Jackson v. Illinois Laborers' & Contracting Training Trust Fund

Filing 9

Opinion (See Written Opinion): The Plaintiff's Objection to removal [d/e 6] is DENIED. The Defendant's Motion to dismiss [d/e 2] is ALLOWED. CASE DISMISSED. Entered by Judge Richard Mills on 12/07/2011. (VM, ilcd)

E-FILED

Wednesday, 07 December, 2011 03:36:27 PM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
SARAH JACKSON,

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Plaintiff,
v.
ILLINOIS LABORERS’ &
CONTRACTING TRAINING
TRUST FUND,
Defendant.

NO. 11-3334

OPINION
RICHARD MILLS, U.S. District Judge:
Posit: Who has jurisdiction?
The Defendant removed this case from state court, claiming that
jurisdiction lies here because the action involves at least one federal
question.
The Court finds that Plaintiff’s claims are preempted by federal law.
Therefore, Plaintiff’s Objection to removal is Denied.
At the end of the day, Plaintiff’s claims are deficient and Defendant’s
Motion to dismiss must be Allowed.

I.
In Count I of her complaint, the Plaintiff seeks a declaratory
judgment and to compel arbitration. In Count II, the Plaintiff asserts a
claim for breach of the implied covenant of good faith and fair dealing
because of the Defendant’s failure to arbitrate. Count III is a claim for
specific performance–that the Defendant be directed to submit the dispute
to arbitration.
In her Objection to removal, the Plaintiff states that the gravamen of
her complaint is that Defendant first agreed to arbitrate her grievances,
disputes, and claims and then reneged, balked or refused. The Plaintiff
further claims that regardless of any defenses that Defendant may advance
to her claims, state law remedies lie for the breach of an agreement.
The Plaintiff further asserts that no question of labor management
policy is presented by the allegation that Defendant renounced the
agreement. The Plaintiff makes no claim against Local 773 or any labor
organization, nor does she ask Local 773 to participate in anything. The
reference in the Complaint to membership in Local 773 is merely

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background for the origin of the initial agreement between these two
parties.
Although the Plaintiff emphasizes that she makes no claim against the
union, it is apparent upon review that the gravamen of her complaint is
that Defendant has refused to arbitrate her grievance and underlying
dispute in accordance with the collective bargaining agreement’s grievance
machinery.
The Plaintiff contends that a determination of whether the
Defendant’s refusal to arbitrate her claim is a unique question of state law.
She states that in Penn v. Ryan’s Family Steak Houses, Inc., 269 F.3d 753
(2001), the Seventh Circuit considered the existence of an agreement to
arbitrate between employer and employee as a question of state law. As the
Defendant alleges, however, Penn is inapposite. In Penn, the employee
had signed an arbitration agreement with a third party governing
employment disputes with the employer. 269 F.3d at 755. It thus did not
involve the typical direct employer/employee arbitration dispute. See id.
The Plaintiff further asserts that there is no unique question of federal

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law that requires the interpretation of a collective bargaining agreement or
any other collateral document. The questions involve strictly state law
issues, including whether (1) there was an agreement; (2) there was a
breach, balk or renege; (3) there was an excuse, justification, or failure of
conditions which would justify the refusal to arbitrate.
Citing Textile Workers Unions of Am. v. Lincoln Mills, 353 U.S. 448
(1957), the Defendant claims it is well established that § 301 of the Labor
Management Relations Act, 29 U.S.C. § 185 (LMRA), not only confers
jurisdiction over all suits for violation of contracts between an employer and
a labor organization, but it is also a source of substantive law for the
enforcement of collective bargaining agreements, including suits to compel
arbitration. See id. at 450-51.
The Plaintiff claims that Lincoln Mills is inapplicable because that
case is not analogous to an action by a freestanding employee and her
attorney seeking to enforce an arbitration agreement. Rather, the plaintiff
seeking to compel arbitration in Lincoln Mills was the union. See id. at
449. The Plaintiff further contends that, unlike the instant case, Lincoln

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Mills did not involve an agreement, once made, to arbitrate a specific
grievance, followed by a renege, balk or withdrawal from that agreement.
It dealt with initial refusals to arbitrate. See id. The Plaintiff asserts that,
unlike in this case, an interpretation of contract damages or remedies was
required in Lincoln Mills. This is about the breach of an agreement, which
the Plaintiff notes is a matter of state law. She claims that in this case, the
remedies are simply specific performance and/or some contract damages
under state law for breach or refusal of an agreement once made.
The Plaintiff has cited no case law for the relevance of these purported
distinctions. As the Defendant points out, the United States Supreme
Court rejected some of those arguments in Smith v. Evening News Ass’n,
371 U.S. 195 (1962). The Court stated:
Section 301 has been applied to suits to compel arbitration of
such individual grievances as rates of pay, hours of work and
wrongful discharge . . . to obtain specific enforcement of an
arbitrator’s award offering reinstatement and back pay to
individual employees . . . to recover wage increases in a contest
over the validity of the collective bargaining contract . . . and to
suits against individual union members for violation of a nostrike clause contained in a collective bargaining agreement. . .
The concept that all suits to vindicate individual employee
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rights arising from a collective bargaining contract should be
excluded from the coverage of s 301 has thus not survived. The
rights of individual employees concerning rates of pay and
conditions of employment are a major focus of the negotiation
and administration of collective bargaining contracts.
Individual claims lie at the heart of the grievance and
arbitration machinery, are to a large degree inevitably
intertwined with union interests and many times precipitate
grave questions concerning the interpretation and enforceability
of the collective bargaining contract on which they are based.
To exclude these claims from the ambit of s 301 would stultify
the congressional policy of having the administration of
collective bargaining contracts accomplished under a uniform
body of federal substantive law. This we are unwilling to do.
The same considerations foreclose respondent’s reading of
s 301 to exclude all suits brought by employees instead of
unions. The word ‘between,’ it suggests, refers to ‘suits,’ not
‘contracts,’ and therefore only suits between unions and
employers are within the purview of s 301. According to this
view, suits by employees for breach of a collective bargaining
contract would not arise under s 301 and would be governed by
state law, if not preempted by Garmon, as this one would be,
whereas a suit by a union for the same breach of the same
contract would be a s 301 suit ruled by federal law. Neither the
language and structure of s 301 nor its legislative history
requires or persuasively supports this restrictive interpretation,
which would frustrate rather than serve the congressional policy
expressed in that section. The possibility that individual
contract terms might have different meanings under state and
federal law would inevitably exert a disruptive influence upon
both the negotiation and administration of collective
agreements.

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Smith, 371 U.S. at 199-201 (internal citations and quotation marks
omitted). Thus, the fact that an individual is the party, rather than the
union, is of no legal significance. The minor distinctions that Plaintiff
makes do not divest this Court of jurisdiction. The Court agrees with the
Defendant’s assertion that Plaintiff’s attempt to exact “some contract
damages under state law for the breach or refusal of an agreement once
made” is the sort of tactic the Supreme Court stated could “exert a
disruptive influence upon both the negotiation and administration of
collective agreements.”
Counts I and III of the complaint seek to compel arbitration.
Although Count I is characterized as an action under the Illinois Uniform
Arbitration Act and Count III is brought as an action for “specific
performance,” both counts are actually section 301 actions to compel
arbitration. Section 301 of the LMRA provides:
Suits for violation of contracts between an employer and a labor
organization representing employees in an industry affecting
commerce as defined in this chapter . . . may be brought in any
district court of the United States having jurisdiction of the
parties, without respect to the amount in controversy or
without regard to the citizenship of the parties.
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29 U.S.C. § 185(a). The Defendant notes that the Seventh Circuit has
stated “if the [plaintiff’s] claim, ostensibly based on state law, cannot be
adjudicated without interpretation of the collective bargaining agreement,
the claim turns into a federal claim that the agreement itself has been
violated.” Atchley v. Heritage Cable Vision Associates, 101 F.3d 495, 501
(7th Cir. 1996) (citation omitted). “If the resolution of a state law claim
depends on the meaning of, or requires the interpretation of, a collective
bargaining agreement, the application of state law is preempted and federal
labor law principles must be employed to resolve the dispute.” Id. at 499.
The Plaintiff’s action to compel arbitration requires an interpretation
of the collective bargaining agreement. An interpretation is necessary
because a “duty to arbitrate can arise only by agreement.” United Steel v.
TriMas Corporation, 531 F.3d 531, 535 (7th Cir. 2008).

Although

brought as state law claims, the state claims “turn into” federal claims and
“federal labor law principles must be employed to resolve the dispute.”
Atchley, 101 F.3d at 499, 501. The Defendant notes that the Seventh
Circuit has recognized that district courts have the power “under § 301 to

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compel an employer to arbitrate grievances in accordance with a collective
bargaining agreement.” See Evans v. Einhorn, 855 F.2d 1245, 1252 (7th
Cir. 1988).
The Defendant contends, therefore, that because Counts I and III
require an interpretation of the applicable collective bargaining agreement
and federal law is clear that § 301 of the LMRA governs actions to compel
arbitration, Counts 1 and III are preempted.
Based on the foregoing, the Court concludes that although Counts I,
II, and III are all styled as state law claims, each is preempted by § 301 of
the LMRA. This Court is the proper forum for resolution of the claims.
The Plaintiff’s Objection to removal is Denied.
II.
In support of its Motion to dismiss, the Defendant alleges that
controlling federal law establishes that (1) Counts 1 and III, which seek an
Order requiring the Defendant to submit to arbitration, are time-barred
under the applicable six-month statute of limitations; and (2) Count II,
which seeks money damages for a breach of the covenant of good faith and

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fair dealing, is not an independent cause of action under Illinois law, and,
even if it were, it is still preempted by § 301 of the LMRA.
The Defendant asserts that Counts I and III are barred by the
applicable six month statute of limitations.

The Seventh Circuit has

determined that a “six-month limitations period is appropriate in suits to
compel arbitration under a collective bargaining agreement.” United Food
& Commercial Workers Local 100A v. Hofmeister & Son, Inc., 950 F.2d
1340, 1347 (7th Cir. 1991). The cause of action to compel arbitration
accrues, and the limitations period begins, with the refusal to arbitrate. See
id.; see also Alberici-Eby v. Local 520, Int’l Union of Operating Engineers,
992 F.2d 727, 731 (7th Cir. 1993). According to the Plaintiff’s Complaint,
the refusal to arbitrate occurred on one of two dates in 2006. Therefore,
the limitations period started running approximately five years before this
lawsuit was filed.
The Complaint states that the refusal to arbitrate occurred in either
June or November of 2006. Therefore, the Court concludes that the sixmonth statute of limitations expired long before this suit was filed on April

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25, 2011. Accordingly, Counts I and III will be dismissed because they are
barred by the limitations period.
The Defendant also asserts that Count II of the Plaintiff’s complaint
alleging a claim for breach of an implied covenant of good faith and fair
dealing must be dismissed for failure to state a claim upon which relief can
be granted. The Defendant contends there is no such cause of action.
The Illinois Supreme Court has determined that the covenant of good
faith and fair dealing is a rule of construction, not an independent source
of tort liability. See Voyles v. Sandia Mortg. Corp., 196 Ill.2d 288, 297
(2001).

Although “every contract implies good faith and fair dealing

between the parties,” Illinois law doe not recognize the covenant of good
faith and fair dealing as an independent sources of duties. See Beraha v.
Baxter Health Care Corp., 956 F.2d 1436, 1443 (7th Cir. 1992).
Because there is no independent action for a covenant of good faith
and fair dealing, Count II will be dismissed for failure to state a claim.
Ergo, the Plaintiff’s Objection to removal [d/e 6] is DENIED.
The Defendant’s Motion to dismiss [d/e 2] is ALLOWED.

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CASE DISMISSED.
ENTER: December 7, 2011
FOR THE COURT:
s/Richard Mills
United States District Judge

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