Law v. INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL NO. 37

CATHELL, Judge. Appellants are former employees of Omni House Health Behavioral Services, Incorporated (hereafter “Omni House”), which operates a health care facility in Anne Arundel County. ⁴⁶² During the spring of 2001, authorized agents of the International Union of Operating Engineers, Local No. 37, AFL-CIO, appellees (hereafter “the union”), undertook an organizing campaign to create a bargaining unit consisting of certain employees at Omni House. In the course of the organizing campaign, appellants engaged in picketing and related collective action as instructed by the union in an effort to get Omni House to recognize the union as their collective bargaining representative. In response to the picketing, Omni House suspended and then terminated the employment of appellants because they had not given Omni House ten-days notice of their intentions to picket. 29 U.S.C. § 158 (g), appears to require a ten-day notice prior to picketing of a health care institution by a union. 1 On July 25, 2001, appellants filed suit against the union in the Circuit Court for Baltimore City for negligent misrepresentation under State law because the union had assured appellants that their activities were lawful and not subject to adverse action by their employer.

On August 21, 2001, the union filed a “notice of removal” of the case to the United States District Court for the District of Maryland. On December 18, 2001, the union then filed a Motion to Dismiss the federal case for lack of subject matter jurisdiction, claiming that the issue presented was preempted by federal law mandating that cases such as the case sub judice initially be presented to the National Labor Relations Board (hereafter “NLRB”). On January 3, 2002, the federal district court neither granted nor denied the union’s Motion to Dismiss and remanded the case to the Circuit Court for Baltimore City for it to decide whether the National Labor Relations Act (hereafter “NLRA”) preempts appellants’ claims and places exclusive subject matter jurisdiction for their claims with the NLRB. On May 29, 2002, Judge Kaye A. Allison of the Circuit Court issued an Order granting the union’s Motion to Dismiss ⁴⁶³ and stated that the court must defer to the NLRB because it has jurisdiction over the matter.

On June 5, 2002, appellants filed a Notice of Appeal to the Court of Special Appeals. On November 8, 2002, we, on our own initiative, granted a writ of certiorari to undertake review of this issue before the intermediate appellate court acted. Law, et. at. v. Operating Engineers Local No. 37, 371 Md. 613 , 810 A.2d 961 (2002). Appellants presented one question for review in their brief: “Was the Circuit Court in error for dismissing the Appellants’ Case ruling that a State tort fell under the jurisdiction of the National Labor Relations Board and was thus preempted?” We answer no to appellants’ question and affirm the decision of the Circuit Court.

We hold that appellants’ claims are preempted by the NLRA because any State court decision to adjudicate the tort suit for negligent misrepresentation would, under the circumstances in the case at bar, result in adjudication of underlying labor issues relating to unfair labor practices falling within the NLRB’s primary jurisdiction. I. FACTS Appellants sued the union after being terminated by their employer, Omni House. In the spring of 2001, the union solicited appellants to unionize by explaining the benefits of unionization and collective bargaining. In late May of 2001, the union’s representatives met with appellants to discuss the possibility of having the union act as their collective bargaining representative.

At least seven of the eight appellants signed union cards, as well as two other employees who are not parties to this suit, authorizing the union to act as their exclusive bargaining representative. On June 12, 2001, at a meeting between appellants and the union, the union explained to appellants that they should not be concerned about being fired for their union membership as they were “within their legal rights.” Then, upon the advice of the union representatives, appellants notified the CEO of Omni House that they had organized and were members of a ⁴⁶⁴ union and requested that Omni House recognize the union as their bargaining agent. The union alleges that, at this time, appellants had not yet become members of the union, even though they might have thought the opposite when appellants told Omni House they had joined a union. 2 On June 14, 2001, the union notified Omni House that appellants were assisting in its organizing efforts. This letter advised Omni House that appellants, the bargaining unit, were covered by section 7 of the NLRA. 3 On June 15, 2001, the union advised Omni House that a majority of the employees in the bargaining unit had designated the union as their exclusive bargaining representative.

The letter also requested recognition by Omni House of the union as the exclusive bargaining representative of the employees at the Third Avenue Omni House location in Anne Arundel County. On June 19, 2001, appellants engaged in a recognitional strike and picketed Omni House in an attempt to have it recognize the union as appellants’ exclusive bargaining representative and because the CEO of Omni House refused to speak with and/or meet with the union organizers. Subsequent to the picketing, the union advised appellants that the CEO had refused to accept the union’s letter of ⁴⁶⁵ representation and that appellants should return to work the following day. When appellants returned to work the next day, June 20th, they were, individually, called into the executive office of Omni House and advised that they were suspended because of their strike activities.

Appellants, on June 21, 2001, again went out on the street and began picketing. Representatives of the union were present and approved the resumption of the picketing. At approximately noon on June 21st, appellants were notified by the union’s attorney that the picketing and striking activities were improper because, under the law, they were required to have given ten-days notice prior to picketing because of Omni House’s status as a health care institution. 4 As a result, the union advised appellants to write a letter informing the CEO that all of appellants were going to return to work the next day, Friday, June 22, 2001. On June 22, 2001, the union advised appellants that the decision to strike was an error on their part and apologized for their suspension.

Also on this day, the CEO of Omni House issued a letter to appellants notifying each of them that their employment at Omni House was being terminated for failure to give the required ten-days notice of picketing activity as required by the NLRA. Appellants then filed a tort suit for negligent misrepresentation against the union in the Circuit Court. The union sought removal of the case to the federal district court and later filed ⁴⁶⁶ a Motion to Dismiss the case in the federal court. On January 3, 2002, the District Court Judge Andre M. Davis, sua sponte, neither granted nor denied the union’s Motion to Dismiss and instead remanded the case back to the Circuit Court for Baltimore County for lack of federal court jurisdiction, holding that it was for that State court to decide whether the NLRA preempts appellants’ claim and places subject matter jurisdiction over the claim with the NLRB.

On remand to the Circuit Court, the Circuit Court Judge granted the union’s Motion to Dismiss, stating: “This case comes before this court on a Motion to Dismiss, filed by the [union]. The [union] argues that this court lacks subject matter jurisdiction because resolution of [appellants’] negligent misrepresentation claim involves issues that implicate §§ 7 and 8 of the [NLRA], codified at 29 USC §§ 157 , 158. ‘When an activity is arguably subject to §§ 7 and §§ 8 of- the [NLRA], the States as well as the federal courts must defer to the exclusive competence of the [NLRB].’ San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 245 [ 79 S.Ct. 773 , 3 L.Ed.2d 775 ] (1959). This court agrees. “This court finds that an adjudication of [appellants’] claims would require this court to interpret and apply the notice requirement, as set forth in § 8(g) of the [NLRA], as well as other portions of the [NLRA], as raised by the [union].

As this case involves activities which are subject to §§ 7 or §§ 8 of the [NLRA], this court must defer to the [NLRB]. Garmon, 359 U.S. at 245 [, 79 S.Ct. 773 ]. Therefore, it is this 29th day of May, 2002, in the Circuit Court for Baltimore City ORDERED, that the [union’s] Motion to Dismiss is hereby GRANTED.” [Alterations added.] A. THE SUPREMACY CLAUSE The Supremacy Clause of the United States Constitution, art. VI, cl. 2, 5 requires that when compliance with both ⁴⁶⁷ federal and state law is a physical impossibility, the “state law is Void to the extent it conflicts with a federal statute.’ ” Sanders v. State, 57 Md.App. 156, 167, 469 A.2d 476, 482 , cert, denied, 299 Md. 656 , 474 A.2d 1345 (1984) (quoting Maryland v. Louisiana, 451 U.S. 725, 747 , 101 S.Ct. 2114, 2129 , 68 L.Ed.2d 576, 596 (1981)).

See also Hillsborough County, Florida v. Automated Medical Laboratories, Inc., 471 U.S. 707, 713 , 105 S.Ct. 2371, 2375 , 85 L.Ed.2d 714, 721 (1985); Harrison v. Schwartz, 319 Md. 360, 364 , 572 A.2d 528, 530 , cert, denied, 498 U.S. 851 , 111 S.Ct. 143 , 112 L.Ed.2d 110 (1990); Hecht Co. v. C & P Telephone Co., 310 Md. 148, 152 , 528 A.2d 474, 475-76 (1987). If Congress has expressly stated preemptive intent or evidenced an intent to occupy a field, federal law shall govern. Harrison, 319 Md. at 364 , 572 A.2d at 530 . When, however, Congress does not expressly state its intent, there is a presumption against preemption.

Abbot by Abbot v. American Cyanamid Co., 844 F.2d 1108, 1112 (4th Cir.1988) (citing Maryland v. Louisiana, 451 U.S. at 726 , 101 S.Ct. at 2118 , 68 L.Ed.2d at 576 ). The presumption is even stronger against preemption of state remedies, like tort remedies, when no federal remedy exists. Abbot, 844 F.2d at 1112 (citing Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 251 , 104 S.Ct. 615, 622-23 , 78 L.Ed.2d 443, 454 (1984)); see also Taylor v. General Motors Corp., 875 F.2d 816 (11th Cir.1989), cert, denied, 494 U.S. 1065 , 110 S.Ct. 1781 , 108 L.Ed.2d 783 (1990) (strong presumption against preemption when subject matter is tort remedy). In the case sub judice, as we discuss more fully infra, a federal remedy does exist for appellants — a claim in respect to Omni House might possibly be brought before the NLRB for adjudication.

More important, it appears that in order to fully adjudicate claims against the union it will be necessary to ⁴⁶⁸ determine whether the reaction of Omni House to the strike and picketing, i.e., the termination of appellants, was an unfair labor practice under section 8 of the NLRA. Additionally, as we later indicate, an alleged inadequacy of an NLRB remedy, as compared to the remedies potentially available for a negligent misrepresentation claim in a state court suit, does not under the circumstances here present, overcome the applicability of what is known as the Garmon 6 preemption that prevails, generally, in certain labor disputes. Federal preemption principles at this stage of the proceedings, deprive the Maryland courts of jurisdiction over the instant matter. B. NLRA AND PREEMPTION The NLRA established the NLRB to adjudicate labor disputes between and among employees, unions and employers. 7 Since the 1950s, the Supreme Court has stressed the primary role to be played by the NLRB in labor dispute resolution.

In Garner v. Teamsters, Local Union No. 776, 346 U.S. 485, 490 , 74 S.Ct. 161, 165-66 , 98 L.Ed. 228 , 239 (1953), the Supreme Court noted that the NLRB had been vested with its powers because: ' “Congress did not merely lay down a substantive rule of law to be enforced by any tribunal competent to apply law generally to the parties. It went on to confide primary interpretation and application of its rules to a specific and specially constituted tribunal and prescribed a particular - procedure for investigation, complaint and notice, and hearing and decisions, including judicial relief pending a final administrative order. Congress evidently considered that centralized administration of specially designed procedures was necessary to obtain uniform application of its substantive rules and to avoid those diversities and conflicts likely ⁴⁶⁹ to result from a variety of local procedures and attitudes toward labor controversies.” In San Diego Building Trades Council v. Garmon, 359 U.S. 236, 246 , 79 S.Ct. 773, 780 , 3 L.Ed.2d 775, 784 (1959), the case correctly relied upon by the Circuit Court Judge in the case subjudice, the Supreme Court further explained: “The governing consideration is that to allow the States to control activities that are potentially subject to federal regulation involves too great a danger of conflict with national labor policy.” The Supreme Court then enunciated the general rule (the Garmon preemption) that state regulation is preempted: “When it is clear or may fairly be assumed that the activities which a State purports to regulate are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8, due regard for the federal enactment requires that state jurisdiction must yield.” Id. at 244, 79 S.Ct. at 779 , 3 L.Ed.2d at 782 . Even when it is not clear that the activity is protected or prohibited, as is reflected by the factual disputes in the case sub judice, the determination of the status of the activity is to be made by the NLRB, the agency declared by Congress to have special competence over such issues. 8 The Supreme Court opined: “[w]hen an activity is arguably subject to § 7 or § 8 of the Act, the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board if the danger of state interference with national policy is to be adverted.” Id. at 245, 79 S.Ct. at 780 , 3 L.Ed.2d at 783 (emphasis added). 9 ⁴⁷⁰ The Garmon rule, at its most basic level, provides that state and federal courts must yield exclusive jurisdiction to the NLRB whenever the conduct sought to be rectified by actions in state courts is in an area subject to NLRB jurisdiction and is either protected or “arguably” protected by section 7 of the NLRA, or is prohibited or “arguably” prohibited by section 8 of the NLRA, i. e., labor disputes involving activities protected and prohibited by the NLRA.

This rule preempts state jurisdiction when the activity is actually or arguably “within the compass of § 7 or § 8 of the [NLRA].” Id. at 246, 79 S.Ct. at 780 , 3 L.Ed.2d at 784 (alteration added). In Garmon , however, the Supreme Court created two exceptions to the preemption doctrine for certain classes of eases and stated: “where the activity regulated was a merely peripheral concern of the Labor Management Relations Act ... [o]r where the regulated conduct touched interests so deeply rooted in local feeling and responsibility that, in the absence of compelling congressional direction, we could not infer that Congress had deprived the States of the power to act.” Id. at 243-44 , 79 S.Ct. at 779 , 3 L.Ed.2d at 782 . 10 These exceptions provide a sense of the scope of the preemption ⁴⁷¹ doctrine explained in Garmon . In Belknap, Inc. v. Hale, 463 U.S. 491, 498-99 , 103 S.Ct. 3172, 3177 , 77 L.Ed.2d 798, 807 (1983), when discussing the Garmon preemption doctrine and its exceptions, the Supreme Court stated that “the State’s interest in controlling or remedying the effects of the conduct is balanced against both the interference "with the [NLRB’s] ability to adjudicate controversies committed to it by the [NLRA], and the risk that the State will sanction conduct that the [NLRA] protects.” (citations omitted) (alterations added). The facts of the case sub judice reflect that the Garmon exceptions are inapplicable in this case.

There are core issues that must be decided by the NLRB. It is clear that the interpretation of facts material to the labor issues here present is within that tribunal’s initial jurisdiction under sections 7 and 8 of the NLRA. G. SECTIONS 7 AND 8 OF THE NLRA The NLRB has primary jurisdiction to deal with labor disputes involving activities protected and prohibited by sections 7 and 8 of the NLRA. These particular sections of the NLRA broadly “govern both protected ‘concerted activities’ and [prohibited] unfair labor practices.

They regulate the vital, economic instruments of the strike and the picket line, and impinge on the clash of the still unsettled claims between employers and labor unions.” Garmon, 359 U.S. at 241 , 79 S.Ct. at 777 , 3 L.Ed.2d at 780 (alteration added). Section 7 of the NLRA guarantees employees certain rights and states: “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such ⁴⁷² activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3).” NLRA, § 7 (codified at 29 U.S.C. § 157 ). Section 8 of the NLRA enumerates several unfair labor practices that can be committed by an employer, including the following: “(a) Unfair labor practices by employer. It shall be an unfair labor practice for an employer— (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7....

(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization....” NLRA, § 8 (codified at 29 U.S.C. § 158 (a)(1) and (3)). It is clear that if Omni House improperly terminated appellants in order to interfere with their attempts to organize or if the termination, in a discriminatory fashion, was intended to discourage the attempts of the union to organize, Omni House might have committed unfair labor practices. Furthermore, section 8(b)(1)(A) provides that it is an unfair labor practice for a labor organization “to restrain or coerce (A) employees in the exercise of the rights guaranteed in section 7” NLRA, § 8 (codified at 29 U.S.C. § 158 (b)(1)). In some situations, misrepresentations by a union during an organizing campaign might constitute an unfair labor practice under section 8(b). 11 Finally, section 8(g) provides that: ⁴⁷³ “A labor organization before engaging in any strike, picketing, or other concerted refusal to work at any health care institution shall, not less than ten days prior to such action, notify the institution in writing and the Federal Mediation and Conciliation Service of that intention, except that in the case of bargaining for an initial agreement following certification or recognition the notice required by this subsection shall not be given until the expiration of the period specified in clause (B) of the last sentence of section 8(d) of this Act.” [Emphasis added.] 29 U.S.C. § 158 .

II

DISCUSSION This appeal stems from appellant’s initial complaint filed in the Circuit Court. We hold that the negligent misrepresentation tort claim, necessarily, pursuant to the facts of the case sub judice as plead in the complaint, would require judicial review of issues relating to actions that are clearly or, at least “arguably,” protected and/or prohibited by sections 7 and 8 of the NLRA. The union correctly asserts that appellant’s negligent misrepresentation claim is “preempted because the conduct relied on to prove a crucial element of that claim is actually or arguably covered by the NLR[A].” In Maryland, the elements that constitute the tort of negligent misrepresentation are: “(1) The defendant, owing a duty of care to the plaintiff, negligently asserts a false statement; “(2) The defendant intends that his statement will be acted upon by the plaintiff; “(3) The defendant has knowledge that the plaintiff will probably rely on the statement, which, if erroneous, will cause loss or injury; ⁴⁷⁴ “(4) The plaintiff, justifiably, takes action in reliance on the statement; and “(5) The plaintiff suffers damages proximately caused by the defendant’s negligence.” Martens Chevrolet, Inc. v. Seney, 292 Md. 328, 337 , 439 A.2d 534, 539 (1982). Appellants contend that the facts are simple and that this is simply a tort case based upon the tortious conduct on the part of the union.

Therefore, they assert, the State has jurisdiction over the dispute because the State has jurisdiction over this recognized state cause of action and a union is amenable to suit in the State court. We disagree. To prevail appellants would have to prove that, pursuant to element one, supra, the union’s advice that appellants had a lawful right to picket under