Mar 10, 2008 Labor Relations

California Appeals Court Finds Wrongful Discharge Claim Preempted by the NLRA

In Luke v. Collotype Labels USA, Inc., 159 Cal. App. 4th 1463 (2008), the California Court of Appeal found that a terminated employee’s claim for wrongful termination in violation of public policy was properly dismissed because it was preempted by the National Labor Relations Act (the “NLRA”).

The NLRA governs labor management relations and guarantees employees the right to organize, collectively bargain, and engage in other concerted activities for their mutual aid or protection. In general, matters relating to collective bargaining and labor relations are governed exclusively by the NLRA, and state law claims that venture into the area of labor relations are often dismissed as preempted by federal law and subject to the exclusive jurisdiction of a federal agency, the National Labor Relations Board.

In the Luke case, the employer successfully argued that the plaintiff’s state law wrongful discharge claim was preempted by the NLRA. The employer, Collotype, suspended an employee, Luke, after learning that he had lied about having his position covered when he took time off. While on suspension, Luke sent an e-mail to a Collotype manager in another office, titled “trouble brewing,” relating to various complaints raised by employees. The following day, Collotype terminated Luke’s employment for insubordination. The company gave him a termination memorandum stating one of the reasons for termination to be that he had been soliciting signatures for a letter denouncing the management of the company.

Luke brought an action against his employer for wrongful termination in violation of public policy. Luke alleged that, prior to his termination, several of Collotype’s employees had complained to him about “unfavorable working conditions,” and that Luke had counseled them to keep a record of problems they encountered and to communicate any concerns with management. At deposition, Luke testified that he believed Collotype terminated his employment because he provided “support and ideas to other employees who complained about working conditions and being passed over for promotions.”

The trial court granted summary judgment in favor of Collotype, finding that Luke’s wrongful termination cause of action was preempted by the NLRA. On appeal, Luke argued that his claim should not be preempted because discussions among employees regarding working conditions are not “concerted activities” of the kind protected by the NLRA. The appellate court disagreed, observing that discussions among co-workers regarding working conditions are precisely the type of “concerted activities” the NLRA protects. Accordingly, Luke’s state law wrongful termination claim that he was discharged in retaliation for NLRA-protected conduct was preempted.

Luke also claimed that his cause of action fell within an exception to the general rule of NLRA preemption. The U.S. Supreme Court has created two exceptions to general NLRA preemption. First, NLRA preemption does not apply where the alleged regulated activity is of “peripheral concern” to the NLRA. Second, state regulation over matters that are “deeply rooted in local feeling and responsibility” (such as state trespass laws) are not preempted. Some courts have held that claims of wrongful discharge in violation of public policy involving state health and safety laws fall within these exceptions to the general rule of preemption. The Luke court, however, rejected Luke’s attempt to bring his cause of action within the health and safety exception, in part because Luke did not state in his complaint or testify in deposition that the complaints for which he was terminated related to Collotype’s violations of California health and safety regulations but, rather, involved other working conditions. 

This case demonstrates the far-reaching preemptive effect of the NLRA. Even a non-union employer may be able to defeat claims of wrongful termination in violation of public policy where the public policy that forms the basis for the claim arises out of rights protected by the NLRA. At the same time, the case serves as a reminder to non-union employers that the NLRA protects not merely the right to form or support unions but other types of group activity by employees intended to improve their working conditions.