            IN THE COURT OF APPEALS OF TENNESSEE
                        AT NASHVILLE
                                                      FILED
                                                      February 18, 1999

SCOTT BALDWIN, J. L. SMITH, and       )              Cecil Crowson, Jr.
KEVIN T. BROWN, individually and      )             Appellate Court Clerk
on behalf of a class of individuals   )
similarly situated,                   )
                                      )
      Plaintiffs/Appellants,          )   Appeal No.
                                      )   01-A-01-9804-CV-00195
VS.                                   )
                                      )   Davidson Circuit
PIRELLI ARMSTRONG TIRE                )   No. 95C-3232
CORPORATION, UNITED RUBBER,           )
CORK, LINOLEUM AND PLASTIC            )
WORKERS OF AMERICA, AND               )
URW LOCAL UNION 670,                  )
                                      )
      Defendants/Appellees.           )


      APPEALED FROM THE CIRCUIT COURT OF DAVIDSON COUNTY
                   AT NASHVILLE, TENNESSEE

             THE HONORABLE THOMAS W. BROTHERS, JUDGE


FOR APPELLANTS:                           FOR APPELLEE PIRELLI
                                          ARMSTRONG TIRE CORP.:
Jeffrey A. Greene
John W. Barringer, Jr.                    Charles Hampton White
Goodlettsville, Tennessee                 Richard L. Colbert
                                          Nashville, Tennessee
Robert L. Delaney
Nashville, Tennessee                      FOR APPELLEE UNITED RUBBER,
                                          CORK, LINOLEUM and PLASTIC
                                          WORKERS OF AMERICA:

                                          Charles R. Armstrong
                                          Akron, Ohio 44320

                                          FOR APPELLEE URW
                                          LOCAL UNION 670:

                                          George E. Barrett
                                          Phillip A. Purcell
                                          Nashville, Tennessee


                          REVERSED AND REMANDED


                                          BEN H. CANTRELL,
                                          PRESIDING JUDGE, M.S.
                                  OPINION


              When replacement workers were fired to make room for the returning

union employees at the end of a strike, the replacement workers brought suit against

the employer for breach of contract and retaliatory discharge, and against the local

and international unions for intentional interference with their contract. The trial court

granted the employer’s motion to dismiss the breach of contract count, because it

believed the individual contracts had been subsumed into the collective bargaining

agreement, but it overruled the motion to dismiss the retaliatory discharge count. The

court granted the unions’ motion to dismiss, because it believed the complaint did not

state a cause of action for intentional interference with an employment at will contract.

We reverse the judgment of the trial court.



                                            I.

                                     a. The Facts



              Since this case was decided on a motion to dismiss we take the facts

from a liberal construction of the complaint, Huckeby v. Spangler, 521 S.W.2d 568

(Tenn. 1975), and we assume the facts in the complaint are true, Cornpropst v. Sloan,

528 S.W.2d 188 (Tenn. 1975).



              The complaint alleges that Pirelli Armstrong Tire Corporation (Pirelli)

operated a manufacturing plant in Madison, Tennessee where substantially all of the

hourly workers were represented by the United Rubber, Cork, Linoleum and Plastic

Workers Union. The Pirelli workers were members of Local 670. In July of 1994, the

workers went out on strike. Pirelli hired some replacement workers, and after

declaring that the parties had “bargained to an impasse,” the company terminated the

strikers and began to hire “permanent” replacement workers. All the replacement



                                          -2-
workers were hired with an express or implied promise that they would not be

terminated solely to make room for the returning strikers.



              In March of 1995, the union and the company entered into a new

collective bargaining agreement (CBA). The company began to rehire the union

members and, under pressure from the local and the national unions, to fire the

replacement workers for pretextual reasons. Ultimately all of the replacement workers

were fired.



                             b. The Procedural History



              The named plaintiffs brought an action against the company for a breach

of contract and for a retaliatory discharge. The complaint sought to recover treble

damages from the unions for an intentional interference with the plaintiffs’ contract of

employment with the company. See Tenn. Code Ann. § 42-50-109



              The defendants jointly removed the case to the federal district court, but

that court remanded the counts containing the causes of action referred to above.

The defendants then filed motions to dismiss under Rule 12.02(6), Tenn. R. Civ. Proc.

The trial judge overruled the company’s motion to dismiss the retaliatory discharge

claim but granted the motions as to the other counts.



                                          II.

                               Retaliatory Discharge



              We will deal first with the company’s contention that the trial judge erred

in failing to dismiss the claim for retaliatory discharge. The elements of such a cause

of action are fairly simple: “An employment at will relationship; a clear declaration of

public policy which imposes duties on the employee or employer; and discharge of the


                                         -3-
employee for refusing to violate those duties.” Reynolds v. Ozark Motor Lines, Inc.,

887 S.W.2d 822 at 825 (Tenn. 1994). The Reynolds court cited examples of a

retaliatory discharge from other jurisdictions where employees had been fired for:

refusing to commit perjury; refusing to ignore a lawful subpoena; refusing to ignore a

subpoena to jury duty; refusing to falsify records in product labeling; and refusing to

falsely certify that products had been tested when they had not. Id. at 824, citing

Chism v. Mid-South Milling Co., 762 S.W.2d 552 at 556 (Tenn. 1988). Our own cases

have recognized a case of retaliatory discharge where an employee has been fired

for making a workers’ compensation claim, Clanton v. Cain Sloan, 677 S.W.2d 441

(Tenn. 1984), and the legislature has decreed that “no employee shall be discharged

or terminated solely for refusing to participate in, or for refusing to remain silent about,

illegal activities.” Tenn. Code Ann. § 50-1-304.



              In this case the complaint alleges the following facts:

                      As of the filing of this complaint, on information and
              belief, none of the permanent replacement workers hired
              during the strike for hourly-rate positions remain employed
              by PIRELLI.

                     On information and belief, when negotiating the
              new collective bargaining agreement ratified on March 27,
              1995, representatives of PIRELLI, on the one hand, and
              the URW and URW LOCAL 670, on the other hand,
              discussed the issue of whether or not the jobs previously
              vacated by striking URW members and filled by the
              permanent replacement workers could be made available
              to URW members following the end of the strike.

                      In the negotiations that resulted in the new
              collective bargaining agreement ratified on March 27,
              1995, PIRELLI and the URW and URW LOCAL 670
              agreed that all striking members of the URW would be re-
              hired by PIRELLI, despite and with full knowledge of the
              fact that PIRELLI had already hired the permanent
              replacement workers to fill the positions previously
              occupied by striking members of the URW and URW
              LOCAL 670.

                      On information and belief, after the end of the
               strike and through the termination of the permanent
               workers, the URW and URW LOCAL 670 did not permit
               any person they knew to have been a permanent
               replacement worker hired by PIRELLI during the strike to


                                           -4-
             join the URW or URW LOCAL 670 in order to remain
             employed at PIRELLI following the end of the strike.



             In addition, in count one the complaint makes the following allegations:

                    Tennessee is a “right to work” state, in which it is
             contrary to public policy for an employer either to refuse
             to hire or to discharge an employee simply because the
             employee is not a member of a labor union.

                    The “right to work” in Tennessee without being
             compelled to belong to a labor union is a clear public
             policy evidenced by the unambiguous statutory provision
             of T.C.A. § 50-1-201 (1991).

                   PIRELLI’s termination of the permanent
             replacement workers who are members of the Plaintiff
             Class violated the “right to work” public policy of
             Tennessee and was for this reason wrongful.

                  The members of the Plaintiff Class have suffered
             damage as a result of their termination by PIRELLI.

                     The damages suffered by the members of the
             Plaintiff Class include but are not limited to lost wages
             and benefits, consequential damages and emotional
             distress.

                     In terminating the members of the Plaintiff Class,
             PIRELLI acted intentionally, fraudulently, maliciously
             and/or recklessly because PIRELLI knew that it was a
             violation of both Tennessee and federal law to terminate
             employees based on the fact the employees were not
             union members, but nevertheless did so alleging grounds
             for termination which were known to be false in an effort
             to cover up the real (but illegal) reason for termination. As
             a result, PIRELLI is liable for punitive damages.



             As we read the complaint it does not state a claim for a retaliatory

discharge. It does not allege that the replacement workers were fired for refusing to

join the union. The complaint alleges that the union and the company agreed that the

striking employees would be rehired. A necessary consequence of that agreement

was that the replacement workers had to go, but the connection between that fact and

union membership is not stated in the complaint.




                                         -5-
              We take no position on whether the right to work law, Tenn. Code Ann.

§ 50-1-201, creates a private right of action for its violation. The appellants state

emphatically that they are not asserting a cause of action for violating the statute, but

they rely on the statute as a clear statement of public policy on which to base a claim

of retaliatory discharge.



                                          III.

                                 Breach of Contract



              We are of the opinion that the complaint states a cause of action for

breach of contract. A fair reading of the complaint reveals that the plaintiffs alleged

(1) that they were hired with an express or implied promise that they would not be

fired in order to make room for the returning strikers (see paragraphs 41(a) and 54 of

the complaint), and (2) that the company breached that promise when it settled the

strike with the union. The company’s promises were more than a vague promise of

“permanent” employment which creates no more than an employment at will. See

Savage v. Spur Distributing Company, 228 S.W.2d 122 (Tenn. App. 1950).



              The trial judge found, however, that the plaintiffs’ contract with the

company was subsumed into the collective bargaining agreement subsequently

entered into by the company and the union. From a reading of the cases we find that

the courts use that expression to indicate that the individual contracts were displaced

by the subsequent collective bargaining agreement (CBA) or that the dispute was

preempted by federal law.




                             a. The Displacement Issue


                                          -6-
             The only authority cited by either the company or the union that the

individual contracts with the replacement workers were displaced by the CBA is Beals

v. Kiewit Pacific Co., 114 F.3d 892 (9th Cir. 1997). Beals is a preemption case in

which the Ninth Circuit held that an employee could not maintain a state action

seeking to enforce an employment contract entered into when the employer and the

union were operating under an existing CBA. To the extent that the separate contract

was inconsistent with the CBA, “the CBA controls and any claims seeking to enforce

the terms of the [separate contract] are preempted. 114 F.3d at 894.



             The Beals court distinguished Caterpillar, Inc. v. Williams, 482 U.S. 386

(1987), in which the company allegedly entered into agreements with some of its

employees while they were in managerial positions. When the employees were later

downgraded to hourly positions, the company argued that “their individual employment

agreements were subsumed into, or eliminated by, the collective bargaining

agreement.” The court rejected this argument saying:

             Thus, individual employment contracts are not inevitably
             superseded by any subsequent collective agreement
             covering an individual employee, and claims based upon
             them may arise under state law. Caterpillar’s basic error
             is its failure to recognize that a plaintiff covered by a
             collective-bargaining agreement is permitted to assert
             legal rights independent of that agreement, including
             state-law contract rights, so long as the contract relied
             upon is not a collective-bargaining agreement.

482 U.S. at 396.



             Beals distinguished Caterpillar because it involved “an individual

employment contract negotiated for a position not covered by the CBA, at a time when

the employee was not covered by the CBA. 114 F.3d at 894. That is the situation

involved in this case. The appellants negotiated a contract at a time when neither

they nor the company were under a CBA. Therefore, we think the contracts they

negotiated were not subsumed into the subsequent CBA.




                                        -7-
                                   b. Preemption



              For most of the same reasons appearing in the preceding section we

hold that the appellants’ independent contract claims are not preempted by the

National Labor Relations Act (NLRA) nor by Section 301 of the Labor Managment

Relations Act (LMRA). Section 301 preempts state law claims that are based directly

on rights created by a CBA or claims that are substantially dependent on an

interpretation of a CBA. Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987). In Belknap,

Inc. v. Hale, 462 U.S. 491, 498 (1983), the Supreme Court described two doctrines

that determine whether state causes of action are preempted by the NLRA:

              Under the first, set out in San Diego Building Trades
              Council v Garmon, 359 US 236, 3 L Ed 2d 775, 79 S Ct
              773 (1959), state regulations and causes of action are
              presumptively pre-empted if they concern conduct that is
              actually or arguably either prohibited or protected by the
              Act. Id., at 245, 3 L Ed 2d 775, 79 S Ct 773. The state
              regulation or cause or action may, however, be sustained
              if the behavior to be regulated is behavior that is of only
              peripheral concern to the federal law or touches interests
              deeply rooted in local feeling and responsibility. Id., at
              243-244, 3 L Ed 2d 775, 79 S Ct 773; Sears, Roebuck &
              Co. v Carpenters, 436 US 180, 200, 56 L Ed 2d 209, 98
              S Ct 1745 (1978); Farmer v Carpenters, 430 US 290,
              296-297, 51 L Ed 2d 338, 97 S Ct 1056 (1977). In such
              cases, the State’s interest in controlling or remedying the
              effects of the conduct is balanced against both the
              interference with the National Labor Relations Board’s
              ability to adjudicate controversies committed to it by the
              Act, Farmer v Carpenters, supra, at 297, 51 L Ed 2d 338,
              97 S Ct 1056; Sears Roebuck & Co. v Carpenters, 436
              US, at 200, 56 L Ed 2d 209, 98 S Ct 1745, and the risk
              that the State will sanction conduct that the Act protects.
              Id., at 205, 56 L Ed 2d 209, 98 S Ct 1745. The second
              pre-emption doctrine, set out in Machinists v Wisconsin
              Employment Relations Comm’n, 427 US 132, 49 L Ed 2d
              396, 96 S Ct 2548 (1976), proscribes state regulation and
              state-law causes of action concerning conduct that
              Congress intended to be unregulated, id., at 140, 49 L Ed
              2d 396, 96 S Ct 2548, conduct that was to remain a part
              of the self-help remedies left to the combatants in labor
              disputes, id., at 147-148, 49 L Ed 2d 396, 96 S Ct 2548.



In Belknap the court decided that facts remarkably like the facts in this case did not

bring the dispute within either of the NLRA preemption doctrines.


                                         -8-
              We think Caterpillar answers the question of whether this controversy

is preempted by Section 301 of the LMRA. Considering only the allegations in the

amended complaint we see no allegations that the dispute involves rights created by

a CBA, and without the CBA even being in this record we cannot see how the

appellants’ claims involve an interpretation of the CBA.



                                           IV.

                      Interference with Employment Contract



              The trial judge dismissed the tortious interference count because it

believed the appellants’ contract had been subsumed within the CBA negotiated by

the union. On appeal the only argument made by the local union is that one cannot

interfere with a contract to which it is a party. (Citing Forrester v. Stockstill, 869

S.W.2d 328 (Tenn. 1994).



              As we have pointed out, however, this action is not based on the CBA

negotiated by Local 670. And the intentional interference with at-will employment by

a third party without privilege or justification is actionable. Forrester at 330; Ladd v.

Roane Hosiery, Inc., 556 S.W.2d 758 (Tenn. 1977); Dukes v. Brotherhood of Painters,

235 S.W.2d 7 (Tenn. 1950). The allegations in the complaint are sufficient to state

a cause of action against the local union.



              Although the national union argues on appeal that it is a separate entity

from the local union, and that there are no specific allegations against it, the complaint

does specifically refer to the “URW and URW Local 670". In paragraph 61, the

complaint alleges that “The URW and URW Local 670 intended to cause Pirelli to

terminate the employment of all the permanent replacement workers.” The complaint

goes on to allege that both defendants created pressure on Pirelli to terminate the




                                          -9-
appellants (paragraph 65) and that in inducing Pirelli to terminate the appellants, both

defendants acted with malice and fraudulent intent (paragraph 70).



              Whether the appellants can prove any of their allegations remains to be

seen, but at this stage of the litigation, the complaint states a cause of action for

intentional interference with contract against both union defendants.



              The judgment of the court below is reversed as indicated herein and the

cause is remanded to the Circuit Court of Davidson County for further proceedings.

Tax the costs on appeal one-third to the appellants and two-thirds to the appellees.




                                                  _____________________________
                                                  BEN H. CANTRELL,
                                                  PRESIDING JUDGE, M.S.


CONCUR:




_____________________________
WILLIAM C. KOCH, JR., JUDGE




_____________________________
WILLIAM B. CAIN, JUDGE




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