HR Management & Compliance

Wrongful Termination: Labor Relations Law Preempted Employee’s Wrongful Discharge Lawsuit—But Caution Still Required

Richard Luke was a maintenance engineer for Collotype Labels USA, Inc., a Napa manufacturer of wine and liquor labels. Luke was suspended for three days for allegedly violating an absence-related work rule. He disagreed with the suspension and handled it by emailing Nigel Vinecombe, the group managing director for Collotype’s Australia office. Luke titled the email, “trouble brewing” and stated: “Sorry to bother you. I usually go through my chain of command, but this will not work here at this plant. Would you please call me?”

The next day, Luke was fired for insubordination and “conduct detrimental to the team.” The termination letter stated that co-workers reported that Luke was soliciting signatures for a letter denouncing management, and that Luke’s actions were insubordinate. The letter also told Luke that he was out of line for sending an email to Vinecombe in Australia about “trouble brewing.” It concluded: “Your behavior over the past couple of weeks is extremely disturbing to those around you and cannot be tolerated. The team environment [at] Collotype is essential, and we cannot have people bringing others down in an intentional effort to undermine the company.”

Wrongful Discharge Suit Filed

Luke sued for wrongful termination in violation of public policy. He claimed he had become a soundboard for employees’ concerns about Collotype’s allegedly unfavorable working conditions—such as lack of heat, restroom availability, and no seating during breaks and lunch—and promotion practices. He contended he was fired because he provided support and ideas to other employees on these issues. The suit alleged that the termination ran afoul of California’s public policy, as set forth in Labor Code Section 232.5, forbidding employers from terminating employees for disclosing information about work conditions.

Collotype asked the court to dismiss Luke’s wrongful termination claim on the ground that the federal National Labor Relations Act (NLRA) superseded it. The NLRA protects the rights of employees, both union and nonunion, to engage in union-related activities and to join together to protest or seek changes in the terms and conditions of their employment.

Case Dismissed

Now a California appeals court has sided with Collotype.1 The court explained that the NLRA preempts state laws that regulate activity covered by the NLRA. Besides protecting employees’ right to union organizing, the NLRA protects the right of all employees “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Courts in past cases have determined that discussions among employees about their working conditions—similar to Luke’s conversations with co-workers—amounted to protected concerted activity under the NLRA. Thus, ruled the court, the NLRA preempted Luke’s wrongful discharge suit based on Labor Code Section 232.5.

The court noted that courts have carved out an exception to NLRA preemption for claims based on public policy rooted in state occupational health and safety laws. Luke’s suit, however, didn’t specifically allege that he was fired because he complained about violations of California’s health and safety rules, although it could have. Thus, the preemption exception didn’t apply here.

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Collotype dodged a bullet with this lawsuit because Luke sued under the wrong law, but another employer dealing with slightly different facts might not be so lucky. In particular, the appeals court would probably have green-lighted Luke’s suit if he had alleged that his termination violated Cal/OSHA protections against retaliation for complaining about health and safety matters, given that some of the worker concerns in this case involved restroom availability and heat. What’s more, the NLRA’s preemption of a wrongful discharge suit brought under state law doesn’t mean an employer is out of the woods; depending on the circumstances, the employee could instead file an unfair labor practice charge with the National Labor Relations Board, so the employer would have to defend its actions in that forum.

The best way to avoid problems is to address employee concerns over working conditions by accepting complaints, conducting a thorough investigation, and taking appropriate action to remedy problems. For guidance on handling employee complaints, check out our Special Report, “Employee Complaints: An Investigation and Action Guide.”

1Luke v. Collotype Labels USA, Inc., Calif. Court of Appeals (Dist. 1) No. A116544, 2008