Wrongful Term Based Upon Labor Code § 923 Pre-Empted by NLRA

An unpublished January 2008 opinion regarding NLRA preemption has been ordered published. In Luke v. Collotype Labels USA, Inc. (2007) __ Cal.App.4th __, the First District Court of Appeal affirmed a summary judgment against an employee who asserted, among other things, wrongful termination in violation of public policy. One of the public policies at play was that set forth in Labor Code § 923:

Negotiation of terms and conditions of labor should result from voluntary agreement between employer and employees. Governmental authority has permitted and encouraged employers to organize in the corporate and other forms of capital control. In dealing with such employers, the individual unorganized worker is helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment. Therefore it is necessary that the individual workman have full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.

The other was Section 232.5:

No employer may do any of the following:

(a) Require, as a condition of employment, that an employee refrain from disclosing information about the employer's working conditions.

(b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose information about the employer's working conditions.

(c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses information about the employer's working conditions.

(d) This section is not intended to permit an employee to disclose proprietary information, trade secret information, or information that is otherwise subject to a legal privilege without the consent of his or her employer.

The plaintiff alleged that he was terminated because he told other employees that they should keep a record of problems they encountered and express their concerns to management, “provided support and ideas to other employees who complained about working conditions" and discussed “working conditions such as heat, bathroom availability, no seating during breaks and lunch, and promotion decisions.” The trial court granted the defendant employer's motion for summary judgment on the basis that plaintiff's claims were preempted by the National Labor Relations Act, finding that the complaint alleged “nothing more than unfair labor practices that are preempted by federal law and, therefore, are not properly heard in this tribunal.” The Court of Appeal affirmed.

You can download Luke v. Collotype Labels USA, Inc. here in pdf or word format. One is left to wonder to what extent Grant-Burton v. Covenant Care (2002) 99 Cal.App.4th 1361 (plaintiff can assert wrongful termination claim under Labor Code § 232's prohibition against discipline for disclosing wages with other employees) remains viable.

Comments

[Barbara Adams]

Mike,

There are really two parts to your question about Grant Burton and about the viability of 923, 232.5 and 232 cases.

1. After Luke, is there now a conflict between appellate decisions? Even though Grant-Burton didn't address preemption, as a practical matter there really has to be. The conduct in question in Grant-Burton (everybody sitting around in a circle "disclosing" information about their "wages") was really clearly protected activity under the NLRA. So if you buy Luke, then the application of 232 to Grant-Burton is preempted. But the situation is muddy enough I'm not sure the Supremes would take this on.

2. But does Luke mean that all 232 and 232.5 actions are preempted? Clearly not. The statutes protect "disclosure" to anyone, not just in connection with concerted action. And Luke suggests that whether or not the case is preempted is a case by case determination.

I blogged about this on our employment blog a few days ago: http://www.calemployeerights.com/2008/02/wrongful-termin.html

Also, I argued an appeal dealing with 232 and 232.5 at the First District Court of Appeal last Thursday, and expect we'll see a decision on these in the next couple of weeks. In our case (Harvey v. Sybase) the disclosures were not concerted action, but were up-stream, from employee to company vice-president. Preemption wasn't briefed by the parties, although defense counsel did call Luke to the Court's attention.

Based upon the new realty that many 232.5 claims my be preimpted, I believe that we have to study up on NLRA Section 7 and 8 as well as the procedure for making NLRB claims (a one page form). Significantly, the statute of limitations for making such claim is only 6 months from the adverse action. The predominant remedy is reinstatement, coupled with back pay. Mitigation of damages is apparently a real issue as to back pay.

Question: if our facts show a grey area as whether Sections 7 and 8 would cover our Labor Code 232.5 facts, it may be reasonable and proper to file the NLRB claim within the 6 month period to preserve the rights under that Act. I understand there may be a downside to that: defense attonrey in the state court action under 232.5 would argue that filing the NLRB claim represents an admission or grounds for judicial estoppel that the complained of activities were "concerted" within the meaning of Section 7 and 8 (and thus preempted). However, I think we may be able to avoid that by taking the position that we are engaging in a form of alternative pleading. That is, the NLRB Claim should allege a caveat stating that we are UNCERTAIN whether the protected conduct our client engaged in qualifies as "concerted action" within the meaning of NLRA, but because of preemption law, we must file the NLRB claim in an abundance of caution and as an "alternative theory of liability." What do you think?

K Merrill