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Protecting citizens' rights in the courts
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  DAVID STIKES, on behalf of himself and
v. No. 89-15208 CHEVRON U.S.A., INCORPORATED, et al.,
The Panel's Decision Conflicts With Decisions of the
In our judgment, the panel's decision conflicts with a decision of this Court not addressed in the opinion, overlooks material points of law, and presents the following questions: 1. Does the Supremacy Clause, coupled with section 301 of the Labor-Management Relations Act ("LMRA"), forbid the State of California from protecting the privacy of any unionized employee to the same extent that it protects the privacy of other employees? 2. Does mere existence of a collective bargaining agreement ("CBA"), regardless of its content, give a federal court jurisdiction to decide that unionized employees may never assert state law privacy claims, simply because the employer asserts that the claims are affected by a CBA, and thus are preempted by section 301? 3. When an employer contends that state law claims are preempted, and preemption depends on questions of state law, should a court abstain from deciding the federal issue until the employer obtains an authoritative ruling on state law from the state courts? David Stikes commuted to work for Chevron in his personal car, which he parked in a company parking lot (there was no other parking near the plant and no public transportation to the plant) and which he did not use in the course of his work. On July 2, 1987, Chevron ordered Stikes and other workers to hand over the keys to their cars for a search. Chevron did not contend that it had any reason to believe that any of the workers had done anything wrong; to the contrary, the search was conducted pursuant to a random search policy which Chevron had instituted three years before. Stikes refused to authorize the search and he was summarily fired. Stikes filed a grievance asserting that his discharge violated the CBA. Chevron disagreed, and Stikes' union refused to seek arbitration, saying the "case cannot be arbitrated . . . because it has nothing to do with the union contract." Stikes then sued in California Superior Court, alleging that the demand to search his car, and his discharge for refusing to consent to the search, violated his right of privacy under the California Constitution.(1) Chevron removed, and the district court refused either to remand or to abstain to permit the California courts to decide what role, if any, a CBA plays in the determination of a workplace privacy claim; it then dismissed the action on the ground that the state law privacy claim was preempted by section 301 of the LMRA. A panel of this Court affirmed. The panel upheld the removal of the case by holding that, when an employer asserts the defense of section 301 preemption, the issues of preemption and of removal jurisdiction are the same -- that is, the case is removable if and only if the claim is preempted. Opin. 11364-65. Turning to the question of preemption, the panel noted that section 301 preempts both claims that are founded on rights created by a CBA and claims that are "substantially dependent" on a CBA. Id. 11365. The panel ruled that Stikes' privacy claims necessarily "substantially depend" on the CBA for two reasons: (1) two previous Ninth Circuit opinions held that privacy claims depend on the CBA because privacy is a waivable right, and the court would have to look at the CBA to decide whether there had been a waiver, id. 11366;(2) and (2) California law makes privacy dependent on a person's "reasonable expectations" of privacy, and one of the many factors that go into a determination of any employee's "reasonable expectations" is the meaning of the employee's CBA. Id. 11368. Finally, the panel acknowledged that Stikes had disputed the content of California privacy law and asked the district court to abstain to allow the California courts to address the state law issues on which, at least on the panel's analysis, both preemption and removal hinge. However, the panel held that preemption does not rise to the level of a constitutional question that warrants abstention, and that, in any event, analysis of the CBA would be required whether the CBA came into the case through waiver (as this Court had held in Laws and Utility Workers) or through a determination of the employee's reasonable expectations. Opin. 11370. Nearly twenty years ago, the people of California amended their constitution to guarantee to all citizens of the state an "inalienable" right of privacy. Because the state courts have uniformly extended this right to private as well as government conduct, and because state law bars employers from requiring employees to waive state constitutional rights as a condition of employment, even if a contract purports to effect such a waiver, Long Beach City Emp. Ass'n v. City of Long Beach, 41 Cal. 3d 937, 951, 719 P.2d 660 (1986); Fire Fighters v. City of San Leandro, 181 Cal. App.3d 179, 182-183, 226 Cal. Rptr. 238 (1986), the state constitutional right of privacy extends to protect workers against workplace searches without reasonable suspicion. E.g., Semore v. Pool, 217 Cal. App. 3d 1, 266 Cal. Rptr. 280 (1990). At the heart of this case is a question of state law: in deciding a privacy case in a union workplace, must a court consider the CBA? Although this Court repeatedly assumed in Laws and Utility Workers that privacy is waivable, a California court later held that a contract could not waive that right, Semore, supra, 217 Cal. App. 3d at 1097 and n.4, and, as we noted above, other California courts have held that constitutional rights are generally not waivable even by a CBA. Contra, Luck v. Southern Pacific, 218 Cal. App. 3d 1, 267 Cal. Rptr. 618 (1990). The panel opinion continues to assert that the right of privacy may be waived in a CBA, but it adds that, because "reasonable expectations" with regard to privacy "depend[] on the circumstances and [are] measured by common habits in the use of domestic and business properties," Opin. 11368, citing Deborah C., 30 Cal. 3d 125, 137, 635 P.2d 446 (1981), a CBA must necessarily be considered. Stikes, however, argued that when Deborah C. refers to "common habits," it necessarily refers to general standards in the state and not to the particular agreement between the parties, because, if the agreement between the parties were controlling, then a party would enjoy only those privacy rights that had been bargained for, and the "inalienable" right of privacy would be drained of all meaning. Stikes also argued that bringing a contract into consideration through the "reasonable expectation" analysis was simply an attempt to obtain a back door determination of waivability that has already been rejected by the state court in Semore. The court could consider the actual working conditions in the plant, but the fact that there may be an CBA that touches on those conditions is irrelevant.(3) Under the panel's decision, however, this right of privacy can never be asserted by any unionized workers, regardless of whether there is actually an agreement surrendering privacy rights; union workers become second class citizens, deprived of any state law privacy protections and entitled to only those privacy protections that their unions obtain in collective bargaining. Indeed, the panel opinion precludes any way of determining whether state courts would accord the CBA any role in assessing employee privacy claims, and if so what that role would be, despite the fact that both preemption and removal depend, under the panel's analysis, on assumptions about what the state courts would say if they did consider such a case. That these strong contentions are true may be seen by considering three hypothetical cases. First, assume a CBA that, as properly construed, does not bear on privacy -- the company does not agree to any limit on its powers in the area of worker privacy, and the union does not agree to allow the employer to do anything proscribed by the right of privacy. The question then is, how would the California right of privacy be enforced? It could not be enforced in court because the employer could obtain removal and preemption by asserting that the contract supports its action in some way, and by arguing that the court has to look at the CBA to decide whether it does in fact support the employer's cause, that the need to look preempts the state claim, and that preemption takes the case out of state court. Nor could the state right be enforced in arbitration, because an arbitrator, on ascertaining that the CBA is silent on the question, would hold that he lacks the power to grant relief based on his view of enacted legislation, but that his only job is to enforce the agreement. Steelworkers v. Enterprise Wheel & Car, 363 U.S. 593, 597 (1960). Second, assume that (a) the CBA's actual meaning tilts slightly in favor of the employer, (b) California law would, as the panel held, require a state court to give consideration to a CBA as one of many factors bearing on the reasonable expectation of privacy, and (c) each and every one of the other factors strongly favors the employee so that, if a court were empowered to weigh the CBA in the balance, it would plainly hold that there was nonetheless a reasonable expectation of privacy. Again, the employee could not enforce his state law rights in court because it would be removed and preempted, and the arbitrator, whose only job is to enforce the CBA, would have to rule against the employee although the CBA, albeit relevant in theory, it is not determinative on the state law question on the facts of the particular case. Third, assume that the CBA actually means that the employer must abide by all state privacy rights. Still, the employer could argue that it thinks the CBA means something else, and the case is removable and preempted because the courts must look at the CBA to learn whether the employer's argument is correct. In this case an arbitrator could protect the employee because the CBA incorporates state law, but he would not award the same amount of relief that California would to a victim of tortious discharge -- namely, full compensatory damages (not just back pay) and punitive damages in appropriate cases. Here the CBA grants rights that are parallel to state law, precisely the sort of case that Lingle v. Norge, 486 U.S. 399 (1988), holds is not preempted. Yet the panel's analysis results in preemption and thus in denial of the sort of relief that California deems needed to deter wrongdoing and compensate victims. These hypotheticals are not imaginary cases. Indeed, Stikes's union apparently regarded the first hypothetical as an accurate description of the CBA here, supra at 2, and Chevron never denied that the second hypothetical was this case. Our arguments on preemption, removal and abstention would provide the courts with mechanisms to vindicate the state interest in protecting its citizens in circumstances where the CBA, whatever the employer may contend it means, does not in fact provide the employer with a defense.(4) The panel discussed the various doctrines but never confronted their combined impact. Moreover, as we now show, the panel's rulings on preemption, removal and abstention contradict decisions of this Court, of the Supreme Court, and of other federal circuits. Accordingly, the Court should grant rehearing or rehearing en banc to prevent the gross and wholly unnecessary infringements of state power that are wrought by the panel's decision. A. Abstention. The Court has repeatedly refused to hold that California law bars waiver of privacy rights in a CBA, but refuses to allow the California courts to pass on the questions either of waiver or of whether the CBA is a relevant datum is assessing reasonable expectations of privacy, although they may wish to exclude CBAs from consideration if the price of allowing some consideration is to bar union workers from asserting privacy rights at all. Nor will state courts ever have that opportunity, because at this point employers can be so sure of avoiding state privacy claims if they remove to federal court that it would be malpractice not to do so. Even if the Court allows such claims to be removed, it can ascertain whether its prediction of the state courts' views is correct by abstaining under Railroad Comm. v. Pullman, 312 U.S. 496 (1941), to permit the state law question to presented to the state courts. The panel refused to abstain under Pullman because preemption "does not rise to the level of a constitutional question in abstention jurisprudence." Opin. 11370, citing Knudsen Corp. v. Nevada State Dairy Comm., 676 F.2d 374 (9th Cir. 1982). Squarely contrary is IBEW v. Public Service Comm., 614 F.2d 206, 213 (9th Cir. 1980), a case not cited by the panel. When two circuit cases are irreconcilable, en banc consideration is mandatory. Atonio v. Wards Cove Packing, 810 F.2d 1477, 1479 9th Cir. 1987), rev'd oth. grds., 109 S. Ct. 2115 (1989).(5) While the panel may have thought that this case can be reconciled with IBEW because that case involves NLRA preemption and this one involved LMRA preemption, there is no reason why the "level of constitutionality" of the preemption questions under the two statutes would be any different. B. Removal. The panel's first error is that it misinterpreted the Supreme Court's opinion concerning removal of cases based on alleged preemption by section 301 in Caterpillar v. Williams, 482 U.S. 386 (1987), and ignored the crucial part of Oklahoma Tax Commission v. Graham, 109 S. Ct. 1519 (1989), on which Stikes had relied. In Caterpillar, employees sued under state law to enforce contracts which, they alleged, were formed by Caterpillar's promises, made to them individually, that they not be laid off if the plant were closed. The promises were allegedly made both when the employees held salaried positions that were outside the bargaining unit represented by a union, and when they were demoted to hourly positions that were covered by the CBA. 482 U.S. at 389. Indeed, some of the promises may have been made after the employees began working as part of the bargaining unit. Id. at 398 n.12. Although the Supreme Court affirmed this Court's holding that the case was improperly removed, it unanimously rejected this Court's reasoning. Id. at 391 n.4. According to the Supreme Court, the need to determine whether a plaintiff's complaint is properly pleaded does not deny a plaintiff the power to remain the master of his or her own claim; the plaintiff may opt to avoid federal jurisdiction by exclusive reliance on state law. Id. at 392. Even the doctrine of complete preemption does not rob a plaintiff of this right, so long as the state law claim is not substantially dependent on analysis of a CBA. Thus, the Caterpillar plaintiffs asserted a breach of individual employment contracts, and even if they could also have asserted claims under the CBA, as masters of the complaint, they were free not to do so. Id. at 393. Because the complaint did not rely on a CBA, or even address the relationship between the individual contracts and the CBA, the claims did not arise under section 301, and the case could not be removed based on the doctrine of complete preemption. Id. The Court then turned to Caterpillar's defense based on the rule of J.I. Case Co. v. NLRB, 321 U.S. 332 (1944), which limits the extent to which employers may adopt individual contracts that are inconsistent with the collective agreement. The Court had previously said that complete preemption under section 301 does not apply when a suit merely "relates to" a CBA; it is only state suits to enforce a CBA that "arise under" section 301 and hence are removable. Franchise Tax Board, 463 U.S. at 25 n.28 (1983). Thus, in Caterpillar, the Court held that, even if the rule of J.I. Case might ultimately be employed so that the CBA superseded the rights that plaintiffs could otherwise have enjoyed under individual contracts, that federal law defense must be litigated in state court: It is true that when a defense to a state claim is based on the terms of a collective-bargaining agreement, the state courts will have to interpret that agreement to decide whether the state claim survives. But the presence of a federal question, even a section 301 question, in a defensive argument does not overcome the paramount policies embodied in the well-pleaded complaint rule -- that the plaintiff is the master of the complaint, that a federal question must appear on the face of the complaint, and that the plaintiff may, by eschewing claims based on federal law, choose to have the cause heard in state court. When a plaintiff invokes a right created by a collective-bargaining agreement, the plaintiff has chosen to plead what we have held must be regarded as a federal claim, and removal is at the defendant's option. But a defendant cannot, merely by injecting a federal question into an action that asserts what is plainly a state-law claim, transform the action into one arising under federal law, thereby selecting the forum in which the claim shall be litigated. If a defendant could do so, the plaintiff would be master of nothing. 482 U.S. at 398-399 (emphasis in original).(6) Caterpillar controls the removal issue here. As in Caterpillar, the plaintiff here alleges that his employer violated rights apart from those created by the CBA. As in Caterpillar, the employer defends on the ground that the CBA eviscerates the right that plaintiff would otherwise enjoy. And, as in Caterpillar, the employer removed the case from federal court on the theory that, because it asserts that the CBA negates plaintiff's privacy rights, and that, because the courts will have to examine the CBA in order to resolve this defense, the claim itself arises under section 301 and is removable. Thus, as in Caterpillar, the waiver defense does not transform the claim itself into a federal claim that is within a district court's original jurisdiction. Accord, Local 57 v. Bechtel Power Corp., 834 F.2d 884, 889 (10th Cir. 1987). The panel distinguishes Caterpillar, saying that the Supreme Court forbade removal because plaintiffs' claims there "involved jobs outside the bargaining unit and were based on the argument that the CBA did not apply to plaintiffs at all." Opin. 11367. This Court said the same thing in Laws, but the Court misstated Caterpillar in Laws, and repetition does not make it so. In Caterpillar the employer tried to avoid remand by insisting that plaintiffs there were suing on promises that had been made while they were in the bargaining unit, but the Supreme Court ruled that the distinction was irrelevant: "this fact is irrelevant to the removal question. . . . [The] state law claims might be preempted by the NLRA, but they would not be transformed into claims arising under federal law." 482 U.S. at 398 n.12. As for the fact cited by the panel that in Caterpillar the employees' claims "were based on the argument that the CBA did not apply," Stikes, too, argues that the CBA does not preclude his privacy claim, just as the Caterpillar plaintiffs were arguing with respect to the contractual claims. The employers in both cases, of course, argued that it would be necessary to consider the CBA because the CBA could supersede the state law right, but the Supreme Court held that the question of whether the CBA was relevant had to be litigated in state court. Nor does it matter whether the CBA enters the case through a "waiver" defense or because it is one of many factors that a court should consider in determining whether there is a reasonable expectation of privacy. The panel treats the CBA as part of Stikes' prima facie case, but surely that is an error: if Stikes presented his evidence showing a reasonable expectation of privacy but failed to mention the CBA, his case would not be dismissed for that reason. Rather, Chevron would submit the CBA as part of its case. In either event, it is Chevron who raises the CBA as a defense, and accordingly the preemption argument must be made in state court. The panel also refused to apply Oklahoma Tax Commission because the facts of that case did not involve section 301. But Stikes cited it, not because of any factual similarity, but because of the way it characterized Caterpillar, which was at odds with the way this circuit has understood the case. According to the Supreme Court, 109 S. Ct. at 1521, Caterpillar stands for the following: We refused to characterize these state law claims as arising under federal law even though an interpretation of the collective bargaining agreement might ultimately provide the employer a complete defense to the individual claims, and even though employee claims on the collective bargaining agreement would have been the subject of original federal jurisdiction. (emphasis added). Similarly, here, even if the CBA were to provide Chevron with a complete defense against Stikes' privacy claims, the privacy claims may not be characterized as arising under federal law. In both Franchise Tax Board and Caterpillar, a unanimous Supreme Court corrected this Court's misstatements of the law of removal based on preemption. We urge the Court to use this case as a vehicle to reconsider its preemption removal cases and bring its jurisprudence in line with controlling Supreme Court precedent. C. Preemption. In Lingle, the Supreme Court held that not every reference to a CBA in the course of litigating a discharge case causes the underlying claim to be preempted. 486 U.S. 399, 413 n.12. In some of this Court's post-Lingle cases, this qualification is recognized. E.g., Gulden v. Crown Zellerbach, 890 F.2d 195, 198-199 (1989). In this case, the qualification is ignored. It is only the most poorly counseled employer who cannot find a way to bring a CBA-related consideration into a discharge case. For example, the employer may claim that the real reason for the discharge was absenteeism; the employee must show what the alleged contractual reason either does not exist or is a charade. In either event, the employer's assertion of the CBA goes to one of the elements of the employee's claim (i.e., bad motive), but the circuits are unanimous that such reference to the CBA is not enough to preempt state law claims. Smolarek v. Chrysler Corp., 879 F.2d 1326 (6th Cir. 1989) (en banc); Pantoja v. Texas Gas & Transm., 890 F.2d 955 (7th Cir. 1989); Hanks v. General Motors, 906 F.2d 341, 344 (8th Cir. 1990) (emotional distress claim).(7) Under the panel's holding, union employees are deprived of rights that state law accords to employees generally, even if, in fact, the CBA as correctly construed would not aid the employer's case. See supra 5-7. The Seventh Circuit holds that if employers raise a defense that a CBA supersedes a state right enjoyed by employees generally, the CBA-related defense is arbitrated, and then the state claim is then considered if the arbitral result allows. Matter of Chicago, Milwaukee RR Co., 852 F.2d 960, 967-968 (7th Cir. 1988). See also Dougherty v. Parsec, 872 F.2d 766 (6th Cir. 1989) (after arbitrator decided CBA not violated, court could decide remaining tort issues).(8) A similar procedure must be used to assess Chevron's contentions with respect to the CBA here. There is no reason to think that Congress intended to decree that a mere assertion that a CBA undercuts a state claim suffices to plunge that claim into a black hole from which it can never be considered. The appeal should be reheard or reheard en banc. Respectfully submitted,
Robert N. Jacobs Paul Alan Levy
Attorneys for David Stikes 1. He also alleged infliction of emotional distress and "unlawful business practice" under California Code Section 17200. As the panel noted, these claims hinge on Stikes' privacy claim, and their preemption and removal stand or fall with the disposition of the privacy claim. Opin. 11370. Thus, we do not discuss them here. 2. Citing Laws v. Calmat, 852 F.2d 430 (1988); Utility Workers v. Southern Cal. Edison Co., 852 F.2d 1083 (1988). 3. We agree that privacy rights may be waived in a concrete instance, but not as a condition of employment. Yet that is what Chevron has argued here -- it says that, whatever state law privacy rights Stikes might otherwise have had, he gave them up by agreeing to continue working for Chevron notwithstanding the fact that Chevron asserts the power to search his private car on demand. Indeed, there is a certain irony to Chevron's insistence that state law would recognize a waiver of Stikes' privacy rights through the CBA. If that were true, it could simply have searched Stikes' car with impunity without asking his permission. 4. Although Chevron pointed to provisions of the CBA that it deemed relevant, it never showed that they had a particular meaning that Stikes contested. But without an actual dispute about a question of federal law, there is no jurisdiction. Hunter v. United Van Lines, 746 F.2d 635, 648 n.8 (9th Cir. 1984), citing Franchise Tax Board v. Laborers Vacation Trust, 463 U.S. 1, 13 (1983). 5. The panel said that even if the California courts treat privacy rights as nonwaivable, the CBA is relevant in order to assess the parties' reasonable expectations. Opin. 11370. However, not only does Stikes dispute the applicability of the CBA to a "reasonable expectations" analysis, but, in any event, this analysis is a back door waiver argument that is contrary to Semore v. Pool. 6. The Court emphasized that in characterizing Caterpillar's waiver argument as one arising under the CBA for purposes of argument, it was not intimating any view on the preemption argument itself. 482 U.S. at 398 n.13. 7. The fact that privacy claims "involve[] a working condition," Opin. 11369, does not mean that they are necessarily intertwined with the CBA. So, too, do retaliatory discharge and individual contract cases, but they are not preempted by section 301. 8. Indeed, in Machinists Auto. Trades Dist. Coun. 190 v. Utility Trailer Sales, 141 Cal. App. 3d 80, 82-83, 190 Cal. Rptr. 98, app. dism., 464 U.S. 1005 (1983), the court examined the record of the parties' negotiations and decided that there was no agreement about the applicability of the state law right at issue there. The Supreme Court's dismissal of the employer's preemption appeal for want of a substantial federal question is binding precedent here. more resources
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