Laber et al v. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union et al

Filing 14

Memorandum Opinion and Order: Plaintiffs' motion to remand (Doc. No. 7 ) is denied, plaintiffs' breach of contract and tortious interference with contract claims are dismissed, and plaintiffs are afforded fourteen (14) days to file a motion for leave to amend their complaint, along with a proposed amended complaint. Defendants' motion to dismiss (Doc. No. 8 ), premised on the theory that plaintiffs' claims were not preempted, is denied as moot. If plaintiffs do not timely file a conforming amended complaint, the Court will dismiss the action. Judge Sara Lioi on 1/31/2014. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

DONALD LABER, et al.,
PLAINTIFFS,
vs.

UNITED STEEL, PAPER AND
FORESTRY, RUBBER,
MANUFACTURING, ENERGY,
ALLIED INDUSTRIAL AND
SERVICE WORKERS
INTERNATIONAL UNION, et al.,
DEFENDANTS.

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CASE NO. 5:13CV640
JUDGE SARA LIOI

MEMORANDUM OPINION AND
ORDER

In 2006, plaintiffs Donald Laber and Douglas Whack (“plaintiffs”)
terminated their employment with HLI Commercial Highway, Inc. (“HLI”), a subsidiary
of Hayes Lemmerz International, Inc. (“Hayes Lemmerz”), by taking advantage of a onetime voluntary separation agreement (“memorandum agreement”) entered into between
HLI and defendants United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers Intl. Union (the “international”) and Local 21 (the
“local”) (collectively “defendants”). (Doc. No. 1-2, Compl. at ¶¶ 6-11.) The
memorandum agreement, and the subsequent agreement entered into between HLI and
the international, form the basis for this contact action.
Presently before the Court is plaintiffs’ motion to remand the matter to
state court (Doc. No. 7). Defendants oppose the motion (Doc. No. 10), and plaintiffs have

filed a reply (Doc. No. 11). Also before the Court is defendants’ motion to dismiss the
complaint for failure to state a claim (Doc. Nos. 8, 9). This motion is also fully briefed.
(Doc. No. 12 [plaintiffs’ opposition brief]; Doc. No. 13 [defendants’ reply].) For the
reasons that follow, plaintiffs’ motion to remand is DENIED, plaintiffs’ state law claims
are preempted by federal law, and defendants’ motion to dismiss is DENIED as moot.
I.

BACKGROUND
The salient facts are not in dispute. In 2004, HLI entered into a collective

bargaining agreement (“CBA”) with the local. The CBA was effective from August 1,
2004 to August 2, 2008. (Compl. at ¶ 8.) The parties agree that plaintiffs were members
of the local and were covered by the CBA.
On July 17, 2006, defendants and HLI entered into the agreement that is at
the eye of the present storm. (Compl. at ¶¶ 6-8; Doc. No. 1-2, memorandum agreement,
beginning at 18.)1 The memorandum agreement provided that bargaining unit employees
with sufficient seniority were entitled to elect to voluntarily terminate their employment
with HLI in exchange for three categories of benefits: “a cash award based upon
seniority; a cash award aimed at bridging the gap for medical expenses until the
employee becomes Medicare eligible; and extended healthcare benefits.” (Memorandum
Agreement at 19.) To take advantage of the agreement, qualifying bargaining unit
employees were required to register their election and submit the appropriate paperwork

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The Court may consider the agreements referenced in the complaint, and attached thereto, without
converting the motion to dismiss into one for summary judgment. Cataldo v. U.S. Steel Corp., 676 F.3d
542, 555 (6th Cir.), cert. denied, 133 S. Ct. 1239 (2013). Additionally, the Court may consider such
evidence for the purpose of satisfying itself that it has jurisdiction over this matter. See Ohio Nat’l Life Ins.
Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990).
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by October 31, 2006. (Memorandum agreement at 18.) There is also no dispute that
plaintiffs were third-party beneficiaries to this agreement, for they elected to voluntarily
separate their employment in exchange for the specific benefits provided therein. (Compl.
at ¶ 11.)
According to the complaint, the “Memorandum agreement is a contract
separate and apart from” the CBA. (Compl. at ¶ 8.) The Memorandum agreement, itself,
provides that it was the product of negotiations between HLI and the local that “afforded
both parties full and complete opportunities to exchange and discuss proposals regarding
[the] one-time” voluntary separation opportunity. (Memorandum agreement at 18). Upon
executing the memorandum agreement, the parties to it “acknowledge[d] that they
clearly, expressly, unequivocally, and totally waive[d] any rights to bargain over the
terms set forth herein.” (Id.)
In 2009, and subsequent to plaintiffs’ respective decisions to voluntarily
separate, Hayes Lemmerz sought protection under Chapter 11 of the United States
Bankruptcy Code. (Compl. at ¶ 17.) During the course of the bankruptcy, Hayes
Lemmerz and the international entered into an agreement “for the purpose of negotiating
a modification of ‘retiree benefits,’ as defined in Section 1114(a) of the Bankruptcy
Code[.]” (Doc. No. 1-2, bankruptcy agreement, beginning at 25; Compl. at ¶ 19.) The
bankruptcy agreement made no reference to plaintiffs’ rights arising under the
memorandum agreement, and Hayes Lemmerz did not list plaintiffs as creditors of the
bankruptcy estate in sufficient time to permit plaintiffs to file a proof of claim. (Compl. at
¶ 18.) Nonetheless, the bankruptcy agreement had the effect of modifying the medical
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benefits of all retirees of Hayes Lemmerz and its affiliates, including those who had
exercised their rights under the memorandum agreement. (Compl. at ¶¶ 21-23.)
On February 25, 2013, plaintiffs brought suit against defendants in the
Summit County Court of Common Pleas. The complaint contained two claims, one for
breach of contract and a second claim for tortious interference with contractual and
business relations, with the memorandum agreement serving as the foundation for both
claims. The complaint purports to rest on state common law, and is free of any reference
to federal law.
On March 25, 2013, defendants removed the action to this Court on the
basis of federal question jurisdiction under 28 U.S.C. §§ 1441 and 1446. Noting that the
complaint alleges a breach of an agreement between a union and an employer, defendants
contend that plaintiffs’ claims are governed by § 301 of the Labor Management Relations
Act, 29 U.S.C. § 185, “which provides federal jurisdiction over suits for ‘violation of
contracts between an employer and a labor organization.’” (Doc. No. 1, Notice of
Removal, at 3 [quoting DeCoe v. GMC, 32 F.3d 212, 215 (6th Cir. 1994)].)
II.

MOTION TO REMAND
A.

Standard of Review

A defendant may remove to federal court only actions that originally could
have been filed in federal court. Jefferson County v. Acker, 527 U.S. 423, 430, 119 S. Ct.
2069, 144 L. Ed. 2d 408 (1999); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.
Ct. 2425, 96 L. Ed. 2d 318 (1987). As a court of limited jurisdiction, a federal district
court has the duty to remand a case where federal jurisdiction is lacking. 28 U.S.C. §
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1447(c). All doubts as to the existence of federal jurisdiction are resolved in favor of
remand. Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999).
The parties agree that diversity is incomplete, and therefore cannot
provide a basis for jurisdiction. Accordingly, this Court has jurisdiction over this case, if
at all, based upon the presence of a federal question. To remove a case on the basis of this
doctrine, “the federal question ordinarily must appear on the face of a properly pleaded
complaint; an anticipated or actual federal defense generally does not qualify a case for
removal.” Jefferson County, 527 U.S. at 430-31 (citing Louisville & Nashville R. Co. v.
Mottley, 211 U.S. 149, 152, 29 S. Ct. 42, 53 L. Ed. 126 (1908)). In the normal course of
events, the job of the district court is limited to examining the well-pleaded complaint
allegations to determine whether “federal law creates the cause of action or that the
plaintiff’s right to relief necessarily depends on resolution of a substantial question of
federal law . . . , in that ‘federal law is a necessary element of one of the well pleaded . . .
claims.’” Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808, 108 S. Ct.
2166, 100 L. Ed. 2d 811 (1988) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation
Trust, 462 U.S. 1, 13, 27-28, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983)).
It is plaintiffs’ position that, as the masters of their complaint, they have
avoided federal jurisdiction by confining their claims exclusively within the boundaries
of state law contract and tort principles. Caterpillar, 482 U.S. at 392 (because the
plaintiff is considered to be the “master of his complaint,” the well-pleaded complaint
doctrine generally dictates that a plaintiff may avoid federal jurisdiction by relying

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exclusively on state law). Defendants, on the other hand, insist that plaintiffs’ claims are
preempted by federal law.
B.

Section 301 Preemption

“One of the few exceptions to the well-pleaded complaint rule is complete
preemption, which ‘applies in circumstances in which Congress may intend the
preemptive force of a federal statute to be so extraordinary that any claim purportedly
based on that preempted state law is considered, from its inception, a federal claim, and
therefore arises under federal law.’” Paluda v. ThyssenKrupp Budd Co., 303 F. App’x
305, 308 (6th Cir. 2008) (quoting Mikulski v. Centerior Energy Corp., 501 F.3d 555, 563
(6th Cir. 2007) (en banc) (further citations omitted)). According to defendants, plaintiffs’
state law claims are completely preempted by § 301 of the Labor Management Relations
Act (“LMRA”).
Section 301 provides:
Suits for violation of contracts between an employer and a labor
organization representing employees in an industry affecting commerce as
defined in this Act, or between any such labor organizations, 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.
29 U.S.C. § 185(a). Where applicable, the preemptive force of § 301 is so powerful that it
entirely displaces any state cause of action for violation of contracts between an employer
and a union. Caterpillar, 482 U.S. at 394. Thus, where the essence of a state law claim is
a provision in a collective bargaining agreement, that claim arises under federal law, and
is completely preempted. Id. at 394 (quoting Avco Corp. v. Machinists, 390 U.S. 557,
558, 88 S. Ct. 1235, 20 L. Ed. 2d 126 (1968)).
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“[T]he subject matter of § 301(a) ‘is peculiarly one that calls for uniform
law. . . . 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.” Teamsters Local 174 v. Lucas
Flour Co., 369 U.S. 95, 103, 82 S. Ct. 571, 7 L. Ed. 2d 593 (1962) (quotations omitted).
“The interests in interpretive uniformity and predictability that require that labor-contract
disputes be resolved by reference to federal law also require that the meaning given a
contract phrase or term be subject to uniform federal interpretation.” Allis-Chalmers
Corp. v. Lueck, 471 U.S. 202, 211, 105 S. Ct. 1904, 85 L. Ed. 2d 206 (1985).
Given the need for uniformity in the interpretation and application of
collective bargaining agreements, “state law does not exist as an independent source of
private rights to enforce collective-bargaining contracts.” Caterpillar, 482 U.S. at 394
(internal quotation and citation omitted). “Moreover, the Supreme Court has refused to
allow artful pleading to circumvent the power of § 301’s preemptive force. Form is not to
triumph over substance as employees relabel contract claims as claims for tortuous
breach of a contract.” Davis v. Bell Atlantic-West Virginia, 110 F.3d 245, 247 (4th Cir.
1997) (citing Allis-Chalmers, 471 U.S. at 211).
While § 301 preemption is clearly expansive, not all state law claims
finding their genesis in labor relations are preempted. See Livadas v. Bradshaw, 512 U.S.
107, 123, 114 S. Ct. 2068, 129 L. Ed. 2d 93 (1994) (Section 301 does not “preempt
nonnegotiable rights conferred on individual employees as a matter of state law . . . .”).
“[I]t is the legal character of a claim, as ‘independent’ of rights under the collective
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bargaining agreement (and not whether a grievance arising from ‘precisely the same set
of facts’ could be pursued) that decides whether a state action may go forward.” Livadas,
512 U.S. at 123-24 (internal citations omitted).
The Sixth Circuit employs a two-step inquiry for determining whether a
claim is sufficiently independent of the collective bargaining agreement to survive
complete preemption under § 301 of the LMRA:
We first look to whether “resolving the state-law claim would require
interpretation of the terms of the collective bargaining agreement,” and,
alternatively, “whether the rights claimed by the plaintiff were created by
the collective bargaining agreement, or, instead, by state law.” Mattis v.
Massman, 355 F.3d 902, 906 (6th Cir. 2004). “In short, if a state-law
claim fails either of these two requirements, it is preempted by § 301.” Id.
This Court has also noted that “where a plaintiff’s state-law claims cannot
be directly connected to the terms of the CBA, they are not preempted,”
and that “merely consulting a CBA in the course of adjudicating state law
claims is not enough.” Valinski v. Edison, 197 [F. App’x] 403, 409 (6th
Cir. 2006).
Klepsky v. United Parcel Serv., Inc., 489 F.3d 264, 269-70 (6th Cir. 2007); see Alongi v.
Ford Motor Co., 386 F.3d 716, 724 (6th Cir. 2004) (citing DeCoe, 32 F.3d at 216).
Plaintiffs posit that they carefully crafted their state law claims to be
wholly independent of the collective bargaining agreement, with any right to damages
flowing exclusively from the memorandum agreement. (Compl. at ¶ 32; Motion to
Remand at 76.) However, before the Court can consider whether plaintiffs’ claims are
independent of the August 4, 2004 collective bargaining agreement, it must answer the
more fundamental question of whether the memorandum agreement should be considered
a collective bargaining agreement, or, at the very least, a “contract[] between an employer
and a labor organization” under the LRMA.
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“Collective bargaining has been defined as bargaining by an organization
or group of workmen on behalf of its members with the employer, as well as the
settlement of disputes by negotiation between an employer and the representative of his
employees.” Thomas v. LTV Corp., 39 F.3d 611, 618 (5th Cir. 1994). “A collective
bargaining agreement is an effort to set forth a whole system of ‘industrial selfgovernment.’” Id. (quoting United Steelworkers v. Warrior & Gulf Navigation Co., 363
U.S. 574, 580, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960)). Generally, such an agreement
covers a broad range of topics important to the workplace and working conditions.
However, even agreements which touch upon less than the “whole system of industrial
self-government” have been treated as “contracts” under § 301 and given preemptive
effect over state law claims.
In Thomas, the court found that an individual attendance agreement
between an employee and his employer was to be analyzed for preemptive purposes just
as if it were a collective bargaining agreement. In reaching this conclusion, the court
noted that the union was aware of the disciplinary proceedings that had precipitated the
attendance agreement and had participated in the presentation of the agreement to
Thomas. Id. Also significant to the court’s determination was the fact that the agreement
required the employee to waive grievance and arbitration proceedings that would have
otherwise been available under the collective bargaining agreement. Id.; accord Davis,
110 F.3d at 249 (employee settlement agreement reinstating employee was merely a rider
to the collective bargaining agreement, and any state law claim based upon it was
completely preempted by § 301).
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Courts have also given preemptive effect to negotiated agreements that
resolve discrete workplace disputes. In Retail Clerks Int’l Ass’n v. Lion Dry Goods, Inc.,
369 U.S. 17, 27-28, 82 S. Ct. 541, 7 L. Ed. 2d 503 (1962), the Supreme Court found that
§ 301 governed a claim that the employer had violated a negotiated agreement resolving a
strike at a plant closure. While the agreement was more limited in scope than a traditional
collective bargaining agreement, it qualified as a “contract” under § 301, conferring
federal jurisdiction over the claim. See, e.g., Hughes v. UAW Local 2255, 131 F. App’x
379, 380 (3d Cir. 2005) (federal law preempted plaintiff’s contract and tort claims
grounded in the breach of a collectively bargained for voluntary retirement program);
Beidleman v. The Stroh Brewery Co., 182 F.3d 225 (3d Cir. 1999) (motion for remand
properly denied where plant closing agreement that ended strike was a labor contract
under § 301).
A common thread running through these cases is the presence of union
negotiation. See, e.g., Retail Clerks Int’l Ass’n, 369 U.S. at 28 (“It is enough that this is
clearly an agreement between employers and labor organizations significant to the
maintenance of peace between them.”); Davis, 110 F.3d at 248 (emphasizing that the
settlement agreement was signed by Davis, the employer, and the union); Beidleman, 182
F.3d at 231 (“the 1985 closing agreement is readily distinguishable from the agreement at
issue in Caterpillar. Most significant, the 1985 closing agreement was bargained for and
negotiated by Stroh and the labor unions . . . .”); Thomas, 39 F.3d at 618 (“it is
undisputed that [the attendance agreement] was negotiated and entered into by LTV, the
UAW, and Thomas”); but see Tazelaar v. Integrated Metal Tech., Inc., File Nos. 1:9010

CV-274, 1:90-CV-321, 1:90-CV-363, 1991 WL 332636, at *6 (W.D. Mich. Apr. 12,
1991) (finding that an employer’s letter making certain promises after the current
bargaining agreement had expired was not a labor contract under § 301 because it was
not the result of negotiations with the union). Union involvement is one of the defining
features that separates labor contracts from those that are wholly independent and not
subject to the LMRA.
This feature of union involvement is clearly present in the memorandum
agreement. The employer and the union were the only parties to the agreement, even
though plaintiffs were third-party beneficiaries. The agreement was the result of
negotiations that addressed an important issue arising out of the employment relationship,
namely, a one-time voluntary separation plan. The agreement even had the effect of
redefining rights under the collective bargaining agreement, as it waived certain rights
guaranteed by the collective bargaining agreement in favor of specific benefits gained
through the one-time opportunity to retire early. See, e.g., Thomas, 39 F.3d at 618. While
it was more limited in scope than a traditional collective bargaining agreement, the
memorandum agreement is certainly the type of labor contract that is contemplated by §
301.
The complaint is clear that plaintiffs’ contract claim is entirely dependent
upon an interpretation of the memorandum agreement, which this Court has determined
is a labor contract under § 301, and the rights claimed by plaintiffs arise solely out of that

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agreement.2 (See Compl. at ¶ 32; Plaintiff’s Motion to Remand at 76.) Because plaintiffs’
contract claim impermissibly looks to state law as an independent source of enforcement
for a labor contract, it is preempted by federal law. See Caterpillar, 482 U.S. at 394.
The same holds true for plaintiffs’ tort claim. A tortious interference with
contractual relations claim is preempted by federal law if the breach of a contract is an
“essential element” of such a state law claim. Fox v. Parker Hannifin Corp., 914 F.2d
795, 800 (6th Cir. 1990). Under Ohio law, the “intentional procurement of the contract’s
breach” is an essential element of a tortious interference with contract claim. Kenty v.
Transamerica Premium Ins. Co., 72 Ohio St. 3d 415, 419 (1995). “‘The elements of
tortious interference with a business relationship are (1) a business relationship, (2) the
wrongdoer’s knowledge thereof, (3) an interference causing a breach or termination of
the relationship, and (4) damages resulting therefrom.’” Harris v. Bornhorst, 513 F.3d
503, 523 (6th Cir. 2008) (quoting McConnell v. Hunt Sports Enters., 132 Ohio App. 3d
657, 689 (Ohio Ct. App. 1999)). The business relationship at issue here, according to the
complaint, is the right to file a claim with the bankruptcy trustee based on plaintiffs’
standing as third-party beneficiaries to the memorandum agreement. (Compl. at ¶ 35.)
This claim, also, depends entirely upon the rights secured under the memorandum
agreement, and is, therefore, preempted.

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To set forth a claim for breach of contract under Ohio law, plaintiffs would have to establish “a contract
existed, the plaintiff[s] performed, the defendant[s] breached, and the plaintiff[s] suffered damages.”
Pavlovich v. Nat’l City Bank, 435 F.3d 560, 565 (6th Cir. 2006) (citing Wauseon Plaza Ltd. Partnership v.
Wauseon Hardware Co., 156 Ohio App. 3d 575 (Ohio Ct. App. 2004)).
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The preemption of plaintiffs’ state law claims by the LMRA provides this
Court with federal question jurisdiction, and, therefore, plaintiffs’ motion to remand is
DENIED.
In Allis-Chalmers, the Supreme Court held that a preempted state-law
claim may be dismissed or adjudicated as a § 301 claim. Alllis-Chalmers, 471 U.S. at
220. Plaintiffs have not pleaded facts sufficient to support a claim under § 301. A hybrid
§ 301 claim has two elements: breach of a collective bargaining agreement by the
employer and breach of the duty of fair representation by the union. See Garrison v.
Casens Transp. Co., 334 F.3d 528, 538 (6th Cir. 2003). Even if plaintiffs’ allegations
could be construed as asserting a claim that defendants violated their duty of fair
representation, plaintiffs have failed to assert any facts supportive of a claim against their
former employer.3 Because plaintiffs’ complaint fails to state a claim under § 301, it is
subject to dismissal. See Simoneau v. GMC, 85 F. App’x 445, 448 (6th Cir. 2003) (A
complaint that fails to allege that the union breached its duty of fair representation “fail[s]
to allege an essential element of a hybrid § 301 claim.”).
Notwithstanding plaintiffs’ emphatic reluctance to assert a claim under
federal law, the Court will, in an abundance of caution, afford plaintiffs leave to amend
their complaint to set forth a claim under the LMRA. However, one observation may be

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Plaintiffs actually emphasize this point in support of their motion to remand. (Motion to Remand at 80
[“Plaintiffs’ former employer is not joined as a defendant as would be required in a ‘hybrid § 301’ action
for breach of a union’s duty of fair representation.”]). While a plaintiff bringing a hybrid § 301 claim may
elect to sue either their employer, or the union, or both, see DelCostello v. Int’l Bhd. of Teamsters, 462 U.S.
151, 165, 103 S. Ct. 2281, 76 L. Ed. 2d 476 (1983), it is clear that plaintiffs never intended to bring such a
claim against either.

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made. It is well settled that a six-month statute of limitation applies to hybrid § 301
claims. See DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 169, 103 S. Ct. 2281, 76
L. Ed. 2d 476 (1983); Garrish v. UAW, 417 F.3d 590, 594 (6th Cir. 2003). Since the
present action was filed in state court several years after the proceedings in bankruptcy
court, relief is time-barred unless plaintiffs did not discover and had no reason to discover
the relevant bankruptcy-related agreement. Nonetheless, rather than rule on an un-briefed
issue, the Court, if necessary, will reserve consideration of the timeliness of any § 301
claim for another day.
III.

CONCLUSION
For all of the foregoing reasons, plaintiffs’ motion to remand is DENIED,

plaintiffs’ breach of contract and tortious interference with contract claims are
DISMISSED, and plaintiffs are afforded fourteen (14) days to file a motion for leave to
amend their complaint, along with a proposed amended complaint. Defendants’ motion to
dismiss, premised on the theory that plaintiffs’ claims were not preempted, is DENIED as
moot. If plaintiffs do not timely file a conforming amended complaint, the Court will
dismiss the action.
IT IS SO ORDERED.
Dated: January 31, 2014
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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