                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


2-11-2004

St Thomas St John v. Gov of VI
Precedential or Non-Precedential: Precedential

Docket No. 02-3621




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"St Thomas St John v. Gov of VI" (2004). 2004 Decisions. Paper 958.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/958


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PRECEDENTIAL                               (D.C. Civil Action No. 99-cv-00054)
   UNITED STATES COURT OF                  District Judge: Honorable Thomas K.
           APPEALS                                         Moore
    FOR THE THIRD CIRCUIT
           ________                             Argued on April 28, 2003
          No: 02-3621
                                          Before: ROTH, MCKEE and COWEN
                                                    Circuit Judges
THE ST. THOMAS - ST. JOHN HOTEL
              &                           (Opinion filed February 11, 2004)
  TOURISM ASSOCIATION, INC.;
   THE ST. THOMAS - ST. JOHN             Iver A. Stridiron
          CHAMBER OF                     Attorney General
  COMM ERCE, INC. and THE ST.
    CROIX HOTEL & TOURISM                Elliott M. Davis
       ASSOCIATION, INC.,                Solicitor General

                   Appellants            Carol S. Moore
                                         Assistant Attorney General
                                         Department of Justice
                   v.                    48B-50C Kronprindsens Gade
                                         GERS Building, 2 nd Floor
 GOVERNM ENT OF THE UNITED               Charlotte Amalie
             STATES                       St. Thomas, USVI 00802
    VIRGIN ISLANDS BY AND
           THROUGH                       Kathleen Navin, Esquire (Argued)
      THE VIRGIN ISLANDS                 Legal Services of Virgin Islands
         DEPARTMENT                      3017 Estate Orange Grove
OF LABOR; ELECUTERIA ROBERTS             Christiansted
 IN HER OFFICIAL CAPACITY AS             Saint Croix, USVI, 000820
             ACTING
 COMM ISSIONER OF THE VIRGIN                   Counsel for Appellees
            ISLANDS
    DEPARTMENT OF LABOR                  Charles E. Engeman, Esquire (Argued)
                                         David J. Comeaux, Esquire
ESLA HUGGINS, LADIAH WHYTE,              Ogletree, Deakins, Nash, Smoak &
       (Intervenor in D.C.)              Stewart, LLC
                                         1336 Beltjen Road, Suite 202
                                         Charlotte Amalie
                                         St. Thomas, USVI 00802
 Appeal from the District Court of the
           Virgin Islands                      Counsel for Appellants
                                                  employer or renders him a
                                                  rival of his employer;
              OPINION
                                                  (2) whose insolent or
                                                  offensive conduct towards a
ROTH, Circuit Judge                               customer of the employer
                                                  injures the em ployer’s
        This appeal presents the question         business;
whether the Virgin Islands Wrongful
Discharge Act (WDA), 24 V.I. Code Ann.            (3) whose use of intoxicants
§§ 76-79 is preempted by the National             or controlled substances
Labor Relations Act (NLRA), 29 U.S.C.             interferes with the proper
§§ 151-169, and, if not, whether the              discharge of his duties;
application of the WDA to supervisors is
preempted by the NLRA. A prior panel of           (4) who wilfully and
this Court addressed the first issue at the       i n t e n t i o n a l l y d i s o b e ys
preliminary injunction phase and decided          reasonable and lawful rules,
that the WDA was not preempted. We                orders, and instructions of
adhere to that decision. The prior panel          the employer; provided,
left open the second issue. On remand, the        however, the employer shall
District Court held that the NLRA does not        not bar an employee from
preempt the application of the WDA to             patronizing the employer’s
supervisors. This appeal followed.                business after the
                                                  employee’s working hours
   I. Facts and Procedural History                are complete;

        In 1986, the Virgin Islands               (5) who performs his work
legislature enacted Section 76 of the             assignments in a negligent
WDA, which limited the grounds upon               manner;
which an employer may terminate an
employee.      The statute provided, in           (6) wh ose c onti nuous
relevant part, as follows:                        absences from his place of
                                                  em ploym ent affect the
       (a) Unless modified by                     interests of his employer;
       contract, an employer may
       dismiss an employee:                       (7) who is incompetent or
                                                  i n e fficient, t h e r e by
       (1) who engages in a                       impairing his usefulness to
       business which conflicts                   his employer;
       with his duties to his

                                              2
      (8) who is dishonest; or                          In 1996, the Virgin Islands
                                                legislature amended the first sentence of
      (9) whose conduct is such                 subsection (a) of the statute to state
      that it leads to the refusal,             “[u]nless modified by union contract . . ..”
      reluctance or inability of                24 V.I. Code Ann. § 76 (1996) (emphasis
      other employees to work                   added). This amended provision has been
      with him.                                 interpreted to apply to all employees in the
                                                Virgin Islands, absent a collective
      ****                                      bargaining agreement setting discharge
                                                terms to the contrary. See St. Thomas–St.
      (c) Any employe e                         John Hotel & Tourism Ass’n, Inc. v. Gov’t
      discharged for reasons other              of the U.S. Virgin Islands, 218 F.3d 232,
      t h a n t h o s e stated in               236 (3d Cir. 2000) (Hotel Association II).1
      subsection (a) of this section
      shall be considered to have                      On April 5, 1999, the St.
      been wrongfully discharged;               Thomas–St. John Hotel & Tourism
      however, nothing in this                  Association, Inc., the St. Thomas–St. John
      section shall be construed as             Chamber of Commerce, Inc., and the St.
      prohibiting an employer                   Croix Hotel & Tourism Association, Inc.
      f r o m t e r m i n a ti n g a n          (collectively the “associations”) filed this
      employee as a result of the               action in the District Court of the Virgin
      c e ssati o n o f b u s i ness            Islands against the Government of the
      operations or as a result of a            Virgin Islands, the Virgin Islands
      general cutback in the work               Department of Labor, and the Acting
      force due to economic                     Commissioner of the Department of
      hardship, or as a result of
      the employee’s participation
      in concerted activity that is                1
                                                     In 2000, the Virgin Islands
      not protected by this title.
                                                Legislature amended the definition of
                                                “employee” under the WDA to exclude
24 V.I. Code Ann. § 76 (1986). Any
                                                “any person employed in a bonafide
employee covered by the WDA and
                                                position in an executive or professional
discharged in violation of Section 76 may
                                                capacity.” See St. Thomas–St. John
file an administrative complaint with the
                                                Hotel & Tourism Ass’n, Inc. v. Gov’t of
Commissioner of Labor, who has the
                                                the U.S. Virgin Islands, 216 F. Supp. 2d
authority to order reinstatement and back
                                                460, 462 (D.V.I. 2002) (Hotel
pay. 24 V.I. Code Ann. § 77. In addition,
                                                Association III). The issue of the
an employee may file a lawsuit for
                                                coverage under the WDA of supervisory
compensatory and punitive damages. 24
                                                employees who are not executives or
V.I. Code Ann. § 79.
                                                professionals is still, however, before us.

                                            3
Labor, seeking to restrain the enforcement               statutory protections through
of the WDA in any pending or future                      the terms of the collective
WDA wrongful discharge proceeding.                       bargaining agreement.
Elsa Huggins and Ladiah Whyte, two
employees who have WDA claims pending             Hotel Association II, 218 F.3d at 245.
before the Department of Labor,                   However, in Hotel Association II, the
intervened as additional defendants. The          Court expressly left open the issue whether
associations alleged that the WDA was             the WDA, as applied to supervisors, was
preempted by the NLRA and deprived                preempted by the NLRA. In remanding
them of federal rights in violation of 42         the case to the District Court to grant
U.S.C. § 1983. They sought declaratory            summary judgment to the defendants on
and injunctive relief under the Declaratory       the issue of general preemption, we noted
Judgment Act, 28 U.S.C. §§ 2201, 2202,            that “there remains for decision by the
injunctive relief under 42 U.S.C. § 1983,         District Court the associations’ claim that
and attorney’s fees under 42 U.S.C. § 1988        the WDA should not be applied to
and 5 V.I. Code Ann. § 541.                       supervisors.” Id. at 246.

       Following a hearing, the District                 On remand, the District Court
Court concluded that the plaintiffs were          denied the associations’ motion for
likely to succeed on the merits of their          summary judgment on the question
preemption claim and issued a preliminary         whether the NLRA preempts the WDA as
injunction. See St. Thomas–St. John Hotel         applied to all employees. Following
& Tourism Ass’n, Inc. v. Gov’t of the U.S.        supplemental briefing, the District Court
Virgin Islands, Civ. No. 1999-54, 1999            held that the NLRA does not preempt
WL 376873 (D.V.I. June 3, 1999) (Hotel            application of the WDA to supervisors and
Association I). We reversed, holding that:        granted defendants’ motion for summary
                                                  judgment as to all claims.         See St.
       the WDA is not preempted                   Thomas–St. John Hotel & Tourism Ass’n,
       by the NLRA even though it                 Inc. v. Gov’t of the U.S. Virgin Islands,
       provides an opt-out by                     216 F. Supp. 2d 460, 466-68 (D.V.I. 2002)
       express terms of union                     (Hotel Association III).2 Plaintiffs timely
       contract. . . . [T]he WDA
       does not force an employee
       to choose between collective                  2
                                                      The District Court also held that
       b a r g a i n in g a n d t h e
                                                  supervisors are covered by the WDA
       protections of state law;
                                                  because supervisors are employees under
       rather, it protects all Virgin
                                                  24 V.I. Code Ann. § 62. See Hotel
       Island employees, but gives
                                                  Association III, 216 F. Supp. 2d at 463-
       employees the option of
                                                  64. Since plaintiffs do not appeal this
       relinquishing the territorial
                                                  issue, we do not address it.

                                              4
appealed.3                                         all Employees:

  II. Jurisdiction and Standard of                        We decline the associations’
Review                                             request that we reconsider the prior panel’s
                                                   holding in Hotel Association II regarding
        The District Court had jurisdiction        preemption of the WDA as applied to all
over this federal question pursuant to 28          employees. Under the law of the case
U.S.C. § 1331. We have jurisdiction over           doctrine, “one panel of an appellate court
the District Court’s final order pursuant to       generally will not reconsider questions that
28 U.S.C. § 1291. We exercise plenary              another panel has decided on a prior
review over a grant of summary judgment.           appeal in the same case. The doctrine is
Chisolm v. McManimon, 275 F.3d 315,                designed to protect traditional ideals such
321 (3d Cir. 2001). Summary judgment is            as finality, judicial economy and
appropriate if there is no genuine issue of        jurisprudential integrity.” In re City of
material fact and the moving party is              Philadelphia Litig., 158 F.3d 711, 717-18
entitled to judgment as a matter of law.           (3d Cir. 1998).
Fed. R. Civ. P. 56(c); Anderson v. Liberty
Lobby Inc., 477 U.S. 242, 250 (1986).                     However, as this Court recognized
                                                   in Council of Alternative Political Parties
           III. Discussion                         v. Hooks, “‘while the law of the case
1. Preemption of the WDA as Applied to             doctrine bars courts from reconsidering
                                                   matters actually decided, it does not
                                                   prohibit courts from revisiting matters that
   3                                               are avowedly preliminary or tentative.’”
    We note with great concern that the
                                                   179 F.3d 64, 69 (3d Cir. 1999).
Government of the United States Virgin
                                                   Preliminary injunctions are, by their
Islands, the Virgin Islands Department of
                                                   nature, tentative and impermanent. See
Labor, and the Commissioner of the
                                                   R.R. Yardmasters of Am. v. Pennsylvania
Department of Labor did not see fit to
                                                   R.R. Co., 224 F.2d 226, 229 (3d Cir.
send an attorney to oral argument of this
                                                   1955). Thus:
appeal before us. The only defendants
who were represented at oral argument
                                                          The purpose of a
were the intervenors, but their attorney
                                                          preliminary injunction is
admitted that the intervenors were not
                                                          merely to preserve the
supervisors. Nevertheless, despite the
                                                          relative positions of the
intervenors’ lack of standing to address
                                                          parties until a trial on the
the issue of the status of supervisors, we
                                                          merits can be held. Given
permitted them to present argument in
                                                          this limited purpose, and
support of the government’s position in
                                                          given the haste that is often
light of the need to have a full discussion
                                                          necessary if those positions
of this important issue.

                                               5
       are to be preserved, a                      2. Preemption of the WDA as Applied to
       preliminary injunction is                   Supervisors:
       customarily granted on the
       basis of procedures that are                       Turning to the issue left open by
       less formal and evidence                    Hotel Association II, we hold that the
       that is less complete than in               District Court in Hotel Association III
       a trial on the merits. A party              erred in concluding that the WDA , as
       thus is not required to prove               applied to supervisors, is not preempted by
       his case in full at a                       the NLRA. The Supremacy Clause of the
       p r e limina ry-injuncti o n                United States Constitution provides that
       hearing, and the findings of                the laws of the United States “shall be the
       fact and conclusions of law                 supreme Law of the Land . . . any Thing in
       made by a court granting a                  the Constitution or Laws of any State to
       preliminary injunction are                  the Contrary notwithstanding.”         U.S.
       not biding at trial on the                  Const. Art. VI, cl. 2. This principle
       merits.                                     applies to the laws of the Virgin Islands
                                                   through the Revised Organic Act, which
Univ. of Texas v. Camenisch, 451 U.S.              authorizes the Virgin Islands legislature to
390, 395 (1981).                                   enact territorial laws that are “not
                                                   inconsistent with . . . the laws of the
       Nevertheless, under this standard           United States made applicable to the
for preliminary matters, the plaintiffs have       Virgin Islands . . . .” 48 U.S.C. § 1574(a).
pointed to no adequate reason for                  Under this Clause:
departing from the holding in Hotel
Association II. There is no intervening                   The Supreme Court has
new facts or law. See In re City of                       recognized three general
Philadelphia Litig., 158 F.3d at 718. Nor                 ways in which federal law
was the earlier decision so clearly                       may preempt, and thereby
erroneous that it would create a manifest                 displace, state law: 1)
injustice. See id. Finally, the plaintiffs                “ e x p r e s s p re e m pt i o n ,”
have not pointed to anything about the                    which arises when there is a
more informal procedure of determining                    a n e x p l i c i t st a t u to r y
whether to grant or deny a preliminary                    command that state law be
injunction that resulted in an erroneous                  displaced, see Morales v.
decision. See Camenisch, 451 U.S. at 395.                 Trans World Airlines, Inc.,
Therefore, this panel adheres to the                      504 U.S. 374 (1992); 2)
decision in Hotel Association II that the                 “field preemption,” which
WDA, as applied to employees, is not                      arises when federal law “so
preempted by the NLRA.                                    thoroughly occupies a
                                                          legislative field as to make

                                               6
      reasonable the inference that                       Section 14(a) of the NLRA
      Congress left no room for                    provides that “no employer . . . shall be
      the states to supplement it,”                compelled to deem individuals defined
      Cipollone v. Liggett Group,                  herein as supervisors as employees for the
      Inc., 505 U.S. 504, 516                      purpose of any law, either national or
      (1992) (internal quotation                   local, relating to collective bargaining.”
      omitted); and 3) “conflict
      preemption,” which arises
      when a state law makes it
                                                   law preemption principles set forth in
      impossible to comply with
                                                   San Diego Building Traders Council v.
      both state and federal law or
                                                   Garmon, 359 U.S. 236 (1959) and
      when state law “stands as an
                                                   International Ass’n of Machinists v.
      obstacle          to     the
                                                   Wisconsin Employment Relations
      acco mp lishment and
                                                   Comm’n, 427 U.S. 132 (1976). See
      execution of the full purpose
                                                   Hotel Association III, 216 F. Supp. 2d at
      and objectives of Congress,”
                                                   465 n. 4. Garmon preemption displaces
      Hines v. Davidowitz, 312
                                                   state jurisdiction over conduct which is
      U.S. 52, 67 (1941).
                                                   “arguably within the compass of § 7 or §
Hotel Association II, 218 F.3d at 238.
                                                   8 of the Act.” Hotel Association II, 218
                                                   F.3d at 239 (quoting Garmon, 359 U.S.
       Since the NLRA does not contain
                                                   at 246). Machinists preemption is a form
an express preemption provision and it
                                                   of conflict preemption under which state
regulates an area traditionally regulated by
                                                   regulation of the bargaining conduct of
the states, there is a presumption that
                                                   private parties is displaced because it
Congress did not intend to displace state
                                                   conflicts with the purpose of Congress in
law. See id. Thus, state law will not be
                                                   enacting the NLRA to leave that conduct
preempted by the NLRA unless the state
                                                   “to be controlled by the free play of
law conflicts with the NLRA’s express
                                                   economic forces.” Id. (quoting
provisions or underlying goals and
                                                   Machinists, 427 U.S. at 140). However,
policies. See id. A state or territorial law
                                                   while the subspecies of Garmon and
conflicts with the NLRA if it stands as an
                                                   Machinists preemption often are invoked
obstacle to the accomplishment and
                                                   in connection with the NLRA, the field
execution of the full purposes and
                                                   of labor law also is subject to the general
objectives of Congress. See id.4
                                                   preemption principles outlined above.
                                                   See id. Thus, the issue in the present
                                                   case is whether, under general principles
   4
    The District Court in Hotel                    of conflict preemption, the WDA
Association III correctly recognized that          conflicts with the NLRA. See id.;
the proper analysis in this case is not            Livadas v. Bradshaaw, 512 U.S. 107, 120
guided by the two dominant federal labor           (1994).

                                               7
29 U.S.C. § 164(a). The purpose of this              supervisory employees were organized,
section is to redress a perceived imbalance          disciplinary slips fell off by two thirds and
in labor-management relationships that               the accident rate doubled. Id. at 661
arose from putting supervisors in the                (quoting S.Rep. No. 105 at 3, 4).
position of serving two masters with
opposing interests, namely their employer                   Turning then to the territorial law
and their union. See Beasley v. Food Fair            before us, if the WDA is applied to
of North Carolina, 416 U.S. 653, 657                 supervisors, the only way for an employer
(1974). The Supreme Court in Beasley                 to alter or expand the WDA’s nine
recognized that “‘Congress’ propelling               enumerated grounds for terminating a
intention [in enacting Section 14(a)] was            supervisor/employee would be to enter a
to relieve employers from any compulsion             “union contract” with the supervisor. But
under the Act and under state law to                 the qualities an employer looks for in
countenance or bargain with any union of             supervisors are not the same as those an
supervisory employees . . ..’” Id. at 657            employer looks for in employees. There
(quoting from Hanna Mining Co. v.                    are aspects of management that extend
District 2, Marine Engineers Beneficial              beyond the work qualities enumerated in
Ass’n, 382 U.S. 181, 189 (1965)). Thus,              the causes for discharge permitted under
the Court struck a state statute that                the WDA. An employer may consider it
permitted supervisors to seek damages                essential that a supervisor’s mastery of
against employers who discharged them                these aspects of management be a
for union membership because it “plainly             condition of employment. Under the
put pressure on [the employers] ‘to accord           WDA, however, in order to incorporate
to the front line of management the                  those other grounds for discharge into an
anomalous status of employees,’ and                  employment contract with a supervisor, the
would therefore flout the national policy            employer would have to bargain with the
against compulsion upon employers from               supervisor as an employee. Moreover, if
either federal or state agencies to treat            the supervisors, as the front line of
supervisors as employees.” Id. at 662                management, were answerable not only to
(quoting S.Rep. No. 105 80 th Cong., 1 st            the employer but also to the union, the
Sess. at 5 (1947)). Beasley, thus, teaches           employer’s ability to safely, efficiently,
that state (or territorial) laws that pressure       and productively manage the business
employers to accord supervisors the status           might suffer.
of employees for collective bargaining
purposes conflict with Section 14(a) of the                 Under Beasley, pressure upon
NLRA. See id. As noted in the Senate                 employers to treat supervisors as
Report quoted in Beasley, the result of              employees and to bargain with them as
supervisors serving two masters, and not             such violates Section 14(a). See 416 U.S.
being loyal to the employers’ interests, was         at 657. We conclude that the WDA would
evident in the coal mines, where, after              have such an effect on employers by

                                                 8
exerting a significant degre e of                    14(a) seeks to combat. The directness of
compulsion upon employers to bargain                 the pressure may affect the strength of the
with supervisors as employees; thus the              incentive rather than its existence.
WDA violates Section 14(a).                          However, the Supreme Court, by stating in
                                                     Beasley that Congress intended to prevent
        The District Court in Hotel                  “any compulsion,” clearly recognized that
Association III, however, read Beasley as            Section 14(a) prohibits the creation of any
holding that a state or territorial statute          pressure to collectively bargain with
conflicts with Section 14(a) only when the           supervisors. 416 U.S. at 657.
effect of the statute is to “afford
supervisors a cause of action that they                       Thus, in Washington Service
would not otherwise have under the                   Contractors Coalition v. District of
NLRA.” Hotel Association III, 216 F.                 Columbia, the District Court for the
Supp. 2d at 465. This reading of Beasley             District of Columbia held that a statute that
is incomplete. The holding in Beasley is             indirectly compelled an employer to
not merely that it is a violation of Section         bargain collectively with supervisors
14(a) if state law affords supervisors a             conflicted with Section 14(a). See 858 F.
cause of action that they would not have             Supp. 1219, 1221 (D.D.C. 1994), rev’d on
under thE NLRA. Beasley goes further to              other grounds, 54 F.3d 811 (D.C. Cir.
establish that it is a violation of Section          1995). In that case, the District of
14(a) if the state law “relating to collective       Columbia enacted a statute that required
bargaining,” – whether or not it affords a           contractors to retain many of their
cause of action to supervisors – “‘puts              predeces sor’s employees af ter the
pressure on [employers] to accord to the             contractors took over a service contract.
front line of management the anomalous               The District Court held that the statute
status of employees.’” 416 U.S. at 662               compelled the employer to bargain with
(quoting S .Rep. No. 105 at 5). Such a law           the supervisors collectively in violation of
would “flout the national policy against             Section 14(a). The court found that,
compulsion upon employers from either                because the statute applied to supervisors,
federal or state agencies to treat                   if a predecessor’s supervisors were
supervisors as employees.” Id.                       unionized, the statute could indirectly
                                                     compel an employer to bargain collectively
       So long as a state or territorial             with supervisors by preventing the
statute creates some pressure to bargain             e m p l o y er f r o m t e r m i n a t i n g t h e
collectively with supervisors, be it direct          predecessor’s supervisors. See id. at 1225.
or indirect, the statute creates the
possibility of forcing employers to divide                  As in Washington Service
the loyalties of their supervisors between           Contractors Coalition, the WDA does not
the employer and the union. As Beasley               directly require that an employer
recognized, it is this pressure that Section         collectively bargain with supervisors.

                                                 9
Nevertheless, the WDA indirectly compels
an employer to bargain collectively with
supervisors by requiring that an employer
who wishes to alter the WDA’s grounds
for terminating a supervisor enter into a
collective bargaining agreement. Since
this limitation constitutes pressure to
bargain with supervisory employees, the
WDA, as applied to supervisors, conflicts
with Section 14(a) of the NLRA

            IV. Conclusion

       For the reasons stated above, the
judgment of the District Court as to
general preemption will be affirmed. The
judgment in favor of the government
defendants as to the application of the
WDA to supervisors will be vacated and
this question will be remanded to the
District Court with instructions to enter
judgment in favor of plaintiffs.




                                            10
