

                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 96-1863
                       THERESA MARTIN,

                    Plaintiff, Appellant,
                              v.

                  SHAW'S SUPERMARKETS, INC.,
                     Defendant, Appellee.

                                         
         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS
     [Hon. Morris E. Lasker,* Senior U.S. District Judge]                                                                    

                                         
                            Before

                     Selya, Circuit Judge,                                                     
                Aldrich, Senior Circuit Judge,                                                         

                  and Boudin, Circuit Judge.                                                       
                                         

Scott W.  Lang with whom Susan  Forgue Weiner and  Lang, Xifaras &amp;                                                                              
Bullard, P.A., Lisa M.  Sheehan, Kate Mitchell &amp; Associates,  Betsy L.                                                                              
Ehrenberg  and Angoff, Goldman, Manning,  Pyle &amp; Wanger,  P.C. were on                                                                      
briefs for appellant.
Betsy  L.  Ehrenberg  with  whom  Harold  L.  Lichten  and Angoff,                                                                              
Goldman,               
Manning,  Pyle &amp;  Wanger,  P.C.  were on  brief  for United  Food  and                                       
Commercial  Workers Local  Union 791  and National  Employment Lawyers
Association, Massachusetts Chapter, Amici Curiae.
Duane R. Batista with whom Sharon  R. Burger and Nutter, McClennen                                                                              
&amp; Fish, LLP were on brief for appellee.                   

                                         

                       January 28, 1997
                                         

                                            

*Of the Southern District of New York, sitting by designation.

     BOUDIN,  Circuit  Judge.     This  case,  presenting   a                                        

difficult  preemption  issue,  began  in  January  1996  when

Theresa   Martin   sued   Shaw's   Supermarkets,   Inc.,   in

Massachusetts state  court for  alleged  violations of  state

employment-compensation laws.   Martin, an employee of Shaw's

since 1979, had injured her back in August 1994 while working

as  a bakery clerk.   In September 1994,  she began receiving

workers'   compensation   benefits   for    temporary   total

disability.  Mass. Gen. Laws ch. 152,   34.

     In March 1995, Shaw's requested that Martin's physician,

Dr.  James Coleman, establish any necessary work restrictions

for  Martin.    Coleman  gave   Shaw's  a  list  of  physical

restrictions and  indicated that Martin could  return to work

if  these restrictions  were  respected.   Shaw's then  asked

Martin  to  see  a  second  doctor.    Based  on  the  second

examination, Shaw's  offered  Martin four  weeks of  modified

duty, to be followed by return to her former position without

restrictions.

     Martin did not  return to  work.   Instead, through  her

attorney,  she  again  asked   for  a  position  fitting  the

restrictions  set  by Coleman.    Shaw's  responded by  again

offering  Martin  her former  position with  no restrictions.

When  discussion failed  to resolve  the matter,  Shaw's sent

Martin  a letter in September 1995 informing her that she was

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terminated.    The  letter  referred to  Shaw's  "policy  and

contract language concerning extended periods of absence."

     On  October 19,  1995,  Martin reapplied  for  full-time

employment with  Shaw's, requesting  a  position with  duties

modified as Coleman had recommended.  Shaw's did not respond.

Later in the month,  Martin's union filed a grievance  on her

behalf under its collective bargaining agreement with Shaw's,

alleging  that  Martin  had  been   unjustly  terminated  and

requesting her reinstatement with reasonable accommodations.

     Three months  later, Martin filed the  present action in

Massachusetts  state court, claiming that Shaw's had violated

Mass. Gen. Laws ch. 152,    75A, 75B(2), by failing to rehire

her.  These sections  provide, respectively, that an employee

who lost  her job as a  result of compensable injury  must be

given rehiring  preference by  the former employer  over non-

employee  applicants, id.    75A,  and that  no employer  may                                     

refuse  to hire an  employee because she  asserted a workers'

compensation  claim, id.    75B(2).   Martin's  suit did  not                                    

contest Shaw's right to discharge her  in the first instance.

     In  March 1996,  Shaw's  removed the  action to  federal

court,  premising jurisdiction  under 28  U.S.C.   1331,  and

moved to dismiss,  Fed. R.  Civ. P. 12(b)(6).   The  district

court  granted Shaw's motion,  agreeing that  Martin's claims

were  preempted  by  section  301  of  the  Labor  Management

Relations  Act, 29  U.S.C.   185.   Martin  now  appeals this

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ruling.   The  sole issue  on appeal  is whether  section 301

preempts Martin's state-law claims.1 

     Section  301 modestly  provides  only that  "[s]uits for

violation  of  contracts  between  an employer  and  a  labor

organization representing employees  . . . may  be brought in

any district  court of the United  States having jurisdiction

of the  parties . . . ."   29 U.S.C.   185.  But jurisdiction

begat substantive  authority.  In Textile  Workers v. Lincoln                                                                         

Mills, 353 U.S. 448, 451 (1957), the Supreme Court ruled that                 

this section "authorizes federal courts to  fashion a body of

federal   law  for  the  enforcement  of  .  .  .  collective

bargaining agreements."

     In turn, substantive authority  gave rise to preemption.

In Teamsters v. Lucas Flour Co., 369 U.S. 95, 103 (1962), the                                           

Supreme Court  held that state  law is displaced  when courts

are   "called  upon   to   enforce"   collective   bargaining

agreements, because  those agreements should  be governed  by

federal  doctrine,  rather  than varying  state  contract-law

principles.  Then, two decades later,  the Supreme Court said

that  "the pre-emptive  effect of     301 must  extend beyond

[state-law]  suits  alleging  contract violations."    Allis-                                                                         

Chalmers Corp. v. Lueck, 471 U.S. 202, 210 (1985).                                   

                                                    

     1The   asserted   jurisdictional  basis   for  removal--
preemption--might appear to offend the well-pleaded complaint
rule,  but where  section  301 preemption  is concerned,  the
Supreme Court has  held that removal is proper.   Caterpillar                                                                         
Inc. v. Williams, 482 U.S. 386, 393-94 (1987).                            

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     Just how  far beyond  has never been  precisely settled.

Allis-Chalmers  preempted  a  state-law  tort  claim  closely                          

relating  to the  handling  of a  labor-agreement  grievance.

Shortly thereafter the Court declared that state-law claims--

seemingly  of  whatever  character--are  preempted   if  they

"require  construing  the  collective-bargaining  agreement."

Lingle v. Norge  Div. of Magic Chef, Inc.,  486 U.S. 399, 407                                                     

(1988).    Yet recently,  the  Supreme  Court cautioned  that

section 301 "cannot be read broadly to pre-empt nonnegotiable

rights conferred on individual employees as a matter of state

law."  Livadas v. Bradshaw, 114 S. Ct. 2068, 2078 (1994).                                      

     Nevertheless, Livadas  repeated the basic test laid down                                      

by  Lingle--namely, that  section  301  preempts a  state-law                      

claim wherever a  court, in passing upon  the asserted state-

law  claim,  would  be  required  to  interpret  a  plausibly

disputed  provision of  the collective  bargaining agreement.

Id.  At first blush,  this might seem a puzzling test:   both               

state and federal courts have authority to enforce collective

bargaining agreements,  and so to interpret their provisions.

See  Charles  Dowd Box  Co. v.  Courtney,  368 U.S.  502, 506                                                    

(1962).

     The explanation  lies in the Supreme  Court's concern to

enforce arbitration clauses, almost always a feature of labor

contracts.  If judges construed labor agreements in the first

instance, the  Court believed  that  the arbitration  process

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would be undermined, and there might be divergent readings of

the  labor  agreement  and  interference  with the  grievance

process itself.  Livadas, 114 S. Ct. at 2078; Allis-Chalmers,                                                                        

471 U.S. at  219.  Such  an arbitration clause is  present in                              

this case.

     We thus begin  by asking, as we  have done in the  past,

e.g., Quesnel v. Prudential  Ins. Co., 66 F.3d 8,  10-11 (1st                                                 

Cir.  1995),  whether  resolution  of Martin's  claims  would

require  an  interpretation   of  the  collective  bargaining

agreement.    Our   premise  is  that   this  means  a   real                                                                         

interpretive  dispute  and not  merely  a pretended  dispute.

Indeed,  the Supreme Court has  said that the  need merely to

refer  in  passing  to  the agreement  will  not  necessarily

preempt.  Livadas, 114 S. Ct. at 2078.                             

     Martin  has alleged  violations of  Mass. Gen.  Laws ch.

152,     75A, 75B(2).   Section  75A creates  a  priority for

rehiring:

     Any  person who has  lost a job  as a result  of an
     injury  compensable  under  this  chapter  shall be
     given preference in hiring by the employer for whom
     he worked  at the  time of compensable  injury over
     any  persons not  at  the time  of application  for
     reemployment employed by  such employer;  provided,
     however, that a suitable job is available.

The   relevant  portion  of  section  75B(2)--a  conventional

prohibition against retaliation--states that "[n]o employer .

.  . shall  . .  .  refuse to  hire  or in  any other  manner

discriminate against  an employee  because  the employee  has

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exercised  a  right afforded  by this  [workers compensation]

chapter."  

     If the statutes stopped here,  this might be a different

case.   But  both statutory sections  also contain  a proviso

that "[i]n the event any right  set forth in this section  is

inconsistent   with   an  applicable   collective  bargaining

agreement," the agreement shall prevail.  Id.    75A, 75B(3).                                                         

Shaw's  argues that  both  of Martin's  statutory claims  are

inconsistent with  the  labor agreement;  that resolution  of

this  "inconsistency" charge  requires interpretation  of the

agreement; and that the  claims are therefore preempted under

the Supreme Court's own rubric.

     It is  very doubtful  whether, without  this last-quoted

proviso,  Shaw's would  have any  plausible claim  of federal

preemption.    Massachusetts has  an independent  interest in

regulating  injury compensation; and  apart from the proviso,

the elements of both Martin's  state-law claims appear to  be

independent  of bargaining  agreement provisions.   There are

other types of labor preemption, apart from Lingle's "require                                                              

construing" test,2  but Shaw's  does not argue  that Martin's

state claims would be preempted absent the proviso.

                                                    

     2Broadly speaking, most cases of preemption in the labor
field involve  conflict, or potential conflict, between state
law and federal  labor policy.   But  sometimes the  conflict
arises out of some source other than the need to  interpret a
labor  agreement.   E.g.,  Livadas;  San  Diego Bldg.  Trades                                                                         
Council v. Garmon, 359 U.S. 236 (1959).                             

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     Rather, Shaw's argues that Massachusetts has as a matter

of  state law chosen to make the substantive rights conferred                                

by the  statutes depend  upon their not  being "inconsistent"

with  a labor  agreement.   This court  endorsed just  such a

reading  of the proviso of section 75B, which is identical in

substance to the provision of section 75A, in Magerer v. John                                                                         

Sexton &amp;  Co., 912  F.2d 525, 529-30  (1st Cir.  1990).   And                         

Magerer merely holds Massachusetts  to the literal wording of                   

its own statute.

     The question  remains whether Shaw's  labor agreement is

colorably  inconsistent  with   Martin's  state-law   claims.

Shaw's best argument rests  upon the agreement's  "management

rights" clause, which states that Shaw's has the "sole  right

to manage its business including . .  . the right[] . . .  to

hire, assign and promote Employees."  Shaw's says that Martin

is  a  former  employee  seeking  to  be  rehired,  that  the

agreement regulates  this  subject (but  not  in a  way  that

protects Martin in this case), and that in all other respects

the union has  agreed to management's  right to choose  which

former employees to rehire.

     Martin  responds  that  the "management  rights"  clause

cannot be inconsistent with her state-law claims in this case

because  she is no longer covered  by the agreement.  Yet the

agreement  does give  former  Shaw's employees  some specific

priority  rights to  be rehired.   See  Collective Bargaining                                                  

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Agreement Art. 12(B)  ("Full-time employees laid off  because

of lack of  work when  no other full-time  work is  available

shall be offered  part-time work  [if available] .  . .  .").

And  the "management  rights"  clause by  its terms  embraces

decisions as to hiring.

     Martin   next  says   that   Shaw's  employee   handbook

guarantees  to her  the very  right to  priority  in rehiring

established  by  section  75A.   The  handbook  does  contain

language  that  is  fairly  close to  the  rehiring  priority

contained  in  section  75A,  suggesting  that  Shaw's itself

treats  this  priority right  (although  not necessarily  the

protection  against  retaliation)   as  consistent  with  its

"management rights"  clause.  But for  purposes of construing

the "management  rights" clause,  the handbook  is at  best a

gloss.  

     Whether the handbook does constitute a gloss and, if so,

what weight it should be given are issues of interpreting the

collective bargaining  agreement.    The  handbook  may  well

weaken Shaw's reliance on the "management rights" clause; but

the  handbook may simply be  a reference to  state law, whose

application  Shaw's   has  now  rethought  in   the  face  of

litigation.    To entertain  Martin's state-law  claims would

still require  a court to  interpret the agreement,  which is

precisely    what    Supreme    Court   precedents    forbid.

Accord Magerer, 912 F.2d at 530.                          

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     Martin next asserts that  any waiver of statutory rights

by  a  union  and   management  in  a  collective  bargaining

agreement must be "clear and unmistakable."  See Livadas, 114                                                                    

S. Ct. at  2079 (citations omitted).   But Shaw's  preemption

claim  does   not  depend   upon  a  "waiver"   of  statutory

protections; indeed,  it is  unclear under  Massachusetts law

that the statutory protections  can be "waived."  Cf.   Mass.                                                                 

Gen. Laws ch. 152,    75B(3) (limiting waiver).   Rather, the

statutes  themselves expressly  withhold protection  where it

would   be  "inconsistent"  with  labor  agreements,  without

requiring the inconsistency to be "clear and unmistakable."

     We conclude  that under Supreme Court  and First Circuit

precedent, Martin's state law claims are preempted.  This  is

not   because   the   collective   bargaining   agreement  is                                                                         

inconsistent with  the state claims asserted,  but because it

may be so  and requires interpretation.   We could  ourselves               

remove the doubt by interpreting the agreement one way or the

other, but  this course has  been foreclosed in  deference to

the arbitration clause.   As  all of this  appears to  follow

logically,  the question  remains  why the  outcome may  seem

faintly troubling.

     One  reason  is that  Massachusetts'  statutory proviso,

making  the  rights  conferred  yield  to inconsistent  labor

agreements,   may  be   producing   some  results   that  the

legislature  did not intend.   When the statutes were enacted

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in December  1985, Massachusetts might have  thought that the

proviso  was necessary to  avoid preemption;  the legislature                                            

might  be   chagrined  to  discover  that   the  proviso  has

unnecessarily curtailed workers' rights.  But this is at best

a  debatable  inference,3  and   we  have  found  no  helpful

legislative history. 

     Possibly, the proviso could be construed to require more

than  mere inconsistency.  Or  a state court  could hold that

the rights conferred yield only to highly specific provisions

in a labor agreement and not to a generic "management rights"

clause.  But both readings would ignore the explicit language

of the proviso.  Perhaps the state did intend to defer to the

labor agreement even where it assisted the employer.  Despite

the clear warning sent by  Magerer in 1990, Massachusetts has                                              

not chosen to amend the statutes.

     The  other reason why the  outcome may seem troubling is

that it could result in Martin having no claim at all against

Shaw's,  even for  retaliation.   This charge is,  of course,

merely  an  allegation;  but  even  if   it  proved  to  have

substance, it  would be  preempted because of  the collective

                                                    

     3Shortly  before  the  legislature acted  in  1985,  the
Supreme  Court made clear that section 301 does not "give the
substantive  provisions  of private  agreements the  force of
federal  law,  ousting  any  inconsistent  state regulation."
Allis-Chalmers, 471 U.S. at 212.   See also Metropolitan Life                                                                         
Ins.  Co.  v.  Massachusetts,  471 U.S.  724,  755-56  (1985)                                        
(holding that state mandated-benefits laws were not generally
preempted).

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bargaining  agreement,  and  yet  the  agreement  may  itself

provide no  remedy.   Preemption sometimes does  result in  a

complete denial of remedies for obvious wrong, e.g., Smith v.                                                                      

Dunham-Busch, Inc., 959 F.2d  6, 11 (2d Cir. 1992),  but this                              

is not a result one eagerly embraces.  

     Various possibilities may cushion  this outcome.  If the

employee  handbook is  a gloss  on the  collective bargaining                                 

agreement,  perhaps  the language  already mentioned  may not

only  defeat the  "management rights"  defense but  also give

rise to affirmative obligations  on the part of  the employer

enforceable through  arbitration.   Or,  perhaps  arbitration

would yield a definitive  ruling that the "management rights"

clause,  and any other clause  relied upon by  Shaw's, is not

"inconsistent" with  the rights  contingently secured  by the

statutes.  

     If all  else  fails,  the union  is  free  to  negotiate

language that eliminates this issue  the next time it  renews

its  labor  agreement.     The  parties  entered  the current

agreement in 1994,  well after Magerer  was decided, but  the                                                  

absence of such language  in the present agreement may  be an

oversight.  All that  it would take to prevent  preemption is

an explicit  provision stating that nothing  in the agreement

is intended to create management rights inconsistent with any

workers' rights under sections 75A and 75B.

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     Finally, in a reply  brief, Martin and her  union (which

appears as an amicus  and has ably supported Martin)  offer a

preemption  claim of their own.   They say  that a discharged

non-union  worker could invoke the Massachusetts statutes and

that  by allowing  the  collective  bargaining  agreement  to

extinguish   Martin's   rights,  the   Massachusetts  proviso

discriminates against  members or  former members  of unions,

thereby  offending federal  labor  policy.   This, they  say,

Livadas itself forbids.                   

     Livadas  struck down  a  state  administrative  practice                        

because it effectively discriminated against union members as

compared  with   non-members,  114  S.  Ct.   at  2074-75,  a

preemption theory that  has nothing to  do with section  301.

On the reasoning of Livadas, Massachusetts arguably could not                                       

provide  that  a  rehiring   priority,  or  a  claim  against

retaliation, would be made available only to workers who were

not  members of  a union.   But  here Massachusetts  has done

nothing of the kind.

     Instead, the  proviso in  question permits the  union on

behalf of its members to craft its own regime (the agreement)

and  in it,  either to  preserve or  displace another  regime

(specified provisions of  state law).   Viewed in the  large,

there  is no discrimination  whatever against  union members;

Massachusetts  simply allows  the  union to  negotiate for  a

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different  package of benefits.  Next time, as we have noted,

the union is free to bargain differently.

     Affirmed.                         

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