of the right to file unfair labor practice charges with the NLRB. 15 Plaintiff argues that Defendant has incorrectly interpreted “clear and unmistakable” 16 standard. 17 There is a statutory right to bring unfair labor practice charges before the NLRB. 18 Hospital of Barstow, Inc. v. CNA/NNOC, No. ED CV 13-1063(CAS)(DTBx), 2013 19 WL 4590973, at *4 (C.D. Cal. Aug. 26, 2013) (citing Nash v. Fla. Indus. Comm’n, 389 20 U.S. 235, 238 (1967) (noting that it is unlawful for an employer to “seek to restrain an 21 employee in the exercise of his right to file charges”); see Isla Verde Hotel Corp., v. 22 N.L.R.B., 702 F.2d 268, 272 (1st Cir. 1983). In Wright, the United States Supreme 23 Court held that a collective bargaining agreement waives the right of a union member 24 to pursue employment-related statutory claims in court only when the waiver of those 25 rights is “clear and unmistakable.” Wright v. Universal Martime Serv. Corp., 525 U.S. 26 70, 75, 80 (1998) (holding that arbitration clause which provided for arbitration of 27 “[m]atters under dispute,” was not sufficiently clear to waive a union member’s right 28 to file a claim under the ADA in a federal district court.) A waiver of a statutory right -5- [13cv1233-GPC(WVG) ] 1 must be “clear and unmistakable.” Id. at 80. The Court also stated that any collective 2 bargaining agreement requirement to arbitrate must be particularly clear. Id. at 79. 3 “[A] knowing waiver does not occur where neither the arbitration clause nor any 4 other written employment agreement expressly put the plaintiffs ‘on notice that they 5 were bound to arbitrate [employment discrimination] claims.’” Renteria v. Prudential 6 Ins. Co. of Am., 113 F.3d 1104, 1108 (9th Cir. 1997) (quoting Prudential Ins. Co. of 7 Am. v. Lai, 42 F.3d 1299, 1305 (9th Cir. 1994)). “[A] collective-bargaining agreement 8 that clearly and unmistakably requires union members to arbitrate ADEA claims is 9 enforceable as a matter of federal law.” 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 10 (2009) (CBA required union members to submit all claims of employment 11 discrimination to binding arbitration under the grievance and dispute resolution 12 procedure.”) The determination of whether statutory rights are subject to grievance 13 procedures contained in a collective bargaining agreement is a question of law for the 14 Court. See Collins v. Lobdell, 188 F.3d 1124, 1127 (9th Cir. 1999). 15 First, Plaintiff contends that the clear and unmistakable standard has not been 16 used to examine whether or not a party has agreed to waive its right to file unfair labor 17 practices (“ULP”) charges before the NLRB but instead used to determine if parties 18 agreed to waive their rights to bargain over a mandatory subject of bargaining. 19 Defendant asserts that the ULP filed with the NLRB alleged that Fallbrook violated 20 specific statutory provision, namely sections 8(a)(1) and (5), of the NLRA, which are 21 mandatory subjects of bargaining. The Court agrees with Defendant. Plaintiff filed an 22 ULP before the NLRB based on sections 8(a)(1) and (5).3 Therefore, the clear and 23 unmistakable standard applies. 24 Second, Plaintiff contends that even if the Court applies the clear and 25 3 Section 8(a)(1) provides that it “shall be an unfair labor practice for an employer 26 (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title.” 29 U.S.C. § 158(a)(1). Section 8(a)(5) states 27 that it “shall be an unfair labor practice for an employer (5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of 28 section 159(a) of this title.” 29 U.S.C. § 158(a)(5). -6- [13cv1233-GPC(WVG) ] 1 unmistakable waiver standard, the SAC satisfies the Rule 12(b)(6) standard. It asserts 2 that a waiver of statutory rights may be evidenced by the parties’ conduct and 3 bargaining history and cites to Local Joint Executive Bd. of Las Vegas v. NLRB, 540 4 F.3d 1072, 1079 (9th Cir. 2008); and NLRB v. United Techs. Corp., 884 F.2d 1569, 5 1575 (2d Cir. 1989). Defendant opposes. 6 In the SAC, Plaintiff asserts that CNA’s past conduct clearly and unmistakably 7 demonstrates that it knowingly waived its right to file charges with the NLRB. (Dkt. 8 No. 11, SAC ¶¶ 32(g),33, 34, 35, 42.) These allegations assert that CNA arbitrated or 9 intended to arbitrate certain disputes with an arbitrator. Based on CNA’s past conduct, 10 this confirmed the parties’ agreement to submit all disputes, including those that would 11 otherwise be the basis of a ULP charge, to binding arbitration. 12 In Local Joint Executive Bd. of Las Vegas, the Ninth Circuit noted that the 13 standard for waiving statutory rights is high. Local Joint Executive Bd. of Las Vegas, 14 540 F.3d at 1079. It is the employer’s burden to show that the contractual waiver is 15 “‘explicitly stated, clear and unmistakable.’” Id. (citations omitted). The waiver may 16 be demonstrated by bargaining history but requires “the matter at issue to have been 17 fully discussed and consciously explored during negotiations and the union to have 18 consciously yielded or clearly and unmistakably waived its interest in the matter.” Id. 19 In addition, in United Techs. Corp., the Second Circuit stated that because 20 federal labor policy disfavors waivers of statutory rights by union, the waiver must be 21 clear and unmistakable. United Techs. Corp., 884 F.2d 1569, 1575 (2d Cir. 1989). 22 “Such waiver may be found in an express provision in the parties' collective bargaining 23 agreement, or by the conduct of the parties, including their past practices and 24 bargaining history, or by a combination of the two.” Id. (citations omitted). 25 “Bargaining history and past practices-if taken alone-may establish waiver of a 26 mandatory bargaining subject when the matter was thoroughly aired in past 27 negotiations and the union ‘consciously yielded’ its rights in the matter.” Id. (citations 28 omitted). -7- [13cv1233-GPC(WVG) ] 1 In line with Wright, whether through a written CBA or past conduct by the 2 parties, Plaintiff must demonstrate that the CNA consciously yielded its statutory rights 3 in the matter. See Local Joint Executive Bd. of Las Vegas, 540 F.3d at 1079. 4 Here, the fact that the parties previously participated in telephonic arbitration 5 proceedings or intended to pursue arbitration in order to resolve a dispute does not 6 sufficiently allege that Defendant clearly and unmistakably waived its right to assert 7 ULP claims with the NLRB. (See Dkt. No. 11, SAC ¶¶ 32(g), 33, 34.) Moreover, a 8 general, conclusory allegation that the CNA sought to resolve disputes “only through 9 the Parties’ exclusive Dispute Resolution Procedure” is not sufficient to demonstrate 10 a waiver. (See Dkt. No. 11, SAC ¶ 35.) Lastly, Plaintiff also alleges that at one 11 meeting, when Mr. Carmody stated that the parties had a dispute and that if Stephen 12 Matthews, the Chief Spokesperson for the CNA, was not happy, he could take the 13 matter to binding arbitration, in compliance with the terms of the oral CBA, Matthews 14 did not state any disagreement. (Id. ¶¶ 36, 42.) The fact that Matthews did not object 15 does not demonstrate a “clear and unmistakable” waiver. The allegations in the SAC 16 are either ambiguous or not sufficient to allege that Defendant “clearly and mistakably” 17 waives its statutory right to file a claim with the NLRB. They do not allege that the 18 matter was thoroughly aired in past negotiations and the union consciously yielded its 19 rights in the matter. See Local Joint Executive Bd. of Las Vegas, 540 F.3d at 1079. 20 Moreover, the Court has not found and Plaintiff has cited no cases where an 21 initial CBA can be made orally. The cases cites by Plaintiffs concern oral agreements 22 modifying a written collective bargaining agreement. See Certified Corp. v. Hawaii 23 Teamsters and Allied Workers, Local 996, IBT, 597 F.2d 1269, 1271 (9th Cir. 1979) 24 (a “written collective bargaining agreement can be orally modified.”); In re Dittmar, 25 618 F.3d 1199 (10th Cir. 2010); Capitol-Husting Co. v. NLRB, 671 F.2d 237, 243 (7 26 Cir. 1982) (employer and union had an initial written contract which was later orally 27 modified after the initial contract expired). Plaintiff has not demonstrated that an initial 28 -8- [13cv1233-GPC(WVG) ] 1 collective bargaining agreement can be oral.4 2 Alternatively, even if there was an oral collective bargaining agreement, the only 3 provisions Plaintiff alleges the parties orally agreed to were the four terms of the 4 proposed LRA which included the following: “a) the CNA’s service of a “Notice of 5 Intent to Organize” the Registered Nurses employed by Fallbrook; b) the CNA’s 6 subsequent organizing activity at Fallbrook; c) the filing of a petition for an election 7 with, and the conduct of a secret ballot election by, the National Labor Relations Board 8 (NLRB), and d) the negotiation of an initial collective bargaining agreement in the 9 event the CNA won an election and was certified by the NLRB, including the standard 10 of the conduct of bargaining between the Parties as specified on page 5, Section 4(a)(2) 11 of the Proposed LRA.” (Dkt. No. 11, SAC ¶ 25.) Section 4(a)(2) discusses conduct 12 for a productive and respectful bargaining process but does not address waiver of any 13 statutory rights. These provision that both parties allegedly specifically agreed to do 14 not address arbitration or waiver of statutory rights. 15 Accordingly, the allegations in the second amended complaint do not sufficiently 16 assert the existence of a valid waiver of Defendant’s right to bring charges before the 17 NLRB. Therefore, the breach of contract fails to state a claim as well as the relief it 18 seeks for damages, specific performance and declaratory relief. Accordingly, the Court 19 GRANTS Defendant’s motion to dismiss the SAC for failure to state a claim for relief.5 20 21 4 The Court notes that in the related case, 13cv1159-GPC(WVG), concerning a petition for temporary injunction pursuant to 10(j) of the NLRA, the Court granted 22 Petitioner’s motion for temporary injunction and noted that the ALJ concluded that since there was no collective bargaining agreement, there can be no arbitration clause. 23 (Case No. 13cv1159-GPC(WVG), Dkt. No. 17.) 5 24 The Court notes that in a very similar case involving the Hospital of Barstow, the United States District Court for the Central District of California granted 25 Defendant’s motion to dismiss the SAC with prejudice. See Hosp. of Barstow v. California Nurses Ass’n/National Nurses Organizing Committee, No. EDCV 13-1063 26 CAS (DTBx), 2013 WL 6095559 (C.D. Cal. Nov. 18,. 2013). The Court held that not only did the complaint fail to state a claim but even if plaintiff had alleged facts 27 establishing a waiver of defendant’s right to file ULP charges before the NLRB, plaintiff failed to state a claim for breach of the alleged oral collective bargaining 28 agreement because the statutory right for relief before the NLRB cannot be foreclosed -9- [13cv1233-GPC(WVG) ] 1 2 Conclusion Based on the above, the Court GRANTS Defendant’s motion to dismiss. While 3 Defendant requests that the Court grant the motion to dismiss without leave to amend, 4 the Court shall grant Plaintiff one last chance to cure the deficiencies in the pleadings. 5 Plaintiff shall be granted leave to file a third amended complaint within twenty one (21) 6 days of the filed date of this Order. The hearing date set for February 21, 2013 shall 7 be vacated. 8 IT IS SO ORDERED. 9 DATED: February 19, 2014 10 11 HON. GONZALO P. CURIEL United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 by private contract. Id. at * 7 (citing Lodge 743, Int’l Ass’n of Machinists v. United Aircraft Corp., 337 F.2d 5, 8 (2d Cir. 1964)). The Court declines to discuss this issue 28 as it was not briefed by the parties. - 10 - [13cv1233-GPC(WVG) ]
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