analysis, coming one year after the Caterpillar decision, provides a further indication that the Supreme Court did not intend that its Caterpillar holding should apply beyond the context of the complete preemption doctrine.
These decisions comport with the policies and purposes of section 301 preemption. As set forth above, supra p. 34, the reason courts have ascribed such broad preemptive effect to section 301 is to enforce properly negotiated arbitration provisions and to ensure uniformity of interpretation regarding collective bargaining agreements. A court can frustrate this policy just as effectively by deciding an issue that arises in a defense as it can by deciding that same issue when it arises as an element of the plaintiff's proof. Accordingly, this Court will consider not only the issues raised by the agents' claims but also the issues raised by Prudential's defenses in determining whether section 301 preemption applies.
Prudential moves to preempt two categories of claims: (1) those of Gordon, Weaver and Schulte for retaliatory discharge; and (2) Weaver's claims for defamation and tortious interference with business expectancies.
Prudential contends these claims will require the Court either to interpret specific provisions of the CBA or to examine relationships and practices governed by the CBA. For example, the company claims it terminated Schulte and Weaver for low sales production under the terms of its low production probation policy ("LPP policy"). Prudential asserts that the CBA supplied the authority under which it adopted the LPP policy, and that the CBA mandates grievance arbitration for disputes arising out of its application of the policy.
Similarly, Prudential states that it terminated Gordon when he failed to return to work after his disability period expired. Under the company's Service Disability Allowance Plan (the "disability plan"), expressly incorporated into the CBA in effect at the time, agents with less than five years' service are entitled to six months of disability leave benefits but face termination if they do not return to work at the end of the six-month period. Finally, Prudential defends Weaver's charges of defamation and tortious interference with business relations on the grounds that it owed its policyholders an obligation to disclose the information it imparted and that Weaver had no reasonable expectation of maintaining an independent business relationship with Prudential policyholders. Prudential contends that these relationships between the company, its agents and its policyholders are all governed by express and implied terms of the CBA.
I. Retaliatory Discharge
Under Illinois law, which applies to the claims of Weaver and Schulte, a retaliatory discharge complaint must allege (1) that the employer discharged the employee in retaliation for the employee's activities; and (2) that the discharge contravened a "clearly mandated public policy." Carter Coal Co. v. Human Rights Com'n, 261 Ill. App. 3d 1, 9, 633 N.E.2d 202, 208, 198 Ill. Dec. 740 (App. Div. 1994), citing Palmateer v. International Harvester Co., 85 Ill. 2d 124, 421 N.E.2d 876, 52 Ill. Dec. 13 (1981). Under Kentucky law, upon which Gordon's claim is based, the tort of retaliatory discharge is similarly limited to "those situations where the evidence establishe[s] the employer was retaliating against the employee for exercising a right conferred by well-established legislative enactment or for refusing to violate the constitution or a statute." Nelson Steel Corp. v. McDaniel, 898 S.W.2d 66, 69 (Ky. 1995). According to Prudential, "the central issue in a retaliatory discharge claim is whether the employer had an illicit motive in terminating the employee; an evaluation of the employer's stated reasons for termination is inseparable from this determination." (Prudential Br. p. 17)
In Lingle, supra, the Supreme Court determined that section 301 did not preempt an Illinois state law claim that alleged retaliatory discharge for filing a workers compensation claim. The defendant in that case claimed that the reason for the discharge was that the plaintiff's workers compensation claim contained false information, and that this constituted "just cause" for termination under the parties' collective bargaining agreement. The Supreme Court found that the state law claim was independent of the collective bargaining agreement because it turned on questions pertaining to "the conduct of the employee and the conduct and motivation of the employer," the determination of which did not require the Court to interpret any terms of the agreement. Id., 486 U.S. at 407, 108 S. Ct. at 1882. See also T.J. Gendron v. Chicago and North Western Transp. Co., 139 Ill. 2d 422, 435, 564 N.E.2d 1207, 1213, 151 Ill. Dec. 545 (1990) (citation omitted).
Prudential attempts to distinguish Lingle. It points out that it took adverse employment actions against Weaver, Schulte and Gordon under terms of the CBA that were much more specific than the "just cause" provision at issue in Lingle, and contends that, whereas the Lingle defendants simply referred to the "just cause" provision as a justification for terminating the plaintiff there, this Court must actually examine and interpret CBA terms to resolve the agents' retaliatory discharge claims.
Specifically, Prudential claims the Court will have to "evaluate" Prudential's claim that it terminated Weaver and Schulte for low sales production pursuant to the LPP policy -- which, in turn, will require the Court to examine the amount of commissions these agents earned during the relevant period and to compare their performance to that of similarly situated agents who were not terminated. To decide Gordon's retaliatory discharge claim, Prudential argues, the Court will have to resolve a disagreement between Prudential and Gordon as to whether or not Prudential's disability plan authorized it to terminate Gordon. (Prudential Br. p. 20)
There are several potential problems with Prudential's arguments. First, it is far from clear that resolution of the retaliatory discharge claims will ultimately turn on the application of any specific CBA terms. It does not appear that either Illinois or Kentucky requires a retaliatory discharge plaintiff to show that the employer's sole motivation for taking action against the plaintiff was retaliatory. See Szaflarski v. Lurie Co., 1991 U.S. Dist. LEXIS 11937, 1991 WL 169356, *6 (N.D. Ill.); First Property Mgt. Corp. v. Zarebidaki, 867 S.W.2d 185, 188 (Ky. 1993); Willoughby v. GenCorp, Inc., 809 S.W.2d 858, 861 (Ky. App. 1990). Accordingly, if the agents can trace Prudential's actions against them even partially to improper retaliatory motives, the Court may be able to resolve the issue in their favor without even consulting the CBA. See Thomas, 39 F.3d at 621.
Although Prudential contends that its defenses bring the CBA into play, this is not so apparent either. A court in this district recently declined to preempt a retaliatory discharge claim, holding: "Even if the employer's non-retaliatory explanation for the discharge depends on its interpretation of the collective bargaining agreement, 'so long as this interpretation was made in good faith and actually motivated . . . the [employer's] actions,' it constitutes a valid defense 'without regard to the correctness of the interpretation.'" Kube v. New Penn Motor Express, Inc., 865 F. Supp. 221, 231 (D.N.J. 1994).
And, as an Illinois district court recently pointed out, courts in the Seventh Circuit have "consistently held that § 301 does not preempt retaliatory discharge cases" because "courts need not venture beyond a determination of whether an employer's termination decision was motivated by the employee's filing of a claim or other method of opposition." Pelech, 828 F. Supp. at 531 n.7.
Prudential's position also assumes that the agents challenge its interpretation of the CBA. Clearly, if the parties all agree on the meaning of the relevant CBA provisions, the doctrine of preemption does not preclude the Court from deciding whether or not they constitute valid defenses. Hawaiian Airlines, Inc., U.S. at , 114 S. Ct. at 2248 n.8; Livadas, U.S. at , 114 S. Ct. at 2078. The agents apparently do not challenge Prudential's authority under the CBA to adopt or implement the LPP policy, nor do they assert that Prudential has violated the terms of the CBA, the LPP policy or any other internal rule, procedure or practice adopted thereunder.
(See Weaver/Schulte Opp. Br. p. 11)
Even to the extent that the agents attack the LPP policy directly for requiring production levels that can only be met through illegal sales practices, their claims do not appear to present an interpretation question. See Gayres v. Lancaster Press, Inc., 1994 WL 71277 (E.D. Pa.) (no preemption where plaintiff and defendant agreed on intent and meaning of provision in collective bargaining agreement but disagreed as to whether provision violated state law).
Douglas, 877 F.2d at 565, is distinguishable. There, plaintiff sued her employer for intentional infliction of emotional distress, alleging that the defendant had harassed her by arbitrarily denying ordinary employees' rights such as vacation and sick time and by unduly scrutinizing her work. Id. at 567-68. The Court found that "even though the complaint facially stated a state-law tort claim, [plaintiff] was actually seeking relief for alleged breaches of the collective bargaining agreement." Id. at 568. Here, by contrast, Weaver and Schulte have asserted claims that the Court will likely decide without substantial reference to, much less interpretation of, the CBA.
Arguments like Prudential's have fared poorly in other courts as well -- including the United States Supreme Court. In Hawaiian Airlines, U.S. at , 114 S. Ct. at 2251,
an employee claimed his employer discharged him after he refused to sign maintenance records because he believed the maintenance had not been performed properly. The employer argued that the claim should be preempted because it would require the Court to interpret a collective bargaining agreement provision setting forth circumstances under which employees were required to sign maintenance records. The Court found that "although such a determination would be required with regard to [the employee's] separate allegation of discharge in violation of the agreement . . . the state tort claims, by contrast, require only the purely factual inquiry into any retaliatory motive of the employer."
Prudential cites Doran v. Thermatex Corp., 1989 U.S. Dist. LEXIS 16312, 1989 WL 163700 (N.D. Ohio), Thomas, 39 F.3d 611, and Riccio, 1992 WL 281159, cases in which courts have preempted retaliatory discharge claims. All are distinguishable. In Doran, the plaintiff's claims were preempted only because he himself raised an issue requiring interpretation of the collective bargaining agreement. See Kube, 865 F. Supp. at 230 (noting that Doran Court preempted claim "because it was based on the allegation that the employer had incorrectly interpreted the collective bargaining agreement.") Similarly, the Court in Thomas, 39 F.3d at 620, explicitly based its preemption holding on the fact that the plaintiff himself had grounded his claim on an interpretation of the relevant labor agreement. And in Riccio, 1992 WL 281159 at *3, the Court simply held, without detailed explication, that it was "necessary to evaluate the terms of the CBA to determine whether [plaintiff] was wrongfully discharged." As set forth above, it does not appear that the agents' claims will require construction of the CBA.
For all of these reasons, the Court determines that section 301 does not mandate preemption of the agents' retaliatory discharge claims. The Court will also address Schulte's related claim for emotional distress arising out of his allegedly wrongful termination, for which Prudential requested preemption for the first time in its reply brief. As Prudential appears to concede, Schulte's claims for retaliatory discharge and emotional distress arise out of the same facts and implicate the CBA to the same degree. Accordingly, the Court will also deny Prudential's request for preemption of Weaver's emotional distress claim.
II. Defamation and Tortious Interference Claims
Weaver alleges that Prudential defamed him and interfered with his business relationships -- both during and after his employment with Prudential -- by informing individuals that Weaver was being investigated for unethical conduct, that he did not understand the insurance business, that he was inexperienced and that he "did not know what he was saying" when he told policyholders that Prudential had engaged in improper churning practices. (Weaver Resp. pp. 5, 13) Prudential argues that resolution of this claim requires interpretation of the CBA because the CBA establishes the contours of the relationships among Prudential, its agents and its policyholders, an understanding of which is necessary to evaluate Prudential's qualified privilege defense to the defamation action and to assess Weaver's reasonable expectations for purposes of the tortious interference claims. The Court will examine Weaver's defamation and tortious interference claims in turn.
A. Tortious Interference
To set forth a claim under Illinois law for tortious interference with existing business relations, Weaver would have to show:
(1) the existence of a valid and enforceable contract between the plaintiff and another; (2) the defendant's awareness of this contractual relation; (3) the defendant's intentional and unjustified inducement of a breach of the contract; (4) a subsequent breach by the other, caused by the defendant's wrongful conduct; and (5) damages.
HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill. 2d 145, 154-55, 545 N.E.2d 672, 676, 137 Ill. Dec. 19 (1989). To establish a cause of action for tortious interference with prospective business relations, he must show
(1) his reasonable expectation of entering into a valid business relationship; (2) the defendant's knowledge of the plaintiff's expectancy; (3) purposeful interference by the defendant that prevents the plaintiff's legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference.