Deschene v. Pinole Point Steel Co.
A unionized steelworker’s state-law claims — wrongful discharge for giving deposition testimony against his employer’s interests and FEHA disability discrimination — are not preempted by section 301 of the LMRA, are not waived by a union-negotiated arbitration clause, and survive summary judgment on coworker evidence that the termination-night “misconduct” story was manufactured.
Deschene v. Pinole Point Steel Co. (1999) 76 Cal.App.4th 33
Wrongful Termination
Retaliation for Testimony
Disability (FEHA)
Lab. Code § 230 / LMRA § 301
In brief. Weeks after a 15-year steelworker gave deposition testimony in a coworker’s asbestos case — testimony his employer argued could not have been adverse to its interests, though the jury in that case allocated the company 38 percent of the fault — he began accumulating reprimands, and three months after testifying he was fired for supposed insubordination he flatly denied. The First District reversed summary judgment on his public-policy and discrimination claims: the claims required no interpretation of his union’s collective bargaining agreement and so escaped LMRA section 301 preemption; the CBA’s arbitration clause could not waive his statutory judicial forum; and coworker testimony that the termination-night incident was engineered — plus two managers’ statements that the supervisor “considered him a liability and wanted him out” — was evidence from which “a trier of fact could conclude that the reason given for Deschene’s termination was pretextual.” (Deschene v. Pinole Point Steel Co. (1999) 76 Cal.App.4th 33, 42–46, 48–49.)
By Jonathan J. Delshad
Founder & Editor-in-Chief
Facts
Al Deschene began working for Pinole Point Steel Company (PPS) on March 18, 1980. On March 24, 1995, he gave deposition testimony in a lawsuit brought by a former PPS employee, Jerald Gatton, for injuries Gatton attributed to asbestos exposure. (Deschene v. Pinole Point Steel Co. (1999) 76 Cal.App.4th 33, 37 & fn. 2 [taking judicial notice of the court’s unpublished decision in the Gatton appeal].) It was undisputed that PPS fired Deschene in late June 1995 — a year in which he received three reprimands. On April 18, 1995, he was reprimanded for allegedly violating attendance policy; on April 27, 1995, for what was characterized as “carelessness, loss of material and failure to follow instructions” — Deschene conceded that he failed that day to follow his supervisor Jim Moyles’s instruction to “close the snubber rolls,” which shut down the production line. (Id. at p. 37.)
The termination reprimand, dated June 26, 1995, accused Deschene of two “recent incidents of misconduct and insubordination” directed at Moyles: on May 12, 1995, he allegedly “blew up” at Moyles during a counseling session and called him a “spineless, gutless faggot”; and on June 20, 1995, he allegedly left his work station “[f]or no legitimate reason,” intercepted Moyles on the shop floor, shook his finger in Moyles’s face, refused an instruction to return to work, and called him an obscene name. (Deschene, supra, 76 Cal.App.4th at pp. 37–38.) Deschene denied all of it — he denied “blowing up” on May 12 and denied the slur, and he characterized the employer’s version of June 20 as a “complete fabrication,” denying that he ever left his station, was told to return to work, or used the epithet attributed to him. (Id. at p. 38.)
Deschene belonged to the International Association of Machinists and Aerospace Workers and worked under a collective bargaining agreement (CBA). He grieved the termination reprimand on the ground that he was fired because of his health and age in violation of the CBA’s nondiscrimination provisions; the matter was set for arbitration in mid-May 1996, but he withdrew his arbitration request on May 10. (Deschene, supra, 76 Cal.App.4th at p. 38.)
His health was central to the case. By declaration, Deschene asserted that Moyles refused to accommodate his medical condition — a heart condition and diabetes — by refusing to let him inject insulin in a clean location and refusing to permit him to eat frequently or rest periodically; his previous supervisor, by contrast, had accommodated him, testifying it “wasn’t a problem” to let Deschene inject insulin in the foreman’s office and that he permitted Deschene to rest when he got “sickly looking,” with the foreman himself stepping in to “temporarily watch [Deschene’s] position.” (Deschene, supra, 76 Cal.App.4th at p. 44.) It was undisputed that PPS knew of the heart condition as early as 1993, and knowledge of the diabetes was inferable from the prior accommodations. (Id. at p. 45.) Deschene also showed that under his previous foreman he had no attendance problems and no carelessness reprimands, and that roughly six months before his termination he was the operator of a crew that “broke a production record.” (Ibid.)
Procedural history
Deschene’s June 27, 1996 complaint sought damages for wrongful termination on theories of breach of contract and of the covenant of good faith and fair dealing, termination in violation of public policy, and violation of statutory prohibitions against discrimination based on medical condition and retaliation for giving deposition testimony. (Deschene, supra, 76 Cal.App.4th at p. 37.) The trial court granted PPS summary judgment by order filed December 30, 1997, concluding that Deschene had “failed to dispute that all of the causes of action alleged in the complaint are governed by a collective bargaining agreement, and are therefore preempted by section 301 of the Labor-Management Relations Act, 29 U.S.C. 185,” and that he had “failed to dispute that his termination was not in violation of public policy arising out of the Gatton testimony and his medical condition.” (Id. at p. 39.) Deschene appealed from the judgment and the denial of his new trial motion. (Id. at p. 37 & fn. 1.) The Court of Appeal reversed the judgment of dismissal as to the public-policy and discrimination claims, affirmed as to the contract claims, and — the disposition having mooted it — did not reach the new trial ruling. (Id. at p. 49 & fn. 11.) The opinion was modified on November 29, 1999. (Id. at p. 49.)
Issue
Four questions built the appeal. First, does section 301 of the LMRA preempt a unionized employee’s state-law claims for termination in violation of public policy and for discrimination based on health and retaliation for testimony? Second, does California recognize a public-policy discharge claim for an employee fired over deposition and trial testimony adverse to his employer? Third, did Deschene raise a triable issue that PPS’s stated reason — misconduct and insubordination — was pretextual, on his FEHA disability claim? Fourth, did the CBA’s mandatory grievance-arbitration machinery — which Deschene invoked and then abandoned — bar him, by election or waiver, from a judicial forum for his statutory claims? (Deschene, supra, 76 Cal.App.4th at pp. 39–46.)
Holding
Reversed as to the claims for wrongful termination in violation of public policy and for discrimination on the basis of health and in retaliation for giving deposition testimony; affirmed as to the concededly preempted contract claims. (Deschene, supra, 76 Cal.App.4th at p. 49.) The nonpreemption holding follows Lingle: the elements of and defenses to the statutory and public-policy claims “are factual ones which could be resolved without the necessity of construing the provisions of the CBA.” (Id. at p. 42.) On the merits, wrongful discharge for giving truthful testimony states a public-policy claim rooted in Labor Code section 230 and Petermann. (Id. at pp. 41–43.) On pretext, the coworker and manager evidence was such “that a trier of fact could conclude that the reason given for Deschene’s termination was pretextual and that therefore there remained triable issues of material fact as to his claim for discrimination based upon physical disability.” (Id. at p. 46.) And under Torrez and Wright, the union-negotiated CBA neither waived Deschene’s judicial forum nor bound him by his aborted resort to arbitration. (Id. at pp. 46–49.)
Reasoning
Section 301 preemption turns on contract interpretation, not factual overlap. The court began with the text of section 301(a) of the LMRA (29 U.S.C. § 185(a)) and the uniformity rationale that makes federal law supreme in construing CBA terms. (Deschene, supra, 76 Cal.App.4th at p. 39.) The limits come from Lingle v. Norge Division of Magic Chef, Inc. (1988) 486 U.S. 399, which held an Illinois retaliatory-discharge claim not preempted because its elements and defense were “purely factual questions” — even though “interpretation of collective-bargaining agreements remains firmly in the arbitral realm.” (Id. at pp. 39–40.) Lingle rejected the notion that a shared factual universe triggers preemption: “the mere fact that a broad contractual protection against discriminatory — or retaliatory — discharge may provide a remedy for conduct that coincidentally violates state law does not make the existence or the contours of the state-law violation dependent upon the terms of the private contract.” (Id. at p. 40, quoting Lingle, at pp. 412–413.) The court distilled the rule to a sentence: “The trigger for section 301 of the LMRA preemption is whether the application of state law requires contractual interpretation of the terms in a CBA.” (Ibid.) Under Moreau v. San Diego Transit Corp. (1989) 210 Cal.App.3d 614, 624, the inquiry examines the claim’s elements, the agreement’s terms, and the facts each side will marshal. (Id. at pp. 40–41.) Deschene conceded his contract and implied-covenant claims required CBA interpretation and were preempted; the fight was over the public-policy and discrimination claims. (Id. at p. 41 & fn. 3.)
The testimony-retaliation claim: elements drawn from Labor Code section 230. Deschene alleged he was terminated “in retaliation for engaging in protected activity” — his testimony adverse to PPS in Gatton — invoking Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1086–1087, and the public policy of Labor Code section 230, subdivision (b), which provides that “[n]o employer shall discharge or . . . discriminate against an employee for taking time off to appear in court as a witness” upon reasonable notice. (Deschene, supra, 76 Cal.App.4th at p. 41 & fn. 4.) From the statutory scheme the court derived the claim’s elements: (1) discharge of, or discrimination against, an employee, (2) motivated by the employee’s taking or having taken time off to appear in court as a witness; the employer may defend on lack of reasonable notice or absence of the prohibited motive. (Id. at pp. 41–42.) Both questions “are factual in nature” — and because the CBA’s nondiscrimination clause “expressly prohibits only” discrimination based on “race, color, creed, sex, age, religion, or national origin,” no CBA term needed construing. The claim was therefore independent of the CBA under Lingle, and under Livadas v. Bradshaw (1994) 512 U.S. 107, 123–124, section 301 “cannot be read broadly to pre-empt nonnegotiable rights conferred on individual employees as a matter of state law.” (Id. at p. 42.)
The claim is substantively viable — and the employer’s “substance versus fact of testifying” argument was “disingenuous.” Applying the four-part test of Gantt, supra, 1 Cal.4th at page 1090, the court found the policy statutory, public-serving, fundamental, and well established: since Petermann v. International Brotherhood of Teamsters (1959) 174 Cal.App.2d 184, 188, California has held it “obnoxious to the interests of the state and contrary to public policy and sound morality to allow an employer to discharge any employee” for giving truthful testimony. “Responding to a subpoena and giving truthful testimony when called to testify are unarguably fundamental and substantial policies designed to benefit the public as a whole insofar as the integrity of legal process benefits all citizens.” (Deschene, supra, 76 Cal.App.4th at p. 43.) In a pointed footnote, the court dismantled PPS’s theory that Labor Code section 230 protects only the act of appearing, not the content of testimony — the “logical implication” being that a subpoenaed employee who testifies adversely “may be fired for doing so.” Though PPS was not a party to Gatton, the jury there allocated PPS 38 percent of the fault, a codefendant was positioning to blame PPS’s 1980s asbestos removal, and there was testimony PPS made little effort to protect workers from friable asbestos; Deschene himself testified that workers “were never cautioned about asbestos nor told to wear air masks.” The court found “disingenuous” PPS’s assertions that his testimony was not “at least potentially . . . injurious to the company.” (Id. at p. 42, fn. 5.) A D’Amico objection — that Deschene’s opposing declaration contradicted his deposition — failed because the declaration was consistent with or repetitive of the deposition testimony PPS itself had submitted. (Id. at p. 43 & fn. 6.)
The FEHA disability claim: burden-shifting, and pretext evidence that a jury could credit. Government Code section 12940, subdivision (a), prohibits discrimination on account of “physical disability” or “medical condition,” terms defined in section 12926. (Deschene, supra, 76 Cal.App.4th at pp. 43–44 & fn. 7.) A prima facie case requires showing that the plaintiff (1) “suffers from a disability,” (2) is otherwise qualified to do the job, and (3) “was subjected to adverse employment action because of his disability”; the burden then shifts to the employer to offer a legitimate reason, and back to the plaintiff to offer evidence of falsity, pretext, or discriminatory animus. (Id. at p. 44, citing Brundage v. Hahn (1997) 57 Cal.App.4th 228, 236, Sada v. Robert F. Kennedy Medical Center (1997) 56 Cal.App.4th 138, 155, and Horn v. Cushman & Wakefield Western, Inc. (1999) 72 Cal.App.4th 798, 806–807.) PPS offered the reprimands and noted that another worker had been fired for calling his foreman a “faggot.” (Id. at p. 45.) Deschene answered with pretext evidence keyed to the night of the firing: a coworker testified that on that evening Moyles was “especially critical” of Deschene over a production-line problem the coworker believed was solely the maintenance department’s responsibility; the problem persisted after Deschene left and no other operator was reprimanded for it; and the coworker was surprised that when Moyles called Deschene off the line on June 26, a replacement operator who had not been scheduled to work “appeared in short order to assume Deschene’s post.” (Id. at p. 46.) It was undisputed that Deschene testified two PPS managers told him that Moyles and the vice-president of operations “considered him a liability and wanted him out”; and a coworker testified PPS “did not fire workers for misconduct” unless it was “witnessed by someone in addition to a supervisor who could substantiate its occurrence.” (Id. at p. 46.)
The holding on pretext — candid about its limits. Framing the question as whether this was “specific, substantial evidence of pretext” from which a reasonable trier of fact could find PPS’s explanation “not credible” under Horn, supra, 72 Cal.App.4th at pages 807 and 817, the court answered in the affirmative — with a notable qualification: “There is certainly substantial evidence that the incident on the night of Deschene’s termination may have been unfair or pretextual. What the evidence does not show is a direct causal link between Deschene’s physical disability and his firing, though it is clear that until Moyles became his supervisor it had been possible for the company to accommodate Deschene’s physical condition and for Deschene to perform well in his job. We believe that the evidence is such that a trier of fact could conclude that the reason given for Deschene’s termination was pretextual and that therefore there remained triable issues of material fact as to his claim for discrimination based upon physical disability.” (Deschene, supra, 76 Cal.App.4th at p. 46.)
No election, no waiver: the CBA could not close the courthouse. PPS argued that by initiating and then abandoning arbitration Deschene was bound by his election or had waived any argument that his noncontractual claims lay outside the CBA’s mandatory arbitration clause. (Deschene, supra, 76 Cal.App.4th at p. 46.) The court traced the line from Alexander v. Gardner-Denver Co. (1974) 415 U.S. 36 — which rejected election-of-remedies and waiver theories and held a union cannot bargain away individual statutory antidiscrimination rights — through Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, where an individually signed securities registration bound the employee to arbitrate statutory claims precisely because the agreement “was not the product of a collective bargaining process.” (Id. at p. 47.) Rejecting the Fourth Circuit’s much-criticized extension of Gilmer to CBAs in Austin v. Owens-Brockway Glass Container, Inc. (4th Cir. 1996) 78 F.3d 875, the court followed Torrez v. Consolidated Freightways Corp. (1997) 58 Cal.App.4th 1247, 1259: “a union may not prospectively waive an employee’s right to a judicial forum to hear his or her statutory discrimination claims.” (Id. at p. 48.) In a footnote, the court added the narrower federal rule of Wright v. Universal Maritime Service Corp. (1998) 525 U.S. 70: any CBA waiver of a statutory judicial forum must be “explicitly stated, clear and unmistakable” — a standard this CBA could not meet, since its antidiscrimination clause did not even mention physical disability or retaliation for testimony. (Id. at p. 48, fn. 9.) PPS’s cases all involved individually signed agreements, and the fact that Deschene personally signed the CBA — apparently as one of several union signatories — “does not compel the inference that he personally was agreeing to arbitrate any state law claims he personally might have against his employer.” (Id. at pp. 48–49 & fn. 10.)
Significance
Deschene sits at the junction of three doctrines that recur whenever a unionized California employee sues over a discharge. On preemption, it is a clean application of Lingle and Livadas: FEHA and public-policy claims survive section 301 because their elements are factual and the rights nonnegotiable, and the opinion’s one-sentence “trigger” formulation — preemption only where state law “requires contractual interpretation of the terms in a CBA” (Deschene, supra, 76 Cal.App.4th at p. 40) — is quotable and regularly useful against removal and preemption motions. On arbitration, it aligned California law with Gardner-Denver and Torrez against Austin, and its footnote application of Wright’s “clear and unmistakable” standard supplies a second, independent ground that survives later doctrinal movement in this area: whatever a CBA could waive, a clause that never names the statutory right cannot waive it. (Id. at p. 48 & fn. 9.)
On pretext, the opinion is an instructive employee-side counterpoint to the affirmance line of Horn and its progeny — decided under the very “specific, substantial evidence” standard defendants invoke. What carried the day was not direct evidence of disability animus; the court said plainly that a “direct causal link” was missing. (Deschene, supra, 76 Cal.App.4th at p. 46.) It was process evidence: a manufactured-looking final incident (the pre-positioned replacement operator), selective discipline (no other operator reprimanded for a maintenance problem), deviation from the employer’s own disciplinary practice (no corroborating witness), decisionmaker statements of a desire to be rid of the plaintiff, and a before-and-after accommodation contrast between supervisors. Deschene thus stands for the proposition that a jury may infer discrimination from the fabrication of the stated reason plus circumstances tying the hostility to the protected condition’s burdens — here, a supervisor who refused the insulin, food, and rest accommodations his predecessor had freely given. (Id. at pp. 44–46.) The tension between that holding and the rule that falsity alone does not prove discrimination is real, and later cases patrol the line; Deschene marks its employee-favorable edge.
Key quotes
“The trigger for section 301 of the LMRA preemption is whether the application of state law requires contractual interpretation of the terms in a CBA.” (Deschene, supra, 76 Cal.App.4th at p. 40.)
“Responding to a subpoena and giving truthful testimony when called to testify are unarguably fundamental and substantial policies designed to benefit the public as a whole insofar as the integrity of legal process benefits all citizens.” (Deschene, supra, 76 Cal.App.4th at p. 43.)
“We believe that the evidence is such that a trier of fact could conclude that the reason given for Deschene’s termination was pretextual and that therefore there remained triable issues of material fact as to his claim for discrimination based upon physical disability.” (Deschene, supra, 76 Cal.App.4th at p. 46.)
“. . . a union may not prospectively waive an employee’s right to a judicial forum to hear his or her statutory discrimination claims.” (Deschene, supra, 76 Cal.App.4th at p. 48, quoting Torrez v. Consolidated Freightways Corp. (1997) 58 Cal.App.4th 1247, 1259.)
Practice pointer
For plaintiffs representing unionized employees, Deschene is a three-part playbook. First, plead around preemption deliberately: frame claims on nonnegotiable state rights (FEHA, Labor Code section 230, Tameny-style public policy), and show the CBA’s nondiscrimination clause does not even cover the protected category — that mismatch defeats both section 301 preemption and any Wright waiver argument in one stroke. (Deschene, supra, 76 Cal.App.4th at pp. 42, 48, fn. 9.) Second, an abandoned grievance is not an election: a client who filed and withdrew from CBA arbitration has not forfeited the courthouse. (Id. at pp. 46–49.) Third, build the pretext record Deschene rewards: reconstruct the final incident through coworker witnesses (who was pre-positioned, who else escaped discipline for the same problem), obtain the employer’s disciplinary practices and show deviation, capture management statements of a desire to remove the employee, and document the before-and-after treatment of the disability across supervisors — accommodation history is powerful, inexpensive proof. Be candid about the gap the court itself flagged: without evidence linking the hostility to the disability, the “direct causal link” problem invites summary judgment; the accommodation contrast is what bridged it here. (Id. at p. 46.) For defendants, Deschene warns that a termination staged around a single supervisor’s uncorroborated account — contrary to the company’s own substantiation practice, with a replacement suspiciously ready — will read to a jury as manufactured, whatever the personnel file says.
Open questions
The largest question the court expressly left open is definitional: whether Deschene’s heart condition and diabetes qualified as a FEHA “physical disability” was “neither a disputed nor an undisputed fact. It simply was not ever raised.” (Deschene, supra, 76 Cal.App.4th at p. 45, fn. 8.) In the same footnote the court canvassed the then-new mitigation decisions under the ADA — Sutton v. United Air Lines, Inc. (1999) 527 U.S. 471 and Murphy v. United Parcel Service, Inc. (1999) 527 U.S. 516 — and observed that both “leave open the question whether under the ADA a given individual whose medical condition can be mitigated may still be disabled because the mitigation is either incomplete or itself limits the employee’s ability to perform on the job.” (Ibid.) (California’s Legislature later addressed the mitigation question by statute; the definitional framework lives in Government Code section 12926.) Second, the court applied Wright’s clear-and-unmistakable test without deciding the question Wright itself reserved — whether even an explicit union-negotiated waiver of a statutory judicial forum would be enforceable. (Id. at p. 48, fn. 9.) Third, the opinion holds the termination-night evidence sufficient without specifying how much of the inference travels from “the stated reason was fabricated” to “the real reason was the disability” — the court acknowledged the absence of a “direct causal link” and let the accommodation history and management statements carry the connective weight, leaving the precise quantum for future cases. (Id. at p. 46.)