Vane v. Nocella

COLE, Judge. We granted certiorari in this case to decide whether the trial court erred in finding that the National Labor Relations Act (NLRA or Act), 29 U.S.C. ³⁶⁵ §§ 151-169 (1982), preempted appellant’s state common law action for tortious interference with contractual relations. We glean the following facts from the record. Appellant, Milton M. Vane, was employed by H.L. Hartz & Sons (Hartz) as an industrial engineer.

In his deposition, appellant explained that his position entailed the regulation of production employees through the establishment of piece rates. Piece rates are incentive rates that compensate employees according to their productivity. In addition to establishing these rates, appellant instituted and applied the rates in the shops, and met with business agents of the Amalgamated Clothing and Textile Workers of America (Union) to negotiate settlements. Sam Nocella, Manager of the Union’s Baltimore Regional Joint Board, participated in the negotiation of piece rates at Hartz.

Nocella and the Union objected to these rates because they considered them unjust. Discussion between Nocella, as Union representative, and appellant’s immediate supervisor allegedly led to a demand by Nocella and the Union that Hartz dismiss appellant or else run the risk of having the Union considerably increase its wage demands. In response, Hartz dismissed appellant on June 16, 1981. Appellant filed a two count declaration in the Superior Court of Baltimore City (now Circuit Court for Baltimore City) against Nocella and the Union, alleging that they “intentionally and willfully coerced the employer into terminating” appellant’s employment.

In his declaration appellant sought both compensatory and punitive damages. In accordance with former Md. Rule 323 a 10 (now Md. Rule 2-322(b)(l)), appellees filed a Motion Raising Preliminary Objection on the basis that the trial court lacked jurisdiction over the subject matter of the suit. The trial court granted this motion on October 11, 1983, ruling that the National Labor Relations Board (NLRB or Board) had exclusive jurisdiction over the action. Appellant filed an order of appeal with the Court of Special Appeals, but we granted certiorari prior to decision by that Court.

We affirm. ³⁶⁶ I Federal labor law preemption is a complex and evolving body of law which this Court has had few occasions to analyze. See, e.g., Memco v. Maryland Employment Security Administration, 280 Md. 536 , 375 A.2d 1086 (1977) [hereinafter cited as Memco]; Baltimore Building & Construction Trades Council v. Maryland Port Authority, 238 Md. 232 , 208 A.2d 564 (1965). In light of the significant increase in Supreme Court decisional law in this area since Memco and in view of the Supreme Court’s refinement and modification of the basic federal labor preemption doctrine since its formulation over a quarter of a century ago in San Diego Building Trades Council v. Garmon, 359 U.S. 236 , 79 S.Ct. 773 , 3 L.Ed.2d 775 (1959) [hereinafter cited as Garmon], we find it useful to provide a brief overview of this doctrine. A. The enactment of the NLRA in 1935 marked a fundamental change in this Nation’s labor policies.

Congress expressly recognized that collective organization of segments of the labor force into bargaining units capable of exercising economic power comparable to that possessed by employers could produce benefits for the entire economy. Congress determined that those benefits would eventually outweigh the occasional costs of industrial strife associated with the organization of unions and the negotiation and enforcement of collective bargaining agreements. The previous notion that union activity was a “conspiracy” and that strikes and picketing were examples of unreasonable restraints of trade was replaced by an unequivocal national declaration of policy establishing the legitimacy of labor unionization and encouraging collective bargaining. See Sears, Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S. 180, 190 , 98 S.Ct. 1745, 1754 , 56 L.Ed.2d 209, 221 (1978) [hereinafter cited as Sears]; R. Gorman, Basic Text on Labor Law 1-6 (1976). ³⁶⁷ Through the NLRA Congress sought to protect the collective bargaining activities of employees and their representatives.

To that end, Congress created a regulatory scheme to be administered by a federal agency (NLRB) that would, in Congress’s view, develop experience and expertise in the labor relations area. As Justice Stevens explained in Sears, “[t]he interest in uniform development of the new national labor policy required that matters which fell squarely within the regulatory jurisdiction of the [NLRB] be evaluated in the first instance by that agency.” Sears, supra, 436 U.S. at 191 , 98 S.Ct. at 1754 , 56 L.Ed.2d at 222 . Thus, to achieve uniform as well as effective enforcement of the national labor policy, Congress vested the NLRB, not federal or state courts, with primary jurisdiction over activities subject to regulation by the Board. Local 926, International Union of Operating Engineers v. Jones, 460 U.S. 669, 681 , 103 S.Ct. 1453, 1461 , 75 L.Ed.2d 368, 379 (1983) [hereinafter cited as Jones].

In this respect, the “animating force” behind the federal labor law preemption doctrine “has been the recognition that nothing could more fully serve to defeat the purposes of the Act than to permit state and federal courts, without any limitation, to exercise jurisdiction over activities that are subject to regulation by the [NLRB].” Sears, supra, 436 U.S. at 218 , 98 S.Ct. at 1768 , 56 L.Ed.2d at 238 (Brennan, J., dissenting). This congressional scheme thus comports with the constitutional principles of preemption, which are designed to avoid conflicting regulation of conduct by various official bodies that might have some authority over the subject matter. Amalgamated Association of Motor Coach Employees v. Lockridge, 403 U.S. 274, 285-86 , 91 S.Ct. 1909, 1917 , 29 L.Ed.2d 473, 482 (1971) [hereinafter cited as Lock-ridge]. Justice Jackson, writing for a unanimous Court in a 1953 decision involving the Labor Management Relations Act, succinctly articulated the rationale underlying the federal labor law preemption doctrine: Congress did not merely lay down a substantive rule of law to be enforced by any tribunal competent to apply ³⁶⁸ 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 decision, 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 these diversities and conflicts likely to result from a variety of local procedures and attitudes toward labor controversies____ A multiplicity of tribunals and a diversity of procedures are quite as apt to produce incompatible or conflicting adjudications as are different rules of substantive law. Garner v. Teamsters Union, 346 U.S. 485, 490-91 , 74 S.Ct. 161, 165-66 , 98 L.Ed. 228 , 239-40 (1953). The doctrine of preemption in labor law has also been shaped by a competing consideration.

See Memco, supra, 280 Md. at 551 , 375 A.2d at 1095 . In enacting the NLRA, Congress never determined the precise extent to which state law must be displaced to achieve the unifying ends sought by the national legislature. “This has, quite frankly, left the Court with few available options.” Lockridge, supra, 403 U.S. at 289 , 91 S.Ct. at 1919 , 29 L.Ed.2d at 484 . Consequently, a major difficulty with labor law preemption analysis is that “the aims and social policy” Congress was implementing “were drawn with broad strokes while the details had to be filled in, to no small extent, by the judicial process.” Garmon, supra, 359 U.S. at 240 , 79 S.Ct. at 777 , 3 L.Ed.2d at 780 ; see also New York Telephone Co. v. New York State Department of Labor, 440 U.S. 519, 527 , 99 S.Ct. 1328, 1334 , 59 L.Ed.2d 553, 561 (1979) (plurality opinion) (courts relegated task of determining “the extent to which Congress has placed implicit limits on the ‘permissible scope of state regulation of activity touching upon labor-management relations.’ ”) (quoting Sears, supra, 436 ³⁶⁹ U.S. at 187, 98 S.Ct. at 1752 , 56 L.Ed.2d at 219 ). As the Supreme Court put in Lockridge : The principle of pre-emption that informs our general national labor law was born of this Court’s efforts, without the aid of explicit congressional guidance, to delimit state and federal judicial authority over labor disputes in order to preclude, so far as reasonably possible, conflict between the exertion of judicial and administrative power in the attainment of the multifaceted policies underlying the federal scheme.

Lockridge, supra, 403 U.S. at 286 , 91 S.Ct. at 1918 , 29 L.Ed.2d at 482-83 . B. Judicial experience with numerous approaches to the federal preemption issue eventually led the Supreme Court to articulate two distinct doctrines for determining whether state regulations or causes of action are preempted by the NLRA. See Metropolitan Life Insurance Co. v. Massachusetts, 471 U.S. -, -, 105 S.Ct. 2380, 2394 , 85 L.Ed.2d 728, 746 (1985) [hereinafter cited as Metropolitan Life]) Belknap, Inc. v. Hale, 463 U.S. 491, 498 , 103 S.Ct. 3172, 3176-77 , 77 L.Ed.2d 798, 806-07 (1983); see also Memco, supra, 280 Md. at 551-55 , 375 A.2d at 1095-97 . The particular preemption doctrine that is the focus of this litigation is the so-called Garmon rule, which had its genesis in Garmon, supra. 1 ³⁷⁰ At its most basic level, the Garmon rule provides that state and federal courts must yield exclusive jurisdiction to the NLRB whenever the conduct the state seeks to regulate is in an area subject to NLRB jurisdiction and is also either protected or arguably protected by § 7 of the Act, or is prohibited or arguably prohibited by § 8 of the Act.

See Cox, Recent Developments in Federal Labor Law Preemption, 41 Ohio St. L.J. 277 , 277 (1980). Justice Frankfurter, writing for the Garmon Court, “made two statements which have come to be accepted as the general guidelines for deciphering the unexpressed intent of Congress regarding the permissible scope of state regulation of activity touching upon labor-management relations.” Sears, supra, 436 U.S. at 187 , 98 S.Ct. at 1752 , 56 L.Ed.2d at 219 . The first statement, set forth below, relates to activity that is clearly protected or prohibited by the Act: 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. To leave the States free to regulate conduct so plainly within the central aim of federal regulation involves too great a danger of conflict between power ³⁷¹ asserted by Congress and requirements imposed by state law.

Garmon, supra, 359 U.S. at 244 , 79 S.Ct. at 779 , 3 L.Ed.2d at 782 . The second statement went on to articulate a more sweeping prophylactic rule: When 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 averted. Id. at 245, 79 S.Ct. at 780 , 3 L.Ed.2d at 783 (emphasis supplied). This rule displaces state jurisdiction when the activity is actually or arguably “within the compass of § 7 or § 8 of the Act,” id. at 246, 79 S.Ct. at 780 , 3 L.Ed.2d at 784 , and “protects the primary jurisdiction of the NLRB to determine in the first instance what kind of conduct is either prohibited or protected by the NLRA.” Metropolitan Life, supra, 471 U.S. at -, 105 S.Ct. at 2394 , 85 L.Ed.2d at 746 (footnote omitted).

The Supreme Court has repeatedly stated that preemption under the Garmon rule involves a balancing process. See, e.g., id. at - n. 26, 105 S.Ct. at 2394 n. 26, 85 L.Ed.2d at 746 n. 26; Belknap, Inc. v. Hale, supra, 463 U.S. at 498-99 , 103 S.Ct. at 3177 , 77 L.Ed.2d at 807 . Specifically, a court must balance the state’s interest in controlling or remedying the effects of the conduct in question against the interference with the NLRB’s ability to adjudicate controversies committed to it by the NLRA, and the risk that the state will sanction the conduct that the Act protects. Metropolitan Life, supra, 471 U.S. at -, 105 S.Ct. at 2394 n. 26, 85 L.Ed.2d at 746 n. 26.

This balancing process is in concert with the Court’s admonition that the Garmon guidelines are not to be applied “in a literal, mechanical fashion.” Sears, supra, 436 U.S. at 188 , 98 S.Ct. at 1753 , 56 L.Ed.2d at 220 (footnote omitted). The same doctrinal considerations that form the basis of the Garmon rule have led the Supreme Court to recognize exceptions in appropriate classes of cases. Under ³⁷² these judicially developed exceptions 2 a state regulation or cause of action may be sustained if the behavior to be regulated is behavior that is of only peripheral concern to the federal law (“peripheral concern” exception) or touches interests so deeply rooted in local feeling and responsibility that, in the absence of compelling congressional direction, the Court could not infer that Congress had deprived the states of the power to act (“deeply rooted in local feeling” exception). See, e.g., id. at 188-89 n. 13, 98 S.Ct. at 1753 n. 13, 56 L.Ed.2d at 220 n. 13; Farmer v. United Brotherhood of Carpenters, 430 U.S. 290, 296-97 , 97 S.Ct. 1056, 1061 , 51 L.Ed.2d 338, 348 (1977) [hereinafter cited as Farmer].

In accordance with these considerations, the Supreme Court has held that the NLRA does not preempt state actions for intentional infliction of emotional distress, see Farmer, supra, libel, Linn v. United Plant Guard Workers, 383 U.S. 53 , 86 S.Ct. 657 , 15 L.Ed.2d 582 (1966), the enforcement of laws concerning violence, Youngdahl v. Rainfair, Inc., 355 U.S. 131 , 78 S.Ct. 206 , 2 L.Ed.2d 151 (1957), and obstruction of access, Automobile Workers v. Russell, 356 U.S. 634 , 78 S.Ct. 932 , 2 L.Ed.2d 1030 (1958). C. In 1978, the Supreme Court in Sears further refined the Garmon rule by identifying different criteria to be con ³⁷³ sidered in determining whether a state court’s jurisdiction is preempted by the NLRA. These criteria depend upon whether the activity at issue is arguably prohibited under § 8 of the NLRA or arguably protected under § 7 of that Act. Under the arguably prohibited prong of the Garmon rule, a court must first determine whether a significant state interest exists in protecting the citizen from the challenged conduct.

Once the court makes this determination, it must then decide whether the exercise of state jurisdiction entails “little risk of interference with the regulatory jurisdiction of the Labor Board.” Sears, supra, 436 U.S. at 196 , 98 S.Ct. at 1757 , 56 L.Ed.2d at 225 . According to the Sears Court: The critical inquiry, therefore, is not whether the State is enforcing a law relating specifically to labor relations or one of general application but whether the controversy presented to the state court is identical to (as in Garner) or different from (as in Farmer) that which could have been, but was not, presented to the Labor Board. For it is only in the former situation that a state court’s exercise of jurisdiction necessarily involves a risk of interference with the unfair labor practice jurisdiction of the Board which the arguably prohibited branch of the Garmon doctrine was designed to avoid. Id. at 197, 98 S.Ct. at 1757-58 , 56 L.Ed.2d at 225-26 (footnote omitted).

Under the arguably protected prong of Garmon , the Sears Court adopted a different analytical framework because “[considerations of federal supremacy ... are implicated to a greater extent when labor-related activity is protected than when it is prohibited.” Id. at 200, 98 S.Ct. at 1759 , 56 L.Ed.2d at 227 . This aspect of the Garmon rule is principally concerned with the danger of state interference with federally protected conduct. After noting “the relative unimportance in this context of the ‘primary jurisdiction’ rationale articulated in Garmon[,]” the Court explained that “[t]he primary-jurisdiction rationale justifies preemption only in situations in which an aggrieved party ³⁷⁴ has a reasonable opportunity either to invoke the Board’s jurisdiction himself or else to induce his adversary to do so.” Id. at 200-01, 98 S.Ct. at 1759 , 56 L.Ed.2d at 227-28 . To shed light onto the application of these analytical models, it is useful to review the factual circumstances in Sears.

Upon determining that carpentry work in Sears’s store was being done by carpenters who had not been dispatched from the union’s hiring halls, the union established picket lines on Sears’s property. Sears sought a preliminary injunction in state court against the continuing trespass when the union refused to remove the pickets from Sears’s property. The trial court entered a preliminary injunction prohibiting the union from picketing on Sears’s property. The Court of Appeal of California affirmed, but the State Supreme Court reversed, holding that because the picketing was both arguably protected by § 7 of the NLRA and arguably prohibited by § 8 of that Act, state jurisdiction was preempted under the Garmon guidelines.

The United States Supreme Court reversed. Although the union’s activities were arguably prohibited under § 8 of the NLRA as having a recognitional or work reassignment objective, the Sears Court found that the controversy that Sears might have presented to the NLRB was not the same as the controversy presented to the state court. Had Sears filed an unfair labor practice charge with the NLRB, the issue before that agency would have been whether the picketing had a recognitional or work reassignment objective. By contrast, in the state court Sears only challenged the location of the picketing.

Because the issues were sufficiently different, the Sears Court held that permitting the state court to adjudicate Sears’s trespass claim could create no realistic risk of interference with the NLRB’s primary jurisdiction to enforce the statutory prohibition against unfair labor practices. Id. at 198, 98 S.Ct. at 1758 , 56 L.Ed.2d at 226 . With respect to the arguably protected prong of Garmon , the Supreme Court indicated that the union’s activities were ³⁷⁵ arguably protected under § 7 of the NLRA as having the objective of securing Sears’s compliance with area standards. The Sears Court, however, found that the arguably protected character of the union’s picketing did not provide a sufficient justification for preemption of the state court’s jurisdiction over Sears’s trespass claim when, as in Sears, the party who could have presented the protection issue to the NLRB had not done so and the other party to the dispute had no acceptable means of doing so.

The Court went on to explain that permitting state courts to evaluate the merits of an argument that certain trespassing activity is protected does not create an unacceptable risk of interference with conduct that the NLRB, and a court reviewing the NLRB’s jurisdiction, would find protected. Id. at 205, 98 S.Ct. at 1761 , 56 L.Ed.2d at 230 . II In light of the Garmon rule and its multifaceted aspects, appellant advances two basic arguments in support of his contention that the trial court erred in granting the appellees’ Motion Raising Preliminary Objection. First, appellant contends that he is not subject to NLRB jurisdiction because, as a managerial or supervisory employee, he is not covered by the Act.

Second, in an alternative argument, appellant argues that the conduct the state is asked to regulate is neither protected nor prohibited by the NLRA so as to confer jurisdiction upon the NLRB. Our examination of the federal labor law preemption doctrine leads us to conclude that the trial court did not err in granting the appellees’ Motion Raising Preliminary Objection. A. We do not, of course, write on a clean slate in analyzing the issue presented in this case. The Supreme Court has considered on several occasions whether a common law tort action for interference with a contract of employment is preempted by the NLRA.

See Jones, supra; Iron Workers ³⁷⁶ Union v. Perko, 373 U.S. 701 , 83 S.Ct. 1429 , 10 L.Ed.2d 646 (1963) [hereinafter cited as Perko]. In these cases the Court found that the NLRA preempted the state causes of action. Because we consider Jones and Perko dispositive of the issue presented in the case sub judice, we examine those cases in greater detail. Perko, a member of the Iron Workers Union (Union), worked sometimes as a regular ironworker, sometimes as a foreman, and sometimes as a superintendent.

While working as a superintendent on a particular project, the Union suspended his membership because he had violated a union rule. Union representatives then informed Perko’s employer that because of Perko’s violation Union members would no longer take orders from him. Several weeks later the employer discharged Perko because of his dispute with the Union. Perko filed a complaint in state court against the Union and certain of its officers alleging that the defendants had tortiously interfered with his employment relations.

Perko eventually secured a jury verdict of $25,000, and the Court of Appeals of Ohio affirmed. The United States Supreme Court reversed, holding that the case fell squarely within the preemption principles declared in Garmon. Id. at 705-06, 83 S.Ct. at 1431-32 , 10 L.Ed.2d at 649 . In so holding, the Perko Court assigned “two independent