Smith v. Houston Oilers Inc. ( 1996 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 95-20073
SHERMAN SMITH; TRACY SMITH,
Plaintiffs-Appellants
Cross-Appellees,
versus
HOUSTON OILERS, INC., doing business as
The Houston Oilers; FLOYD REESE; STEVE WATTERSON,
Defendants-Appellees
Cross-Appellants.
Appeal from the United States District Court
for the Southern District of Texas
June 28, 1996
Before POLITZ, Chief Judge, and HIGGINBOTHAM and SMITH, Circuit
Judges.
HIGGINBOTHAM, Circuit Judge:
Sherman Smith and Tracy Smith sued the Houston Oilers and
members of the Oilers' staff, alleging that the defendants required
their participation in an abusive rehabilitation program under
threats of being dismissed from the Oilers and blackballed from
other teams in the National Football League. The district court
dismissed the state claims based on the abusive rehabilitation
program on the ground that those claims were preempted by federal
labor law, but it remanded to state court related state claims of
intentional infliction of emotional distress to the extent that
those claims arose from the allegations of threatened blackballing.
The players appeal the dismissal, and the Oilers cross-appeal the
order remanding to state court.
We conclude that all claims are preempted by federal labor
law. We affirm the dismissal, vacate the order remanding to state
court, and remand with instruction to dismiss those claims as well.
I.
Sherman Smith and Tracy Smith alleged the following facts, and
we accept them as true in the present posture of the case: Sherman
Smith and Tracy Smith each signed a one-year contract to play
professional football for the Houston Oilers. During preseason
training camp in the summer of 1994, Sherman broke his thumb and
Tracy tore a leg muscle. These injuries prevented them from
playing, and they were placed in a routine rehabilitation program
with other injured players. In the first week of required player
cuts, however, the Oilers sought to dismiss Sherman and Tracy. But
since the National Football League prohibits teams from terminating
football players while they are recovering from football-related
injuries, the Oilers offered to settle Sherman's and Tracy's
contracts for a "meager" sum if they left voluntarily. Sherman and
Tracy rejected these offers.
According to the Smiths’ allegations, Floyd Reese and Steve
Watterson of the Oilers responded by compelling Sherman and Tracy
to submit to severe abuse in a phony "rehabilitation" program
designed to coerce them into leaving the team. The abuse, they
allege, included: reduction of rehabilitation treatment previously
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allowed, such as stretching and ice treatment; sleep deprivation
resulting from morning workouts beginning at 4:00 a.m. and evening
workouts ending at 11:00 p.m.; strenuous exercise that far exceeded
previous demands, including humiliating water-barrel-pulling
exercises; veiled threats of dismissal for noncompliance with
rehabilitation; intentional confusion as to workout schedules; and
threats to blackball Sherman and Tracy from playing for other NFL
teams in the future.
No other players participated in this abusive program. Three
days after Sherman and Tracy began the program, Sherman collapsed
during a 4:00 a.m. workout and was taken to the hospital. Later
that day, Tracy complained to the NFL Players Association, after
which the Oilers ceased the program.
Sherman Smith and Tracy Smith sued the Houston Oilers, Reese,
and Watterson in Texas state court, alleging state law claims of
coercion, duress, extortion, assault and battery, and intentional
infliction of emotional distress. The Oilers removed to federal
court on the ground that the claims were preempted by § 301 of the
Labor Management Relations Act, 29 U.S.C. § 185. The Oilers then
moved to dismiss all claims under Fed. R. Civ. P. 12(b)(6), arguing
that their resolution turned on an analysis of the collective
bargaining agreement between the NFL and the players union, and
that the claims therefore had to be resolved pursuant to the CBA's
arbitration provisions. The players moved to remand the case to
state court, arguing that the district court lacked subject matter
jurisdiction over their state-law claims.
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The district court dismissed the claims based on the abusive
rehabilitation program, agreeing with the Oilers that those claims
were preempted by LMRA § 301 because their resolution would require
analysis of the CBA. The court remanded to state court, however,
the players' claims of intentional infliction of emotional distress
based on alleged blackballing threats, concluding that blackballing
threats "could not possibly be sanctioned by any labor contract."
The players appeal the dismissal of their non-blackballing claims.
The Oilers cross-appeal the order remanding the players' claims of
infliction of emotional distress based on threatened blackballing.
II.
The players bring two arguments. First, the players contend
that the district court erred in holding that their claims of abuse
were "inextricably intertwined" with the CBA and hence preempted by
§ 301 of the LMRA. Second, in the alternative, they argue that the
district court erred in deciding that the Oilers' alleged conduct
was not sufficiently outrageous to override § 301 preemption under
Farmer v. United Bhd. of Carpenters & Joiners, 490 U.S. 290 (1977).
We conclude that the district court properly dismissed the claims
based on the allegedly abusive rehabilitation program.
A.
Section 301 of the LMRA provides: "Suits for violation of
contracts between an employer and a labor organization representing
employees in an industry affecting commerce . . . may be brought in
any district court of the United States having jurisdiction of the
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parties." 29 U.S.C. § 185. The Supreme Court has held that LMRA
§ 301 preempts state-law claims that are "substantially dependent
upon analysis of the terms of an agreement made between the parties
in a labor contract." Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,
220 (1985). Accordingly, "if the resolution of a state-law claim
depends upon the meaning of a collective-bargaining agreement, the
application of state law (which might lead to inconsistent results
since there could be as many state-law principles as there are
States) is preempted and federal labor-law principles — necessarily
uniform throughout the nation — must be employed to resolve the
dispute." Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399,
405-06 (1988).
In considering a claim of intentional infliction of emotional
distress, we have stated that "the question of preemption turns on
whether the conduct upon which the claim is grounded is governed by
the CBA. If the agreement would not condone the activity, there is
no preemption. If the conduct arises out of activities covered in
the agreement, however, courts generally hold that the emotional
distress claim is preempted." Baker v. Farmers Elec. Coop., Inc.,
34 F.3d 274 (5th Cir. 1994). Thus, on this view, LMRA preemption
typically does not occur "where the allegedly tortious conduct
could not have been sanctioned by the CBA, for example in cases
concerning assault and battery or sexual harassment." Id. at 281;
see Reece v. Houston Lighting & Power Co., 79 F.3d 485, 487 (5th
Cir. 1996) (concluding that LMRA § 301 preempted state-law claims
of discrimination and intentional infliction of emotional distress
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because resolution of claims would require interpretation of CBA
provisions on promotion, seniority, and training assignments).
The district court here concluded that LMRA § 301 preemption
applied because the CBA authorized NFL teams to require players to
participate in rehabilitation programs. The court explained:
In the instant matter, most of the alleged tortious
conduct revolved around the required participation by the
players in a rehabilitation program. Rehabilitation programs
are condoned by the CBA and the individual player contracts.
For example, paragraph 8 of the player contract states that
the player warrants he will maintain excellent physical
condition. Article [VIII] of the CBA further provides that
`material failure to follow rehabilitation program prescribed
by Club physician or trainer' can result in a maximum fine of
$1,000. It is evident from these provisions that the
underlying conduct of the team and the individual defendants
could be permitted by the CBA. Accordingly, the Court
determines that the causes of action which stem from the
`abusive' rehabilitation program are inextricably intertwined
with the CBA and are therefore preempted by § 301.
The players do not dispute that the CBA at issue here permits NFL
teams to require their players to participate in rehabilitation and
conditioning programs. Rather, the players urge that the district
court erred because the Oilers' demands in rehabilitation were so
egregious that the CBA could not possibly have condoned them.
The players contend with considerable force that LMRA § 301
preemption generally does not apply to claims based on certain
types of tortious conduct that a CBA could never condone, such as
physical battery. But such inquiry into whether a CBA "condoned"
a defendant's conduct is only a means for addressing the ultimate
question whether "resolution of a state-law claim depends upon the
meaning of a collective-bargaining agreement." Lingle 486 U.S. at
405-06. Where the complained-of actions consist entirely of an
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employer's physical battery of an employee, there is no need for
reference to a labor agreement; in such cases, it typically makes
sense to say that, because the CBA at issue could not have condoned
such conduct, resolution of the plaintiff's claim for battery does
not depend on the meaning of the terms of the CBA. This comports
with an underlying appreciation that the employer's physical attack
on the employee is properly regarded as an issue of state law, not
a matter of federal labor concern.
Here, however, the alleged misconduct cannot be separated from
the underlying dispute between the players and the Oilers over the
adequacy of the Oilers’ offer of termination pay. That dispute is
fundamentally a labor dispute; indeed, the abuse complained-of by
the players occurred only because they wanted to remain with a team
that did not want them. There is no allegation that anyone from
the Oilers’ management or staff committed a direct act of physical
violence against Sherman Smith or Tracy Smith. Rather, the abuse
of the two players resulted from their compelled participation in
an ostensible rehabilitation program under threats of termination
or blackballing. The players could have avoided the abuse by
refusing to participate. In sum, the complained of conduct was the
Oilers' unreasonable negotiating position regarding termination,
not any infliction of violence upon the two players.
The players could have complained to the league office
earlier. The quick response to their complaint belies the effort
to distance the dispute over contract rights and excessive workout
schedules from the CBA. Indeed, since the labor dispute is at the
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heart of the players' complaints, we think that those complaints
are not too peripheral a concern for the federal labor laws. In
short, because we are persuaded that the underlying labor dispute
over termination pay cannot be divorced from the Oilers' conduct in
forcing the players to choose between the terms of termination and
an excessively demanding rehabilitation program, we conclude that
resolution of the players claims in this case of professional
athletes is too dependent on an analysis of the CBA to escape § 301
preemption.
Another way of stating this is that we have here a case
involving contract rights, not condoned violence. That is to say,
players can legally consent to challenging workouts and rigorous
rehabilitation sessions. Whether the Oilers had a legal right to
require the players either to endure the workouts or quit is
therefore a question of contract law. As the contract at issue is
a CBA, federal, not state, law governs.
B.
The players contend in the alternative that if their claims
are otherwise preempted, they are nevertheless entitled to pursue
their claims in state court under an exception to federal
preemption where the defendants' "outrageous conduct" is merely a
peripheral concern of federal law. See Farmer v. United Bhd. of
Carpenters & Joiners, 430 U.S. 290 (1977). In Farmer, a union
officer claimed intentional infliction of emotional distress under
California law, alleging that other union officers had engaged in
"outrageous conduct, threats, intimidation, and words," causing him
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"grievous mental and emotional distress as well as great physical
damage." Id. at 301. In deciding whether the claim was preempted,
the Supreme Court cautioned that "inflexible application of the
[preemption] doctrine is to be avoided, especially where the State
has a substantial interest in regulation of the conduct at issue
and the State's interest is one that does not threaten undue
interference with the federal regulatory scheme." Id. at 302; see
also San Diego Bldg. Trade Council v. Garmon, 359 U.S. 236, 243-44
(1959) (emphasizing that preemption does not occur where conduct
"was a merely peripheral concern of the [LMRA, . . . or] touched
interests so deeply rooted in local feeling and responsibility
that, in the absence of compelling congressional direction, we
could not infer that Congress had deprived the State of the power
to act"). The Court concluded that the federal labor laws did not
preempt the union officer's emotional-distress claim, explaining
that "there is no federal protection for conduct on the part of
union officers which is `so outrageous that no reasonable man in a
civilized society should be expected to endure it.'" Id. at 303.
We agree with the district court that the Oilers' alleged
misconduct was not sufficiently outrageous to defeat preemption
under Farmer. That is, since we think it necessary to refer to the
CBA to determine the extent to which the Oilers' rehabilitation
demands were permissible, it is likewise necessary to measure the
outrageousness of their conduct by reference to what the CBA
authorizes. Cf. Reece, 79 F.3d at 487 (holding that LMRA § 301
preempted plaintiff's claim of intentional infliction of emotional
9
distress after observing that, "to evaluate whether [defendant's]
conduct was `outrageous,' the conduct must be measured against the
CBA").
III.
The Oilers argue on cross-appeal that the district court erred
in remanding to state court the players' claims of intentional
infliction of emotional distress resulting from the Oilers' alleged
blackballing threats. The Oilers contend that such claims based on
allegations of threatened blackballing are claims of unfair labor
practices, and as such are preempted by § 7 and § 8 of the National
Labor Relations Act, 29 U.S.C. § 151 et. seq. Though the Oilers
are asserting NLRA preemption for the first time on appeal, we may
consider the argument since NLRA preemption is an issue of subject
matter jurisdiction. See International Longshoremen's Ass'n, AFL-
CIO v. Davis, 476 U.S. 380, 389-93 (1986).
We agree that NLRA §§ 7 and 8 preempt the players' claims of
intentional infliction of emotional distress based on blackballing
threats. Section 8(a) of the NLRA provides, in relevant part, that
"[i]t shall be an unfair labor practice for an employer — (1) to
interfere with, restraint, or coerce employees in the exercise of
the rights guaranteed in [NLRA § 7]." 29 U.S.C. § 158(a). Section
7 of the NLRA in turn states:
Employees shall have the right to self-organization, to form,
join, or assist labor organizations, to bargain collectively
through representatives of their own choosing, and to engage
in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection, and shall also
have the right to refrain from any or all of such activities
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except to the extent that such right may be affected by an
agreement requiring membership in a labor organization as a
condition of employment as authorized in section 158(a)(3) of
this title.
29 U.S.C. § 157. "When an activity is arguably subject to § 7 or
§ 8 of the [NLRA], the States as well as the federal courts must
defer to the exclusive competence of the National Labor Relations
Board if the danger of state interference with national policy is
to be averted." Garmon, 359 U.S. at 245.
The players do not dispute that blackballing is an unfair
labor practice proscribed by § 7 and § 8 of the NLRA; rather, they
argue that because they did not engage in any "concerted activity"
as contemplated by NLRA § 7, the NLRA does not govern the Oilers'
blackballing threats, which were directed toward the players' non-
concerted activity. This argument lacks merit. See NLRB v. City
Disposal Sys., Inc., 465 U.S. 822, 840-41 (1984) (holding that
honest and reasonable invocation of collectively bargained right
constitutes "concerted activity" under § 7 of NLRA). We conclude
that § 7 and § 8 of the NLRA preempt the emotional-distress claims
based on the Oilers' blackballing threats.
IV.
We AFFIRM the district court's dismissal of the plaintiffs'
claims based on the abusive rehabilitation program. We VACATE and
REMAND to the district court its order remanding to state court the
claims of intentional infliction of emotional distress based on
blackballing threats with instructions to dismiss those claims.
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