Indiana Law Review Notes Labor Law Preemption After Belknap, Inc. v. Hale: Has Preemption as Usual Been Permanently Replaced? I. Introduction Federal labor law preemption is, theoretically, a simple concept. Con- gress has mandated that labor-management relations be governed under a federal body of law known as the National Labor Relations Act (NLRA). 1 To provide necessary uniformity in the control of labor- management relations, 2 state interference with the federal scheme has been precluded. 3 Despite this need for uniformity, the United States Supreme Court and the National Labor Relations Board (NLRB), the body created by Congress to administer the NLRA, 4 have recognized certain situations in which state causes of action are not preempted by the federal Act. 5 In practice, however, labor law preemption has been a complex and difficult area. The problems have arisen in the judicial determination of the boundary lines between state or concurrent jurisdiction and exclusive federal jurisdiction. 6 Belknap, Inc. v. Hale1 is the United States Supreme Court's latest pronouncement of the labor law preemption doctrine. In Belknap, the Court found that the NLRA did not preempt state causes of action for misrepresentation and breach of contract brought against an employer by non-union former employees. The employees had been hired to '29 U.S.C. §§ 141-87 (1976). The current version of the NLRA is composed of the National Labor Relations Act (Wagner Act), ch. 372, 49 Stat. 449 (1935), as amended by the Labor-Management Relations Act (Taft-Hartley Act), ch. 120, 61 Stat. 136, (1947), and the Labor-Management Reporting and Disclosure Act of 1959 (Landrum-Griffin Act), Pub. L. No. 86-257, 73 Stat. 519. The present NLRA has also been subject to numerous minor amendments. See, e.g., Act of July 26, 1974, Pub. L. No. 93-360, 88 Stat. 395. 2A uniform body of labor law is necessary to effectively protect rights granted under the NLRA from erosion in state courts and legislatures. See, e.g., Vandeventer v. Local 513, Int'l. Union of Operating Engineers, 579 F.2d 1373 (8th Cir.), cert, denied, 439 U.S. 984 (1978). 'See, e.g., Tyree v. Edwards, 287 F. Supp. 589 (D. Alaska 1968), aff'd sub nom. Alaska v. Local 302, Int'l Union of Operating Engineers, 393 U.S. 405 (1969). 4 29 U.S.C. §§ 141-87 (1976). 'See, e.g., UMW v. Gibbs, 383 U.S. 715 (1966); San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959). 6See Cox, Labor Law Preemption Revisited, 85 Harv. L. Rev. 1337 (1972) [hereinafter cited as Revisited.] 7 103 S. Ct. 3172 (1983). 491 492 INDIANA LAW REVIEW [Vol. 17:491 permanently replace striking workers and were later dismissed to accom- modate returning strikers. 8 The Court examined two preemption doctrines and their exceptions but failed to explicitly rely upon any single reason for the result. 9 This Note will first examine preemption historically, and as applied to the facts of the Belknap case. The Belknap decision's effect upon a variety of issues in labor preemption will then be analyzed. These issues include the im- portance of third parties to the labor contract and parties' rights in labor disputes. Finally, the Note will discuss Belknap 's effect upon the preemp- tion doctrine. II. Labor Law Preemption: Past and Present A. Preemption Before Belknap 1. State Jurisdiction Before the Modern Era of Preemption.—The supremacy clause of the United States Constitution 10 dictates that states may not pass or enforce laws in conflict with the substantive rights granted by federal law. 11 By enacting the National Labor Relations Act, 12 Con- gress exhibited clear intent to regulate certain aspects of labor-management relations. Section 7 of the NLRA protects specified kinds of employee conduct from interference by employers. 13 Section 8 prohibits certain con- duct of both employers and employees. 14 Conduct which interferes with section 7 rights or which is prohibited by section 8 results in an unfair labor practice, triggering the NLRB's power to grant certain remedies to aggrieved parties. 15 Prior to 1959, the United States Supreme Court developed a philosophical inconsistency regarding the extent of state jurisdiction over labor disputes. 16 The case which laid the foundation for this inconsistency was UA W v. Wisconsin Employment Relations Board y ' 7 better known as the Briggs-Stratton case. % Id. at 3175-76. 9 See infra notes 92-110 and accompanying text. ,0 U.S. Const, art. VI, cl. 2. "See, e.g., Edgar v. MITE Corp., 102 S. Ct. 2629 (1982); City of Burbank v. Lockheed Air Terminal, 411 U.S. 624 (1973); Miles v. Illinois Cent. R.R., 315 U.S. 698 (1942); see also Revisited, supra note 6, at 1341. 1229 U.S.C. §§ 141-87 (1976). ""Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively . . . and to engage in other concerted activities . . . ." 29 U.S.C. § 157 (1976). 1429 U.S.C. § 158 (1976). Section 8(a) concerns employers' conduct while § 8(b) describes prohibited conduct of labor organizations. Id. 1 'These remedies include cease-and-desist orders, reinstatement of wrongfully discharged employees and awards of back pay. The NLRB's orders are enforced by the United States District Courts. 29 U.S.C. § 160 (1976). l6See infra notes 18-33 and accompanying text. ,7336 U.S. 245 (1949). 1984] LABOR LAW PREEMPTION 493 In Briggs-Stratton, a union's tactic for pressuring the employer called for a long series of unannounced meetings of uncertain duration, designed to have greater effect upon the employer's business than would a strike. 18 Although these work stoppages were unfair labor practices under state law, 19 the United States Supreme Court found the conduct to be neither protected nor prohibited by the NLRA. 20 The Court allowed a state in- junction to stand, refusing to hold that the NLRA preempted the state statute. 21 The Court reasoned that congressional silence could not be in- terpreted as condoning the conduct, and concluded that the state must have jurisdiction because the conduct would otherwise go ungoverned. 22 Briggs-Stratton generalized that unprotected and unprohibited conduct not governed by the NLRA is within state control. 23 Four years later, in Garner v. Teamsters Local 776™ the United States Supreme Court impliedly recognized that statutory and NLRB silence regarding certain activity did not necessarily require a finding of state jurisdiction. In Garner, union members who were not employees picketed an employer to persuade the company to influence its employees to join the union. 25 The employer won an injunction in state court because the picketing violated the state labor relations statute. 26 The Court found that the conduct was prohibited by section 8 of the NLRA, and was, therefore, within the NLRB's jurisdiction. 27 The Court held that the state was precluded from providing relief to the employer, 28 noting that the con- flicting remedies in state and NLRB proceedings justified preemption here. 29 li Id. at 249. "Wisconsin Employment Peace Act, Wis. Stat. § 111.06(2) (1947). 20336 U.S. at 253. In examining preemption under the NLRA, the Court considered there to be basically three classes of conduct: conduct protected by § 7 of the NLRA, con- duct prohibited by § 8, and conduct neither protected by § 7 nor prohibited by § 8. See, e.g., UAW v. O'Brien, 339 U.S. 454 (1950) (involving conduct protected by § 7); Garner v. Teamsters Local 776, 346 U.S. 485 (1953) (involving conduct prohibited by § 8). See generally Revisited, supra note 6, at 1340. Under modern analysis, still ten years in the future, the conduct may have been both arguably protected by § 7 and arguably prohibited by § 8. See infra notes 35-46 and accompanying text. 21 336 U.S. at 264-65. See Revisited, supra note 6, at 1347. "336 U.S. at 254. "Id. at 246-47. See also Revisited, supra note 6, at 1347-48. 24346 U.S. 485 (1953). "Id. at 487. "Pennsylvania Labor Relations Act, Pa. Stat. Ann. tit 43, § 211.6 (Purdon 1952). 27 346 U.S. at 488. Unlike Briggs-Stratton, the Court in Garner avoided adjudicating whether the conduct in issue was actually prohibited by the NLRA. Instead, the Court noted that "Congress has taken in hand this particular type of controversy .... The power and duty of primary decision lies with the [NLRB], not with us. But it is clear that the Board was vested with power to entertain petitioners' grievance . . . ." Id. at 488-89. Under modern preemption analysis, the conduct involved in Garner may have been better classified as arguably prohibited. See infra notes 35-46 and accompanying text. "346 U.S. at 501. 29 Id. at 498. The conflict lies in remedies, not rights. The same picketing may injure both 494 INDIANA LAW REVIEW [Vol. 17:491 Although facially reconcilable because Briggs-Stratton involved con- duct neither protected by section 7 of the NLRA nor prohibited by sec- tion 8 30 while Garner concerned activity prohibited by section 8, 31 the cases were inconsistent philosophically. Briggs-Stratton generalized that conduct not regulated by the NLRA must be left to state control. 32 Conversely, Garner recognized that Congress could indicate, through statutory silence, that certain kinds of conduct are beyond state control, even if not ex- pressly regulated by the NLRA. 33 In 1959 the United States Supreme Court was faced with a case which required further subdivision of conduct under the NLRA in order to avoid the conflict between the foundations of Briggs- Stratton and Garner. San Diego Building Trades Council v. Garmon™ marked the beginning of the modern approach to preemption. 2. Garmon and the Modern Approach: The Birth of "Arguable" Conduct.—In San Diego Building Trades Council v. Garmon , 35 the United States Supreme Court was presented with facts which highlighted the in- consistent philosophies of Briggs-Stratton and Garner.™ The result was a new preemption doctrine. public and private rights. But when two separate remedies are brought to bear on the same activity, a conflict is imminent. It must be remembered that peti- tioners' state remedy was a suit for an injunction prohibiting the picketing. The federal Board, if it should find a violation of the [NLRA], would issue a cease- and-desist order and perhaps obtain a temporary injunction to preserve the status quo. Or if it found no violation, it would dismiss the complaint, thereby sanc- tioning the picketing. To avoid facing a conflict between the state and federal remedies, we would have to assume either that both authorities will always agree as to whether the picketing should continue, or that the State's temporary injunc- tion will be dissolved as soon as the federal Board acts. But experience gives no assurance of either alternative, and there is no indication that the [NLRA] left it open for such conflicts to arise. Id. at 498-99 (footnote omitted). The Court did, however, recognize as an exception the state's interest in restraining violent conduct. Id. at 488. Thus, the Court's premise in Garner was that, as a general rule, dual jurisdiction was unworkable due to the resulting diversities and conflicts that would frustrate the congressional purpose of a uniform national body of labor law. Id. at 500. i0See supra note 20 and accompanying text. 31 See supra note 27 and accompanying text. 32 See supra note 23 and accompanying text. 33 346 U.S. at 500. "For a state to impinge on the area of labor combat designed to be free is quite as much an obstruction of federal policy as if the state were to declare picketing free for purposes or by methods which the federal Act prohibits." Id. Briggs- Stratton survived for many years as an anomaly in preemption law. Prior to Belknap, every case since Briggs-Stratton followed Garner's philosophy, which allows for a zone of unregulated conduct. No direct conflict with Briggs-Stratton arose until International Assn. of Machinists v. Wisconsin Employment Relations Comm., 427 U.S. 132 (1976), which car- ried the Garner philosophy to a fact situation more like that of Briggs-Stratton. See infra notes 47-68 and accompanying text. 34 359 U.S. 236 (1959). "Id. ™See supra notes 30-33 and accompanying text. 1984] LABOR LAW PREEMPTION 495 Garmon involved a union's picketing to pressure an employer to recognize a closed shop37 despite the company's insistence that the employees desired to remain non-union. 38 The company successfully sued in state court to enjoin the picketing and for damages to compensate for business losses attributable to the union's activity. 39 The Court was unable to follow either Briggs-Stratton or Garner without overruling or severely damaging the other. 40 The conduct's classification was unclear. The Court refused to hold that the conduct was protected by section 7 of the NLRA or prohibited by section 8, noting that such a finding was exclusively within the jurisdiction of the NLRB. 41 The Court was, therefore, unable to follow Garner, which had involved conduct prohibited by section 8, without overruling Briggs-Stratton. 42 To follow Briggs-Stratton would have been an equally unpleasant solution, 37The union desired an agreement with the employer to the effect that only employees who belonged to the union or those who applied for membership within thirty days would be permitted to remain employed. 359 U.S at 237. n Id. i9 Id. at 237. The United States Supreme Court held that federal law preempted the equitable claim in San Diego Building Trades Council v. Garmon, 353 U.S. 26 (1957), and remanded the damages claim to the state court, where it was upheld. Garmon v. San Diego Bldg. Trades Council, 49 Cal. 2d 595, 320 P.2d 473 (1958). The Garmon doctrine was an- nounced when the Court subsequently reviewed the damages judgment. 359 U.S. 236 (1959). Simultaneously with the commencement of the state suit, the employer began a representa- tion proceeding before the NLRB so that the employees would have the opportunity to vote for or against representation by the union. Id. at 238. The Board declined to hear the case "presumably because the amount of interstate commerce involved did not meet the Board's monetary standards in taking jurisdiction." Id. *°Revisited, supra note 6, at 1348-49. "The court stated: At times it has not been clear whether the particular activity . . . was governed by § 7 or § 8 or was, perhaps, outside both these sections. But courts are not primary tribunals to adjudicate such issues. It is essential to the administration of the [NLRA] that these determinations be left in the first instance to the [NLRB]. The case before us is such a case. 359 U.S. at 244-45. The NLRB's primary jurisdiction over conduct governed under the NLRA was recognized before Garmon. Six years earlier, the Court, in Garner, noted: Congress did not merely lay down a substantive rule of law to be enforced by any tribunal competent to apply law generally to the parties. It went on to confide primary interpretation and application of its rules to a specific and specially constituted tribunal and prescribed a particular procedure for investigation, com- plaint and notice, and hearing and decision, including judicial relief pending a final administrative order. 346 U.S at 490. By 1959, Briggs-Stratton's view of the NLRB's jurisdiction was clearly out of favor. In Garmon, the Court noted that "the approach taken in [Briggs-Stratton], in which the Court undertook for itself to determine the status of the disputed activity, has not been followed in later decisions, and is no longer of general application." 359 U.S. at 245 n.4. "Revisited, supra note 6, at 1348-49. See supra notes 17-33 and accompanying text. 496 INDIANA LAW REVIEW [Vol. 17:491 because to do so would have been inconsistent with Garner's philosophy. 43 The Court's solution was to further subdivide the categories of con- duct. In addition to conduct clearly protected by section 7 of the NLRA or prohibited by section 8 and conduct clearly not protected or prohibited, the Court now recognized conduct arguably protected or prohibited. Gar- mon did not affect preemption cases involving the former two categories of conduct. 44 Rather, Garmon's significance was in the Court's holding that "[w]hen an activity is arguably subject to section 7 or section 8 of the [NLRA], the states as well as the federal courts must defer to the exclusive competence of the [NLRB] if the danger of state interference with national policy is to be averted." 45 It is this standard, that state causes of action will be preempted if they involve conduct actually or arguably protected by section 7 or prohibited by section 8, that is known as the Garmon doctrine. 46 Subsequent to Garmon there remained a dividing line in the spec- trum of conduct. Prior to Garmon , that line was drawn between conduct that clearly was subject to the protections of the NLRA's section 7 or the prohibitions imposed by section 8, and activity that clearly was not. Garmon recognized that labor and management conduct was not always amenable to classification in such absolute terms. The Court, therefore, shifted the dividing line, placing conduct actually or arguably subject to section 7 or section 8 of the NLRA on one side and all other conduct on the opposite side. Both sides of this line have been subject to change. The side of preemption analysis involving the former category of conduct became confused in Sears, Roebuck & Co. v. San Diego District Council of Carpenters.* 1 The latter category, at the time of Garmon, had been controlled by Briggs-Stratton.™ Subsequently, Briggs-Stratton was replaced 43 See supra notes 30-33 and accompanying text. See also Revisited, supra note 6, at 1349. "Conduct clearly unprotected or unprohibited was not addressed in Garmon. Thus, Briggs-Stratton remained intact although severely limited in its application. 359 U.S. at 245 n.4. Also, the Court reaffirmed that activity clearly subject to § 7 or § 8 of the NLRA called for preemption. Id. at 244. 45 Id. at 245. "Revisited, supra note 6, at 1349. See generally Brody, Labor Preemption Again— After the Searing of Garmon, 13 S.W.U.L. Rev. 201 (1982); Cox, Recent Developments in Labor Law Preemption, 41 Ohio St. L.J. 277 (1980) [hereinafter cited as Recent Developments]. Although the doctrine was broadly stated, the Court in Garmon recognized exceptions to preemption where "the activity regulated was a merely peripheral concern of the . . . Act . . . [o]r where the regulated conduct 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 states of the power to act." 359 U.S. at 245. 47436 U.S. 180 (1978). See infra notes 59-76 and accompanying text. 4,This category was conduct clearly not subject to § 7 or § 8 of the NLRA. Briggs- Stratton operated such that when this kind of conduct was involved, the NLRA would not preempt state law. See supra notes 17-23 and accompanying text. 1984] LABOR LAW PREEMPTION 497 with a new rule in International Association of Machinists v. Wisconsin Employment Relations Commission. 49 3. Machinists and Sears: The Complications Set In.—a. Machinists: No state interference with economic weapons.—Machinists broke new ground by explicitly overruling Briggs-Stratton's holding that conduct clearly not protected by section 7 of the NLRA or prohibited by section 8 was necessarily within the jurisdiction of the states. 50 Machinists involved union members' concerted refusal to work over- time during contract negotiations with the employer. The employer filed an unfair labor practice charge with the NLRB and also filed a complaint with the Wisconsin Employment Relations Commission (WERC). The federal unfair labor practice charge was dismissed by the NLRB, which found no violation of the NLRA. 51 The union's activity did, however, constitute an unfair labor practice under state law. 52 The Court held that the state cause of action was preempted and, in so holding, overruled Briggs-Stratton. 5i The majority in Machinists focused upon "whether Con- gress intended that the conduct involved be unregulated because left 'to be controlled by the free play of economic forces.' " 54 The crucial in- quiry was "whether 'the exercise of plenary state authority to curtail or entirely prohibit self-help would frustrate effective implementation of the 49427 U.S. 132 (1976). See infra notes 50-57 and accompanying text. 50 In so holding, the Court extended the philosophy enunciated in Teamsters Local 20 v. Morton, 377 U.S. 242 (1964). In Morton, the union had gone on strike and also engaged in activities designed to induce the employer's suppliers and customers to cease doing business with the employer. Id. at 255. This was a kind of secondary boycott which Congress had scrutinized but which it had not proscribed in the 1959 amendments to the NLRA. Id. at 259-60. See generally Labor-Management Reporting and Disclosure Act of 1959 (Landrum-Griffin Act), Pub.L. No. 86-257, 73 Stat. 519 (1959). Although the conduct was neither protected by § 7 nor prohibited by § 8 of the NLRA, the United States Supreme Court reasoned that Congress had intended this activity to remain available to parties to a labor dispute. 377 U.S. at 258. The Court refused to allow the state to prohibit the con- duct because to have held otherwise would have upset the balance of bargaining power between management and labor sought to be achieved by the NLRA. Id. Briggs-Stratton was impliedly distinguished in that Morton involved clear congressional intent to leave this kind of conduct available to labor disputants. Revisited, supra note 6, at 1352. Thus, the Court was not barred from holding that the NLRA preempted the state statute. Professor Cox foresaw the potential for broad application of the Morton principle, essentially an ex- tension of Garner, to cover conduct not protected or prohibited, four years before the Machinists decision. Id. 51 427 U.S. at 135. "Id. See Wisconsin Employment Peace Act, Wis. Stat. § 111.06(2) (1974). The WERC's position was that because the conduct was neither arguably protected by § 7 nor prohibited by § 8 of the NLRA, the state was not preempted from issuing a cease and desist order. 427 U.S. at 135. 53427 U.S. at 154. Briggs-Stratton had held that if conduct was not protected by § 7 nor prohibited by § 8, it was necessarily within state jurisdiction. See supra notes 17-23 and accompanying text. 54427 U.S. at 140 (quoting NLRB v. Nash-Finch Co., 404 U.S. 138, 144 (1971)). 498 INDIANA LAW REVIEW [Vol. 17:491 Act's processes.' " 55 The Court reasoned that because Congress had enacted a comprehensive body of labor law and had been specific in outlawing the use of certain economic weapons, 56 congressional silence could not be interpreted as an indication of approval of state interference with other such weapons. 57 Until Belknap, Inc. v. Hale, 5 * Machinists represented the last word on whether state laws or suits involving conduct neither pro- tected nor prohibited by the NLRA would be preempted. b. Sears: What happened to Garmon?—Although Machinists was limited to the neither protected nor prohibited side of preemption analysis, Sears, Roebuck & Co. v. San Diego County District Council of Carpenters59 examined the arguably or actually protected or prohibited side. Sears recognized Garmon as controlling, 60 but injected uncertainty into the future application of the Garmon doctrine. Sears involved non-employee union members' trespassory picketing upon the employer's private property. 61 The employer successfully sued in state court to enjoin a continuing trespass. The California Supreme Court reversed the judgment, holding that the picketing was both arguably protected by section 7 and arguably prohibited by section 8 of the NLRA and that the state injunction was therefore preempted under Garmon. 62 The employer brought the case before the United States Supreme Court. The Court was faced with a dilemma. The conduct was both arguably protected under section 763 and arguably prohibited under section 8, 64 thus 55427 U.S. at 147-48 (quoting Railroad Trainment v. Jacksonville Terminal Co., 394 U.S. 369, 380 (1969)). "An economic weapon is the right to engage in self-help activities, sanctioned by the NLRA, and is designed to put pressure upon the opposing party in a labor dispute. A well-known example is the right to strike. "427 U.S. at 143-48. The Court did, however, recognize the Garmon exceptions of local interest and peripheral concern, as well as the state's interest in policing violence. Id. at 136-37. See supra note 46. Justice Powell and Chief Justice Burger concurred with the understanding that the states would remain free to enforce "neutral" state laws in the context of a labor dispute. 427 U.S. at 155-56. Neutral state laws were defined as "state laws that are not directed toward altering the bargaining positions of employers or unions but which may have an incidental effect on relative bargaining strength." Id. at 156. This concurring opinion was necessary in reaching a majority. Justices Stevens, Stewart and Rehn- quist dissented and would not have overruled Briggs-Stratton. Id. 5g 103 S. Ct. 3172 (1983). 59436 U.S. 180 (1978). 60 Id. at 187-88. 61 Id. at 182. The Sears store was situated in the center of a large lot and was sur- rounded by sidewalks and ample parking area. The pickets occupied the sidewalk adjacent to the store and also the adjoining parking lot. The picketing's purpose was to protest the use of non-union labor in the remodeling project. Id. 62 Sears, Roebuck & Co. v. San Diego County District Council of Carpenters, 17 Cal. 3d 893, 553 P.2d 603, 132 Cal. Rptr. 443 (1976). "The union's action would have been protected by § 7 if the sole purpose of the picketing had been to pressure the employer into applying area union labor standards to its non-union employees. 436 U.S. at 186-87. 64The picketing may have been prohibited by § 8 if the object was to force the employer 1984] LABOR LAW PREEMPTION 499 Garmon pointed to preemption. 65 A finding of preemption, however, would have practically denied a remedy to Sears because it could not have challenged the trespassory nature of prohibited picketing, 66 and it could not challenge protected picketing at all. 67 The Court adhered to Garmon's basic purpose of protecting the NLRB's primary jurisdiction. The Court stated, however, that it is only where the controversy presented to the state court is identical to . . . that which could have been, but was not, presented to the [NLRB] . . . that a state court's exercise of jurisdiction necessar- ily involves a risk of interference with the . . . jurisdiction of the [NLRB] which the arguably prohibited branch of the Gar- mon doctrine was designed to avoid. 68 The Court found that the controversy before the state court differed from that which could have been presented to the NLRB because the federal issue would have been concerned with the objective of the picketing while the state cause of action examined the picketing location. 69 The Court reasoned, therefore, that "permitting the state court to adjudicate Sears' trespass claim would create no realistic risk of interference with the [NLRB's] primary jurisdiction to enforce the statutory prohibition against unfair labor practices." 70 to assign work to employees from a particular labor organization or to force Sears to bargain with the union where Sears' employees had not agreed to be represented by the union. Id. at 185-86. 65Brody, supra note 46, at 214-16. Garmon calls for preemption when the conduct in issue is actually or arguably protected by § 7 or prohibited by § 8 of the NLRA. Although Gar- mon recognized exceptions where the conduct was a peripheral concern of the NLRA and where the activity touched interests deeply rooted in local feeling and responsibility, these exceptions were of no use to the Court in Sears. The peripheral concern exception was not applicable given the Act's central concern with picketing. Further, the local feeling ex- ception has never been extended to include conduct protected by the NLRA. Brody, supra note 46, at 214-16. 66 "[I]f Sears had filed an unfair labor practice charge against the union, the [NLRB's] concern would have been limited to the question whether the Union's picketing had an objective proscribed by the [NLRA]; the location of the picketing would have been irrele- vant." 436 U.S. at 186. 67Broady, supra note 46, at 213-14. If the picketing was protected by § 7, only a union could have filed an unfair labor practice charge based on Sears' interference with the right to picket. Id. at 214. This, the union did not do. 436 U.S. at 187. 68436 U.S. at 197 (footnote omitted). 69 Id. at 198. 70 Id. The Court also held that Garmon's arguably protected branch did not require preemption. Belknap, Inc. v. Hale, however, does not involve any manner of protected activity. This aspect of Sears analysis is thus beyond the scope of this Note. Generally, the Sears analysis of Garmon's arguably protected prong examines a party's reasonable lack of a federal remedy and the amount or risk of interference by the state cause of action with the protected conduct. See, e.g., Brody, supra note 46; Recent Developments, supra note 46. 500 INDIANA LAW REVIEW [Vol. 17:491 Sears' effect upon the doctrine of preemption is not clear. It does not affect cases involving clearly protected or prohibited conduct. 71 It also reaffirms Garmon's exceptions to preemption where ''the activity regulated [is] a merely peripheral concern of the . . . [NLRA] . . . [o]r where the regulated conduct 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 states of the power to act." 72 Sears does, however, add an exception where the controversy presented to the state court differs from that which could be brought before the Board. 73 One commentator criticized Sears as being analytically defective, 74 sug- gesting that while Sears purported to follow Garmon, it is really the an- tithesis of Garmon's rationale. 75 He stated that "Garmon's reasoning is designed to safeguard NLRB primary jurisdiction. Therefore, Garmon im- plies the need to avoid, as much as possible, any concurrent or overlap- ping jurisdiction by the Board and state courts. Sears, however, tolerates overlapping jurisdiction and even extends it to the protected activity area." 76 That such criticism was justified is apparent from the United States Supreme Court's recent decision in Belknap, Inc. v. Hale. 11 B. Preemption in Belknap, Inc. v. Hale Petitioner, Belknap, Inc., had recognized Teamsters Local No. 89 as the exclusive bargaining representative for its warehouse and maintenance employees. After reaching an impasse during negotiations for a new labor contract, approximately 400 employees struck over economic issues. 78 The employer then granted, without union approval, a wage increase as a reward to union employees who had continued to work. It also advertised 7 'The conduct involved in Sears was both arguably protected by § 7 and arguably prohibited by § 8. See supra notes 63-64 and accompanying text. However, the conduct could not have been clearly protected or prohibited since the controversy had not been before the NLRB, the only body with jurisdiction to adjudicate the status of the parties' conduct. See supra note 41. 72 359 U.S. at 245. 73 Brody, supra note 46, at 225. See supra text accompanying note 68. 74 Brody, supra note 46, at 223. 75 Id. 16 Id. Professor Brody appears to have viewed Sears as an implied attack upon Gar- mon's foundation, rather than an exception. Professor Cox does not share this view. In- stead, he is satisfied with the soundness of Sears, but states that the decision "[does] nothing to clarify the principles that govern . . . preemption in labor law." Recent Developments, supra note 46, at 300. 77 103 S. Ct. 3172 (1983). 78The purpose of an economic strike is to win economic concessions from the employer. This is in contrast to an unfair labor practice strike, the object of which is to protest an employer's violation of the NLRA. 1984] LABOR LAW PREEMPTION 501 for permanent replacements. 79 Several employees, including the respondents, were hired. 80 Both the union and the company filed unfair labor practice charges with the NLRB, which later issued complaints against both parties. 81 The NLRB's complaint alleged that the employer's unilateral wage increase violated the NLRA. 82 The employer made assurances of permanent employ- ment to the replacements, both before and after the NLRB's complaints were issued. 83 Approximately three months later, the Regional Director for the Na- tional Labor Relations Board called a meeting with the employer and the union and told them that he would dismiss all charges and complaints in exchange for a settlement agreement. 84 The parties' compromise re- quired the company to recall a minimum of 35 strikers per month, until all strikers had been offered reinstatement. 85 The company eventually laid off the "permanent" replacements to accommodate returning strikers. 86 The terminated replacements then brought suit in state court against Belknap, alleging misrepresentation and breach of contract. 87 Each 79The relevant portion of the advertisement stated: "PERMANENT EMPLOYEES WANTED . . . OPENINGS AVAILABLE FOR QUALIFIED PERSONS LOOKING FOR EMPLOYMENT TO PERMANENTLY REPLACE STRIKING . . . EMPLOYEES." 103 S. Ct. at 3174-75 n.l. 80Each replacement signed the following form: "I, the undersigned, acknowledge and agree that I as of this date have been employed by Belknap, Inc. . . . as a regular full-time permanent replacement to permanently replace in the job classification of " 103 S. Ct. at 3175. 8 'In response to the charges filed, the Regional Director for the National Labor Rela- tions Board issued two complaints. The first, against the employer, alleged that Belknap wrongfully granted a wage increase without notice to the union. A second complaint was issued against the union, alleging picket line violence. Brief for the National Labor Rela- tions Board as Amicus Curiae at 2-3, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). 82 103 S. Ct. at 3175. 83Prior to the NLRB's complaints, Belknap issued a letter to all permanent replace- ment employees which stated, in part, "you will continue to be permanent replacement employees so long as you conduct yourselves in accordance with [company] policies and practices .... [W]e have no intention of getting rid of the permanent replacement employees just in order to provide jobs for [returning] strikers." Id. at 3175. After the complaints were issued, the company stated: "We want to make it perfectly clear, once again, that there will be no change in your employment status as a result of the charge by the National Labor Relations Board . . . ." Id. 84The issue of strikers' reinstatement had been the major stumbling block in settling the strike. The union had insisted upon immediate reinstatement for all strikers, a condition rejected by Belknap. The Regional Director then suggested a compromise calling for gradual reinstatement according to a fixed schedule. Brief for Petitioner at 5, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983) (citing Record at 87). 85 103 S. Ct. at 3176. "Id. %1 Id. The laid-off replacements alleged that the company had represented that the replacements were to be permanent employees, knowing that the representations were false and that the replacements would detrimentally rely upon them. The replacements further 502 INDIANA LAW REVIEW [Vol. 17:491 replacement claimed compensatory and punitive damages totalling $500,000. Although Belknap won a summary judgment at the trial court, the Kentucky Court of Appeals reversed the decision. 88 Relying upon the 1966 United States Supreme Court decision, Linn v. United Plant Guard Workers,* 9 the state court held that the state causes of action were not preempted by the NLRA90 because they were within the local interest and peripheral concern exceptions to the Garmon rule. 91 The United States Supreme Court affirmed the judgment of the Ken- tucky Court of Appeals by a 6 to 3 decision. Justice Whiter majority opinion92 concluded that the replacements' state causes of action were not preempted by the NLRA. The Court first rejected the argument that either the misrepresentation or breach of contract claim was preempted under the rule of Machinists** The majority recognized that the Machinists doc- trine may operate to preempt a state claim which concerns conduct neither protected by section 7 nor prohibited by section 8 of the NLRA where Congress intended the conduct to remain unregulated and available as an economic weapon. 94 However, in Belknap, the Court refused to infer the congressional intent that an employer may exercise an economic weapon made available by the NLRA95 so as to be insulated from liability for alleged that the layoffs were in breach of the employment contracts between Belknap and the non-union replacements. Id. In states which continue to adhere to the doctrine of employment-at-will, a state cause of action may be unavailable because individual contracts of employment are terminable at the will of either party. See, e.g., Shaw v. S. S. Kresge Co., 167 Ind. App. 1, 328 N.E.2d 775 (1975). Kentucky, where Belknap originated, re- tains the employment-at-will doctrine. Louisville & Nashville R.R. v. Marshall, 586 S.W.2d 274 (Ky. Ct. App. 1979). The doctrine is, however, subject to contractual modification. Id. That the employment contract in Belknap was for a "permanent" term, thus a contract- ual modification of the common law rule, is the likely explantion for the employees' breach of contract claim being recognized in Kentucky. It is also possible that Belknap impliedly abolishes employment-at-will. This issue is, however, beyond the scope of this Note. For an extended discussion of the doctrine, see Murg & Scharman, Employment-at-Will: Do the Exceptions Overwhelm the Rule?, 23 B.C.L. Rev. 329 (1982). "103 S. Ct. at 2176. "383 U.S. 53 (1966). Linn involved libelous statements made in the context of a labor dispute. The United States Supreme Court held that a state cause of action for malicious libel was not preempted by the NLRA because such an action was of peripheral concern to the Act and there existed an overriding state interest in protecting citizens from such conduct. Thus, the case fell within the Garmon exceptions of local interests and deeply rooted local feeling. Id. at 61-62. See infra notes 214-16 and accompanying text. 90 103 S. Ct. at 3176. 91 See supra text accompanying note 72. "Chief Justice Burger and Justices Rehnquist, O'Connor and Stevens joined in Justice White's opinion. "103 S. Ct. at 3177. 94 Id. (citing 427 U.S. 132, 140, 147-48). "The economic weapon involved is the employer's privilege to hire permanent replacements during an economic strike. Under federal law, an employer faced with a strike over economic issues may hire permanent replacements who may be retained in preference 1984] LABOR LAW PREEMPTION 503 otherwise actionable breaches of contract or misrepresentations. 96 Belknap argued that the imposition of liability for the firing of per- manent replacements would either dissuade employers from hiring per- manent replacements at all, or would encourage employers to refuse to settle strikes. 97 Thus, these state claims would necessarily interfere either with an employer's use of an economic weapon or with the federal policy of encouraging the settlement of labor disputes. Justice White rejected this argument, reasoning that Congress did not intend to preempt state law where the use of an economic weapon injures * 'innocent third parties." 98 The Court rejected the NLRB's position on the issue of state interference with economic weapons and federal policy by finding that the employer could have acted consistently with both federal and state law. 99 The Court's novel suggestion to the employer was to hire the replacements "permanently," subject to an NLRB order to reinstate the strikers or to a negotiated settlement with the union. 100 The Court stated: An employment contract . . . promising permanent employ- ment, subject only to settlement . . . and to a Board . . . order . . . would not in itself render the replacement a temporary employee subject to displacement by a striker over the employer's objection during or at the end of ... a purely economic strike to strikers who offer to return to work. The requirement that the replacements be given permanent status provides the "legitimate and substantial business justifications" which are necessary to override strikers' interests in reinstatement. Laidlaw Corp. v. NLRB, 414 F.2d 99, 105 (7th Cir. 1969) (citing NLRB v. Mackay Radio & Tel. Co., 304 U.S. 333 (1938)). However, if the strike is in protest of an employer's unfair labor practice, federal law re- quires that the strikers be reinstated whether or not permanent replacements were hired. 103 S. Ct. at 3174. 96 103 S. Ct. at 3177-78. 9 'Belknap argued: If an employer could be subjected to substantial financial liability for agree- ing to recall the strikers as part of a strike settlement agreement, as a practical matter, the employer would have the alternative of either being constrained from hiring permanent replacements altogether, in which case the theoretical right becomes illusory; or the employer could hire permanent replacements and thereafter be constrained to refuse to agree to recall the striking employees even though such agreement might settle a labor strike. The latter situation would inevitably pro- long economic strikes and frustrate the collective bargaining process. Brief for Petitioner at 19, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). 98 103 S. Ct. at 3178. The Court stated: It is one thing to hold that the federal law intended to leave the employer and the union free to use their economic weapons against one another, but is quite another to hold that either the employer or the union is also free to injure innocent third parties without regard to the normal rules of law governing those relationships. We cannot agree . . . that Congress intended such a lawless regime. Id. "Id. at 3179. 100 Id. 504 INDIANA LAW REVIEW [Vol. 17:491 .... Those contracts . . . create a sufficient permanent arrange- ment to permit the prevailing employer to abide by its promises. 101 The Court also held that neither the contract claim nor the misrepresentation claim was preempted under the Garmon rule. 102 The opinion noted that "[ujnder Garmon, a state may regulate conduct that is of only peripheral concern to the Act or which is so deeply rooted in local law that courts should not assume that Congress intended to preempt the application of state law." 103 Justice White relied upon three cases to conclude that both state claims fell within the Garmon excep- tions. Linn v. United Plant Guard Workers,* 04 also relied upon by the state court in Belknap, held that a state cause of action for malicious libel fell within both the peripheral concern and the deeply rooted local interest exceptions. 105 Farmer v. United Brotherhood of Carpenters, 106 held that a state claim for intentional infliction of emotional distress also fell within these exceptions. 107 The Court in Belknap also relied upon Sears, Roebuck & Co. v. San Diego County District Council of Carpenters. 10 * The Belknap opinion viewed Sears as requiring that the controversies which could be brought both in the state court and before the NLRB must be identical to preempt the state cause of action. 109 In Belknap, the con- troversies differed because the focus of the state cause of action was on the rights of the replacements while any potential NLRB action would focus upon the rights of the strikers. 110 101 Id. 102The Garmon rule holds that where activity is actually or arguably prohibited by § 8 of the NLRA, the state cause of action is preempted. The majority concluded this to be the case even if the hiring of the replacements was itself an unfair labor practice prohibited by § 8. The hiring could have been so classified if the unilateral wage increase granted by the employer during the strike had converted the strike into an unfair labor practice strike. The unfair labor practice would be interference with the right to strike, a right protected by § 7 of the NLRA. The interference would be the permanent replacement of unfair labor practice strikers, who are entitled to automatic reinstatement at the conclusion of the strike. See, e.g., NLRB v. Fleetwood Trailer Co., 389 U.S. 375 (1967). 375 (1967). 103 103 S. Ct. at 3182. I04 383 U.S. 53 (1966). ]05 See supra note 89 and accompanying text. I06430 U.S. 290 (1977). 107Farmer involved a union member's state cause of action against his union for inten- tional infliction of emotional distress. The Court concluded that the claim was not preempted. The Court analogized the claim to those involving violence or malicious libel. See Linn v. United Plant Guard Workers, 383 U.S. 53 (1966) (involving malicious libel); UAW v. Russell, 356 U.S. 636 (1958) (involving violence). Thus, the cause of action in Farmer was found to be within the peripheral concern and local interest exceptions. See infra notes 217-24 and accompanying text. I08436 U.S. 180 (1978). 109 103 S. Ct. at 3183. See infra notes 227-35 and accompanying text. ,10 103 S. Ct. at 3183. See infra notes 147-55, 227-35 and accompanying text. 1984] LABOR LAW PREEMPTION 505 Thus, neither the contract claim nor the misrepresentation claim was preempted under the Machinists doctrine because Congress did not in- tend the activity to go unregulated. Nor was either claim preempted under Garmon because both claims fell within the peripheral concern and deeply rooted local interest exceptions. Justice Blackmun concurred in the judgment, but was unwilling to join the majority's analysis. His primary criticism of the decision was that the Court had not deferred to the NLRB's interpretation of the Act regard- ing permanent replacements. 111 His concern was that the Court's stand- ard of conditional permanence 112 would not satisfy the requirement of the substantial and legitimate business justifications which must be met if the employer is to retain replacements in preference to economic strikers. 113 The concurring opinion went on to suggest that an employer who chooses to retain replacements hired under the majority's standard would be open to unfair labor practice charges of threat of reprisal or of discouraging employees' rights to strike. 114 Although Justice Blackmun recognized that this was a difficult case that did not comfortably fit within existing preemption analysis, he joined the majority's finding of no preemption. He recognized that an employer must show a substantial and legitimate business justification in order to retain replacement employees in preference to returning strikers. 115 Justice Blackmun also recognized that a promise of permanent employment pro- vides this justification. 116 He reasoned that such a promise would not pro- vide the required justification unless the employer was bound to perform by the terms of that promise. 117 Justice Blackmun concluded that because 111 103 S. Ct. at 3184 (Blackmun, J., concurring). The NLRB would not have recog- nized the Court's new standard of permanence and would have held the state claims pre- empted. Id. 112 Justice Blackmun interpreted the Court's standard as meaning that "the jobs are permanent unless [the employer] later decides they are temporary. Such a promise bears little resemblance to a promise of permanent employment." Id. at 3185. il3 Id. In order to retain replacement workers in preference to returning economic strikers, the employer must show a substantial and legitimate business justification for doing so. NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378 (1967). One example of such a justifica- tion is where the replacements have been hired permanently in order for the business to remain in operation. Id. at 379. ll4 Justice Blackmun reasoned that the majority's conditional promise of permanent employment would allow an employer to threaten to retain replacement employees in preference to returning strikers even though he has not obligated himself to do so. 103 S. Ct. at 3185 (Blackmun, J., concurring). usSee supra note 113. 116 Id. 117 Justice Blackmun stated: This power to override the economic strikers' statutory entitlement to reinstate- ment must be based on the common-sense notion that, in order to continue to operate the business, the employer was required to obligate himself to third parties in a manner inconsistent with the strikers' right to a subsequent reinstatement. 506 INDIANA LAW REVIEW [Vol. 17:491 state law is the only method of enforcing a promise of permanent employ- ment, federal law must presume the enforceability of the state cause of action. 118 Thus, the concurring opinion would have held that the state causes of action were not preempted under Machinists because Congress did not intend the activity to be unregulated. 119 Justice Blackmun also refused to hold that the replacements' claims were preempted under Gar- mon, because he could find no conduct, either actually or arguably, protected by section 7 or prohibited by section 8 of the NLRA. 120 Justice Brennan, joined by Justices Marshall and Powell, dissented and would have held that the NLRA preempted both state claims. 121 The dissent viewed the contract claim as preempted under the Garmon doc- trine. The opinion noted that the strike could have been an unfair labor practice strike from near the beginning, had the parties not settled their dispute and had the NLRB held that Belknap's wage increase was an un- fair labor practice. 122 The breaching conduct was, therefore, ''arguably required" by federal law. 123 Justice Brennan conceded that arguably re- quired activity was not explicitly covered by the Garmon standard, 124 but argued that such conduct is implicitly addressed by Garmon *s focus upon the NLRB's primary jurisdiction. The dissent stated: If there is a need to protect the primary jurisdiction of the Board to avoid conflicting interpretations of federal law, then cer- tainly there is an even greater need to preempt conflicting state regulation of activity that an employer might be required to pursue Certainly, avoidance of liability for breach of contract is a legitimate business ob- jective. 103 S. Ct. at 3187-88 (Blackmun, J., concurring). ui Id. at 3188. n9 Id. 120 Id. at 3189. ilx Id. at 3190 (Brennan, J., dissenting). 122The NLRB argued: If, during an economic strike, an employer commits what the [NLRB] later determines to be an unfair labor practice and the union continues the strike beyond its natural duration to protest that practice, the strike is converted into an unfair labor practice strike. In such circumstances, the strikers become unfair labor strikers on the date of the conversion. Brief for the National Labor Relations Board as Amicus Curiae at 11, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983) (citing Philip Carey Mfg. Co., Miami Cabinet Div. v. NLRB, 331 F.2d 720, 729 (6th Cir. 1964)). The date of conversion would have been the date beyond which the strike was extended because of the unfair labor practice. 331 F.2d at 728-29. 123The dissent viewed the conduct as arguably required because if the strike had been converted into an unfair labor practice strike, dismissing the replacements would have been the only way to obey federal law requiring reinstatement of strikers. 103 S. Ct. at 3192 (Brennan, J., dissenting). l2*Garmon addressed only arguably protected or arguably prohibited conduct. 359 U.S. at 244-45. 1984] LABOR LAW PREEMPTION 507 by the Board. The need to preempt conflicting state regulation of arguably required activity follows a fortiori from the arguably protected branch of Garmon. 125 The dissent would not have held the misrepresentation claim preempted under the Garmon doctrine. 126 Justice Brennan was unable to see the risk of conflicting regulation of employer conduct that he saw with the breach of contract claim, because federal law could not require the misrepresentations. 127 The opinion recognized that, in order for the Gar- mon doctrine to apply, the misrepresentations would have had to have been arguably protected by section 7 of the NLRA or arguably prohibited by section 8. 128 Without elaboration, Justice Brennan stated that the con- duct was not arguably protected. 129 Although he believed the conduct to be arguably prohibited by section 8, 130 Justice Brennan was unable to avoid the principle announced in Sears, 131 that the state cause of action must be identical to that brought before the NLRB before the state claim can be preempted. 132 Belknap*s dissent reasoned that a claim brought under the NLRA over the arguably prohibited conduct would differ from the misrepresentation claim brought in state court; 133 therefore, the latter could not be preempted under the Sears analysis. Justice Brennan would have, however, held the misrepresentation claim preempted under the Machinists doctrine. 134 The dissenting opinion reasoned that the employer's use of this economic weapon, the right to hire permanent replacement employees during an economic strike, 135 was part of the delicate balance achieved by Congress between the rights of management and labor. The opinion concluded that allowing the state 125 103 S. Ct. at 3193 n.2 (Brennan, J., dissenting). l26 Id. at 3195. 127 Justice Brennan stated: There is no sense in which it can be said that federal law required [the employer] to misrepresent to [employees] the terms on which they were hired. Permitting [the employees] to pursue their misrepresentation claim in state court, therefore, does not present the same potential for directly conflicting regulation of employer activity as permitting [them] to pursue their breach of contract claim. Id. l2i Id. 129 Id. '"Justice Brennan stated that "[i]f this strike was converted into an unfair labor prac- tice strike almost immediately after it started, . . . [Belknap's] offers of permanent employ- ment to replacements may have constituted additional unfair labor practices." Id. at 3195 n.8. m437 U.S. at 180. xl2See supra notes 108-10 and accompanying text. 133 103 S. Ct. at 3195-96 n.8 (Brennan, J., dissenting). ii4 Id. at 3196. See supra notes 51-57 and accompanying text. 135The employer's ability to promise permanent status to replacement employees is an economic weapon against the union because it allows the employer to refuse to reinstate strikers at the conclusion of an economic strike. See supra note 113. 508 INDIANA LAW REVIEW [Vol. 17:491 suit would burden the employer's right to use this weapon, thus upsetting the federal balance. 136 Finally, the dissenting opinion stressed that Belknap did not fall within the exceptions to the preemption doctrines. 137 Justice Brennan stated that the breach of contract claim was not of merely peripheral concern to the NLRA, 138 and impliedly recognized that the same was true of the misrepresentation claim. 139 The dissent was further convinced that the con- duct in Belknap did not ''touch 'interests so deeply rooted in local feel- ing and responsibility that, in the absence of compelling Congressional direction, we could not infer that Congress had deprived the States of the power to act.' " 14 ° Justice Brennan distinguished Belknap from Linn 141 and Farmer, 1 * 2 cases relied upon by the majority, noting that Belknap involved no malicious, outrageous, or violent conduct. 143 III. Belknap: Little Clarification Where Much is Needed In the five years between Sears and Belknap, the body of labor law preemption was severely criticized. 144 Referring to Sears, one commen- tator noted that the case "put additional embroidery onto an already com- plicated legal structure . . . [and] will not encourage coherent develop- ment of the preemption doctrine." 145 Another writer "perceive[d] little interest in logical consistency and less interest in building a coherent and continuing body of law." 146 Belknap does not make these criticisms ob- solete. Rather, the case perpetuates the criticized trends. This section will first view the importance to Belknap's analysis of the existence of third parties to the bargaining agreement. Then the courts refusal to classify the conduct in Belknap as either arguably prohibited by section 8 or not prohibited will be discussed. Finally, the Note will analyze Belknap's effect upon the Machinists and Garmon doctrines and upon the Sears case. 136 103 S. Ct. at 3197 (Brennan, J., dissenting). nl Id. at 3195 n.7. See supra notes 105-07 and accompanying text. See also infra notes 214-24 and accompanying text. ,3, 103 S. Ct. at 3195 n.7 (Brennan, J., dissenting). '"The implication arises from the dissenting opinion stressing that the misrepresenta- tion claim would impinge on the employer's use of an economic weapon, the right to hire permanent replacements. This interference leads to the conclusion that the claim is not of merely peripheral concern to the NLRA. See supra note 135 and accompanying text. 140 103 S. Ct. at 3195 n.7 (Brennan, J., dissenting) (quoting Garmon, 359 U.S. at 243). 141 103 S. Ct. at 3195 n.7 (Brennan, J., dissenting). l * 2 Id. '"Id. See supra note 105-07 and accompanying text. See also infra notes 214-24 and accompanying text. l **See Brody, supra note 46; Recent Developments , supra note 46. l45Brody, supra note 46, at 223. M6Recent Developments, supra note 46, at 300. 1984] LABOR LAW PREEMPTION 509 A. The Significance of Third Parties to the Bargaining Agreement The Belknap controversy was between an employer and non-union employees hired as permanent strike replacements. This is probably the greatest distinction between Belknap and all prior labor preemption cases. Indeed, no previous case addressed the problems of preemption as ap- plied to this fact situation. 147 It is unfortunate that the Court in Belknap did not discuss more fully the significance of this distinction. The NLRB argued that the replacement employees were, in fact, members of the bargaining unit and were, therefore, bound by the settle- ment agreement reached by the employer and the union. 148 The NLRA itself states that a bargaining representative represents all employees in the unit. 149 The United States Supreme Court rejected the argument, rely- ing upon J. I. Case Co. v. NLRB. 150 The Belknap majority stated that the Case opinion "was careful to say that the Board 'has no power to adjudicate the validity or effect of such contracts except as to their ef- fects on matters within its jurisdiction."" 51 The Court in Belknap relied upon this language to assert that Case foreclosed the argument that in- dividual employment contracts must yield to collective agreements, presumably because the individual contracts are outside of the NLRB's jurisdiction. 152 Based on this reasoning, Justice White rejected the NLRB's argument that the replacement employees were bound by the settlement 147 All prior preemption cases have involved disputes between employers and unions or unions and their members. See, e.g., Farmer, 430 U.S. 290 (involving conduct between union and union member); Garmon, 359 U.S. 236 (involving conduct between employer and union). 148 Brief for the National Labor Relations Board as Amicus Curiae at 20, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). 149The Act provides: "Representatives designated or selected for the purposes of col- lective bargaining by the majority of the employees in a unit . . . shall be the exclusive representatives of all the employees in such unit for the purpose of collective bargaining in respect to . . . conditions of employment . ..." 29 U.S.C. § 159(a) (1976). 150 321 U.S. 332 (1944). Case involved individual employment contracts made between the employer and many employees before a majority of the employees voted in favor of union representation. The company refused to bargain with the union with respect to mat- ters covered by the individual contracts. The Court held: Individual contracts, no matter what the circumstances that justify their ex- ecution or what their terms, may not be availed of to defeat or delay the pro- cedures prescribed by the [NLRA] looking to collective bargaining, nor to ex- clude the contracting employee from . . . [the] bargaining unit; nor may they be used to forestall bargaining or to limit or condition the terms of the collective agreement. Id. at 337. 15, 103 S. Ct. at 3181 (quoting 321 U.S. at 340). 152 103 S. Ct. at 3181. The Court did not explicitly state the connection between Case's language and the assertion of the enforceability of the individual employment contracts. In fact, that same language could be interpreted to justify the opposite conclusion. 510 INDIANA LAW REVIEW [Vol. 17:491 agreement between Belknap and the union. 153 Case, however, appears not to have rejected the argument, but to have left the issue open where the individual contract contains terms superior to those in the collective agree- ment. The Case opinion stated: We cannot except individual contracts generally from the operation of the collective ones because some may be more in- dividually advantageous. Individual contracts cannot subtract from collective ones, and whether under some circumstances they may add to them in matters covered by the collective bargain, we leave to be determined by appropriate forums under the laws of con- tracts applicable, and to the Labor Board if they constitute un- fair labor practices. 154 In dicta, the Court in Case expressed skepticism about the wisdom of injecting individually advantageous contracts into the context of the col- lective bargain, stating that "[t]he practice and philosophy of collective bargaining looks with suspicion on such individual advantages." 155 It is unfortunate that, with misplaced reliance upon Case, the Court dismissed the NLRB's argument in two paragraphs. 156 Even accepting the Court's rejection of the argument that the replace- ments were bound by the settlement agreement, uncertainty also exists as to why existing preemption doctrine was applied to the Belknap situa- tion. Existing doctrine was designed to determine the preemption of state causes of action involving two parties—employers and union employees. It was not fashioned to handle the triangle that results when non-union replacement employees are added to the dispute. The Court missed a choice opportunity to enunciate a new doctrine fashioned to accommodate these novel facts. This route, however, would 153 If the replacement employees were not bound by the settlement agreement, it could be for one of two reasons. Either the replacements were not part of the bargaining unit and were, therefore, not bound by the collective agreement, or they were not bound even though they were members of the bargaining unit. Justice White was unclear about whether the quoted passage from Case supports the former or the latter proposition. The latter in- terpretation, that members of the bargaining unit are not bound by the agreement, conflicts with § 9(a) of the NLRA, which states that the union "shall be the exclusive [represen- tative] of all the employees in [the] unit for the purposes of . . . bargaining in respect to . . . conditions of employment . . . ." 29 U.S.C. § 159(a) (1976). Thus, the NLRA requires that all members of the unit be bound by the agreement. The former interpreta- tion, however, does not support the proposition that the replacements are excluded from the bargaining unit. There is no logical link between the language of the NLRB's power to pass upon the validity of an individual employment contract and a conclusion that per- manent replacements are not to be included in the bargaining unit. Thus, Justice White reached his conclusion through either of two interpretations; one contrary to law, the other contrary to reason. ,54 321 U.S. at 339. l$i Id. at 338. ,S6 103 S. Ct. at 3181. 1 984] LABOR LA W PREEMPTION 5 1 1 not have afforded the chance to make some major alterations in existing doctrine which the Court apparently desired to make. B. What Kind of Conduct was Involved? Before Belknap, the threshold issue in preemption analysis was the classification of the conduct involved. 157 This issue is important because under the Garmon doctrine a state cause of action can be preempted only where the conduct is actually or arguably protected by section 7 or pro- hibited by section 8. 158 Conversely, the Machinists doctrine supports preemption of state claims only where the conduct is neither protected by section 7 nor prohibited by section 8. 159 Thus, only after the conduct has been identified as actually or arguably protected or prohibited, or clearly not protected or prohibited, does it become apparent which doc- trine applies. Belknap certainly involved no protected conduct because sec- tion 7 only protects employees ' conduct. 160 Assuming all conduct falls in- to one of the above categories, the employer's representations of perma- nent employment and the dismissal of replacement employees must be more narrowly characterized as actually, arguably, or clearly not prohibited by section 8. Justice White's majority opinion failed to stress that Belknap involved two separate instances of conduct, thus missing the first point of a solid preemption analysis. The misrepresentation claim involved conduct which occurred at the time the replacements were hired, while the breach of contract claim was based upon discharging the replacements. 161 These two instances of conduct do not necessarily lend themselves to analysis under a single heading. This point was addressed by the dissent, 162 the NLRB, 163 and Belknap. 164 It is unfortunate that the Court did not separately stress the classifications of the representations of permanent employment and of the firing of the replacements because it makes Belknap's logic dif- ficult to follow. The confusion over the proper classification of each ac- tion is further highlighted by the fact that even Belknap and the NLRB, 157 See, e.g., Sears, Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S. 180 (1978). liiSee supra text accompanying note 46. 159See supra text accompanying note 50. 160At issue in Belknap was an employer's conduct, consisting of promises of perma- nent employment to replacement employees and the firing of those employees. 103 S. Ct. at 3174-76. Justice Brennan's dissenting opinion viewed the conduct involved in the breach of contract claim as being arguably required, which he argued was implicit within the arguably protected prong of the Garmon rule. Id. at 3194 (Brennan, J., dissenting). ]6i See supra note 87. 162 103 S. Ct. at 3190 (Brennan, J., dissenting). '"Brief for the National Labor Relations Board as Amicus Curiae, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). 1 "Brief for Petitioner at 16, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). 512 INDIANA LAW REVIEW [Vol. 17:491 both arguing in favor of preemption, were unable to agree on the issue. 165 Separate analysis concerning the classification of each instance of con- duct is material to the remainder of the Court's analysis, no matter how the conduct is actually classified. 166 The Court must have viewed both causes of action as preempted regardless of how the conduct was classified, given that both the misrepresentation and breach of contract claims were examined under Garmon and Machinists. If this was the Court's rationale, it is unfortunate because confusion is sure to result over the proper classifications in future cases. The refusal to delineate the classification of each instance of conduct, however, gave the Court an opportunity to examine several facets of both the Garmon and Machinists doctrines, which were unnecessary to the decision. This enabled the Court to modify two mutually exclusive preemption analyses within a single case. 167 165Belknap asserted that the conduct underlying the misrepresentation claim was arguably prohibited. Brief for Petitioner at 16, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). The NLRB, however, argued that only the contract claim could come under the arguably pro- hibited prong. Brief for the National Labor Relations Board as Amicus Curiae at 19, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). Justice Brennan viewed the firing of the replacements as "arguably required," thus to be analyzed under the arguably protected prong. 103 S. Ct. at 3192-93 (Brennan, J., dissenting). '"As a threshold matter, each instance of conduct must be analyzed separately for classification purposes. If both can be classified under the same heading, arguably pro- hibited for example, then both may be analyzed together under a single preemption doc- trine. Because Garmon and Machinists are mutually exclusive doctrines, there would be no need to discuss both cases in such a situation. If, however, each instance of conduct cannot be classified under the same heading then one must be examined under Garmon and the other under Machinists. In this situation, it would be unnecessary to analyze both kinds of conduct under both doctrines. 167 It appears that Justice White's refusal to separately examine preemption of the misrepresentation claim and of the breach of contract claim was an easy way to consider the Garmon and Machinists doctrines in the same opinion. Once a certain kind of conduct is labeled as either arguably protected or prohibited or clearly not protected or prohibited that conduct is controlled by only one of two preemption doctrines. In Belknap, if the conduct underlying either the breach of contract or the misrepresentation claim was arguably prohibited by § 8, the claim can be analyzed only under Garmon. Conversely, if either the representations of permanent employment or the firing of the replacement employees was not prohibited by § 8, Machinists provides the only applicable doctrine. The majority in Belknap could have reached the same result of no preemption without any discussion of Garmon and it exceptions. See supra notes 113-19 and accompanying text. Indeed, Belknap could have been a straight-forward decision of preemption under the Machinists doctrine. Not even Belknap's dissent was able to find any arguably prohibited conduct. Justice Brennan was able to apply Garmon only by labeling the dismissal of the replacements as "arguably required." 103 S. Ct. at 3192-93 (Brennan, J., dissenting). Alternatively, if each kind of conduct fell into a separate classification, then each should have been analyzed separately under a single preemption doctrine. This was the approach taken by Belknap's dissent, where the breach of contract claim was viewed under the Gar- mon doctrine and the misrepresentation claim under Machinists. Id. at 3192-96. 1 984] LABOR LA W PREEMPTION 5 1 3 C. The Machinists Doctrine: Are Economic Weapons Safe from State Interference? The use of economic weapons is a fact of life in labor disputes. The most potent of the weapons held by employees is the right to strike. Under the NLRA, "[n]othing . . . shall be construed so as either to interfere with or impede or diminish in any way the right to strike . . . ," 168 For nearly fifty years, the United States Supreme Court has recognized a po- tent counter-weapon in the hands of an employer, the right to continue operating in the face of a strike by hiring replacements for striking employees. 169 "It does not follow [from the employees' right to strike] that an employer, guilty of no act denounced by [the NLRA], has lost the right to protect and continue his business by supplying places left vacant by strikers. ,,17 ° In order to defeat the strikers' right to return to work at the conclusion of an economic strike, the employer's offer to replacements must be for permanent employment. 171 The doctrine enunciated in International Association of Machinists v. Wisconsin Employment Relations Commission 112 was predicated upon the recognition that certain state causes of action may be preempted by federal law even where they do not concern conduct arguably or actually protected by section 7 or prohibited by section 8 of the NLRA. 173 The thrust of the doctrine is that Congress has achieved a delicate balance, between rights available to employees and rights available to management, which is not to be disturbed by state law. 174 Clearly, the United States Supreme Court in Belknap did not allow the Machinists rule to preempt either state cause of action. 175 What is less clear is precisely why the Court so concluded. There are several possible explanations of Belknap's rationale. One explanation is that the conduct, either the representations of per- manent status or the dismissal of the replacements, was arguably pro- hibited by section 8 of the NLRA and, therefore, controlled by Garmon. 116 It is unlikely, however, that this was the Court's primary focus. Although this classification of the employer's actions as arguably prohibited by sec- tion 8 would have been an easy way to reach the result of no preemption under the Machinists doctrine, this option was not viable. By so classifying, 168 29 U.S.C. § 163 (1976). ,69NLRB v. Mackey Radio & Tel. Co., 304 U.S. 333 (1938). 170 Id. at 345. xlx Id. at 346. I72427 U.S. 132 (1976). See supra notes 50-57 and accompanying text. See supra notes 54-57 and accompanying text. ,75 103 S. Ct. at 3177-81. n6See supra notes 41-49 and accompanying text. 173 I 74 514 INDIANA LAW REVIEW [Vol. 17:491 the majority would have been foreclosed from its extended discussion of Machinists because any case involving arguably prohibited conduct would be controlled solely by Garmon. xl1 Further, such a classification may have been impossible. Not even the dissenting opinion was willing to label either instance of conduct arguably prohibited. 178 Had the Court desired to do so, it could have factually distinguished Belknap from Machinists because Machinists involved a specific state labor statute while Belknap involved state tort and contract law. 179 Machinists' result was reached only by the concurring votes of Justice Powell and Chief Justice Burger, who joined with the understanding that states were not to be precluded "from enforcing, in the context of a labor dispute, 'neutral' state statutes or rules of decison . . . . ,,18 ° Machinists' concur- ring opinion defined neutral state laws as those "that are not directed toward altering the bargaining positions of employers or unions but which may have an incidental effect on relative bargaining strength." 181 Machinists' concurring opinion went on to provide almost perfect language for distinguishing Belknap by stating that "[e]xcept where Congress has specifically provided otherwise, the states generally should remain free to enforce, for example, their law of torts or of contracts, and other laws reflecting neutral public policy." 182 The Belknap majority, however, did not appear to base its decision upon this distinction. 183 A more likely explanation of Belknap's rationale in holding that the state claims were not preempted is that at least some of the Justices of the Belknap majority saw this case as an opportunity to narrow the im- portance of the Machinists doctrine. 184 Justice White, author of the Court's Belknap opinion, was the only Justice in the majority of both this case and Machinists. The Belknap opinion, however, seems to return to the philosophy that congressional silence indicates an intent to leave the 111 See supra notes 157-67 and accompanying text. 178 Justice Brennan, in analyzing the contract claim under Garmon, was forced to argue that the breaching conduct was "arguably required," a classification implicit in Garmon's arguably protected prong. 103 S. Ct. at 3192-93 (Brennan, J., dissenting). Belknap contended that the strike had arguably been converted into an unfair labor practice strike and that any representations of permanent status were thus arguably prohibited. Brief for Petitioner at 16-17, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). The majority, however, did not squarely address the argument. Instead, it proceeded into a discussion of the peripheral concern and local interest exceptions to the Garmon rule. 103 S. Ct. at 3182. n9See supra notes 52, 87 and accompanying text. ,80427 U.S. at 156. '"Id. ,S2 Id. 183The Court's opinion did not discuss this language as a distinguishing factor. Fur- ther, Justice Powell joined the dissent in Belknap. This leads to the inference that he did not believe this to be the basis of the majority opinion. 184Two members of the Belknap majority had dissented in Machinists and seem to have viewed that case as separate and apart from the main body of preemption law. Recent Developments, supra note 46, at 285-87. 1 984] LABOR LA W PREEMPTION 5 1 5 activity under the control of state law.' 85 This was the rationale behind the Briggs-Stratton case, 186 which Machinists explicitly overruled. 187 Belknap was not the first time that the continuing validity of Machinists was called into question. One commentator perceived a similar attitude following the Court's opinion in the Sears case, 188 but believed that the rule had been reaffirmed in a subsequent case. 189 Apparently the Court desired to significantly narrow Machinists. The Court in Belknap focused upon what it believed to be the congressional intent that the state claims should not be preempted. 190 Congressional in- tent was a key factor under the Machinists doctrine 191 and was to be found by inquiring "whether 'the exercise of plenary state authority to curtail or entirely prohibit self-help would frustrate effective implementation of the [NLRA's] processes.' " 192 Thus, under the Machinists rule, it would 185 In Belknap, the Court stated: It is one thing to hold that the Federal law intended to leave the employer and the union free to use their economic weapons against one another, but is quite another to hold that either the employer or the union is also free to injure innocent third parties without regard to the normal rules of law governing those relationships. We cannot agree . . . that Congress intended such a lawless regime. 103 S. Ct. at 3178. The tone of this language is arguably analogous to that in Briggs- Stratton, where the Court noted that "[t]his conduct is governable by the State or it is entirely ungoverned." 336 U.S. 245, 254. In both cases, the Court was unwilling to infer that Congress could possibly have intended that the conduct remain free from state interference. ii6See supra notes 17-23 and accompanying text. 187 Justices Stevens and Rehnquist would not have overruled Briggs-Stratton and thus did not participate in the birth of the Machinists doctrine. Consistently, they joined the Belknap majority. The third member of the Machinists dissent, Justice Stewart, had retired from the Court prior to Belknap. Justice O'Connor, his replacement, joined Belknap's majority. '"'Professor Cox observed that "[Justice Stevens, author of the Sears opinion,] im- pliedly rejected Machinists, referring to the two aspects of the Garmon rule as 'the general guidelines for deciphering the unexpressed intent of Congress regarding the permissible scope of State regulation of activity touching upon labor-management relations.' " Recent Developments, supra note 46, at 285 (quoting 436 U.S. at 187 (emphasis added)). Pro- fessor Cox continued: "There is further reason to think . . . Sears . . . sought to undermine . . . the Machinists decision [in that Sears] spontaneously reject [ed] any suggestion that a state may never grant remedies for trespassory picketing because the omission of any federal prohibition implies that the conduct is to be left free of regulation." Recent Developments, supra note 46, at 286. ,89New York Tel. Co. v. New York State Dep't of Labor, 440 U.S. 519 (1979). The case involved a constitutional attack upon a state statute which mandated the payment of unemployment benefits to strikers at their employers' expense. The Court, in a 6 to 3 deci- sion with three plurality opinions, "seem[ed] to accept the premise that a state law may be unconstitutional even though the Garmon rule [does] not condemn it." Recent Developments, supra note 46, at 292. 190 103 S. Ct. at 3178. i9i See supra text accompanying note 54. "2427 U.S. at 147-48 (quoting Railroad Trainment v. Jacksonville Terminal Co., 394 U.S. 369, 380 (1969)). 516 INDIANA LAW REVIEW [Vol. 17:491 seem that a state cause of action which burdens the use of a federally sanctioned economic weapon would imply congressional intent that the state suit be preempted by the NLRA. Belknap made such an argument. 193 The Court in Belknap, however, refused to focus upon whether a burden existed and, if so, its effect upon the NLRA's processes. Justice White stated that "[arguments that entertaining suits by innocent third parties for breach of contract or for misrepresentation will 'burden' the employer's right to hire permanent replacements are no more than arguments that 'this is war,' that 'anything goes' .... We cannot agree . . . that Congress intended such a lawless regime." 194 Accordingly, future analysis under the Machinists doctrine may be nothing more than deciding whether Congress intended preemption. If so, Machinists will be of little use in protecting the availability of economic weapons against state interference. The Court in Belknap refused to recognize any burden upon the employer's right to hire permanent replacements so as to preempt the state cause of action. Although the Court did not remove the employer's right to use this weapon, this opinion will likely increase the cost of its use. A primary effect of Belknap is that there is now only one way for an employer faced with an economic strike to exercise this right and to con- currently remain free from liability should it dismiss the replacements. 195 The employer must now make its offer of permanent employment to replacements conditional upon the NLRB's failure to order the strikers reinstated and upon the absence of a strike settlement agreement to the same effect. 196 Four members of the Court 197 and the NLRB 198 argued '"Belknap argued: If an employer could be subjected to substantial financial liability for agreeing to recall the strikers as part of a strike settlement agreement, as a practical mat- ter, the employer would have the alternative of either being constrained from hiring permanent replacements altogether, in which case the theoretical right becomes illusory; or the employer could hire permanent replacements and thereafter be constrained to refuse to agree to recall the striking employees even though such agreement might settle a labor strike. The latter situation would inevitably pro- long economic strikes and frustrate the collective bargaining process. It is precisely this type of state interference with conduct designed [by Con- gress] to be left unregulated which prompted the preemption rationale enunciated ... in Machinists. Brief for Petitioner at 19, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). ,94 103 S. Ct. at 3178. 195An employer will be forced to discharge replacements in an unfair labor practice strike, because federal law requires the reinstatement of unfair labor practice strikers. See supra note 95. I96 103 S. Ct. at 3179. ,97 103 S. Ct. at 3186 (Blackmun, J., concurring), 3190 (Brennan, J., dissenting). The dissenting opinion was joined by Justices Marshall and Powell. "'Brief for the National Labor Relations Board as Amicus Curiae at 17, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). 1984] LABOR LAW PREEMPTION 517 that a promise of conditionally ' 'permanent" employment would lack the "legitimate and substantial business justification" 199 which is required to enable the employer to retain the replacements in preference to the return- ing strikers. 200 This, they asserted, could be an unfair labor practice. 201 The employer's only alternative is to promise unconditional permanent employment, as in Belknap, and risk being sued by discharged replacements when strikers are reinstated. After Belknap, an employer will be reluctant to settle a labor dispute by agreeing to reinstate strikers. There will be a propensity to litigate un- fair labor practice charges to final adjudication in order to either establish the employer's right to retain the replacements, or to receive a Board order to dismiss them. The NLRB noted that in excess of 82 percent of unfair labor practice complaints are settled by the parties. 202 Given that the NLRB issues nearly 8,000 complaints annually, 203 any significant in- crease in the propensity to litigate will result in added delay and expense to those involved in labor disputes. These additional costs will further dampen parties' willingness to assert their rights under the NLRA. In sum, the Belknap opinion has narrowed the availability of pre- emption in cases involving activity neither protected by section 7 of the NLRA nor prohibited by section 8. The Court did not stop here, but went on to discuss preemption of state claims involving conduct arguably protected by section 7 or prohibited by section 8. This strand of preemp- tion is controlled by the analysis of San Diego Building Trades Council v. Garmon. 204 D. Belknap's Garmon Analysis— What About Sears? The Belknap majority recognized that "state regulations and causes of action are presumptively preempted if they concern conduct that is actually or arguably prohibited ... by the [NLRA]." 205 This is the so- called Garmon doctrine. 206 After finding that the Machinists doctrine did not require preemption, the United States Supreme Court in Belknap went on to hold that the replacements' state causes of action were not pre- empted under Garmon. 201 As in its Machinists analysis, the Court in '"NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 379 (1967). 200See supra note 113. 20 'Justice Blackmun suggested charges of threat of reprisal for engaging in concerted activity and unjustified refusal to reinstate strikers at the conclusion of an economic strike. 103 S. Ct. at 3186 (Blackmun, J., concurring). 202 Brief for the National Labor Relations Board as Amicus Curiae at 13 n.6, Belknap, Inc. v. Hale, 103 S. Ct. 3172 (1983). 203 Id. 204359 U.S. 236 (1959). 205 103 S. Ct. at 3177. 206See supra notes 35-46 and accompanying text. 207 103 S. Ct. at 3183. 518 INDIANA LAW REVIEW [Vol. 17:491 Belknap mentioned several justifications for the result but relied on none specifically. An easy but unlikely explanation of the result is that neither the employer's representations of permanent employment to replacements nor their firing was conduct arguably prohibited by section 8 of the NLRA. Had the activity been classified as not arguably prohibited, the Garmon doctrine would not have applied. 208 However, this interpretation would have foreclosed the opportunity to examine the exceptions to the Garmon rule, 209 which the Belknap opinion discussed at length. 210 The more probable interpretation of Belknap is that the Court found that the case fell within one of Garmon 's exceptions. The Court, in Gar- mon, had recognized that the states' power to regulate is not preemp- ted where "the activity regulated was a merely peripheral concern of the . . . Act . . . [or] where the regulated conduct 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 States of the power to act." 211 These exceptions are possible because they do not interfere with Garmon 's underlying rationale of protecting the NLRB's primary jurisdiction. 212 Belknap's majority opinion focused upon two cases which had ex- plained the exceptions. Linn v. United Plant Guard Workers213 involved a state libel suit which charged the union with making false and defamatory statements. The union argued for preemption, but the United States Supreme Court allowed the state claim for malicious libel to stand because the cause of action was of only peripheral concern to the NLRA and would not interfere with the NLRB's adjudication of the underlying labor controversy. 214 The Court also recognized an overriding state interest in redressing citizens' injuries from malicious libel. 215 Farmer v. United Brotherhood of Carpenters 216 involved a union member's suit against his union for intentional infliction of emotional distress resulting in bodily harm and for discrimination with regard to job referrals. The union argued that preemption was required because the employment discrimination was arguably an unfair labor practice under the NLRA. The state cause of action was, however, allowed to stand. 217 20tSee supra note 173. 209See supra text accompanying note 46. 2,0 103 S. Ct. at 3182-84. 2 "359 U.S. at 243-44. 2l2These exceptions also apply to preemption under the Machinists doctrine. 427 U.S. 132, 136-37. However, the Court did not rely upon these exceptions in analyzing the Machinists side of the Belknap case. 2I3 383 U.S. 53 (1966). 21 *Id. at 61. 2,i Id. at 62. 2I6430 U.S. 290 (1977). 2X1 Id. at 302. 1 984] LABOR LA W PREEMPTION 5 1 9 The Court in Belknap read Linn and Farmer more broadly than they had been read in the past, 218 by interpreting these cases as exempting from preemption less egregious conduct than malicious or outrageous activity. 219 Farmer, a unanimous opinion, had limited Linn to situations involving defamatory statements published with knowledge of or reckless disregard for falsity 220 and analogized intentional infliction of emotional distress to prior exception cases involving violence and defamation. 221 The Belknap opinion greatly expanded Farmer in a manner not justified by, and arguably contrary to, the Court's opinion in Farmer. Justice White asserted that the cause of action in Farmer was not pre- empted "even though a major part of the cause of action consisted of conduct that was arguably an unfair labor practice." 222 However, the Farmer opinion stated that "it is essential that the state tort be either unrelated to employment discrimination or a function of the particularly abusive manner in which the discrimination is accomplished or threatened rather than a function of the actual or threatened discrimination itself." 223 The Farmer opinion further limited itself by requiring a showing of outrageous conduct, noting that the state suit would be intolerable if it could be made on proof of common clashes in labor disputes. 224 Belknap relied in part upon Linn and Farmer to fit the replacements' misrepresen- tation and breach of contract claims into the local interest and peripheral concern exceptions to the Garmon rule. 225 This indicates a substantial broadening of the exceptions to cover not only violence, malicious defama- tion and outrageous conduct, but also ordinary misrepresentation and breach of contract which are more closely intertwined with the underly- ing labor dispute. 226 The Court cited Sears, Roebuck & Co. v. San Diego County District Council of Carpenters 227 as additional support for the holding that Belknap fell within the exceptions to the Garmon doctrine. Prior to Belknap, the 21 *See, e.g., Sears, 436 U.S. 180, 195-97. 219 103 S. Ct. at 3182-84. 220430 U.S. at 299. 22l Id. at 302. See, e.g., Linn, 383 U.S. 53 (involving libel); UAW v. Russell, 356 U.S. 364 (1958) (involving violence). 222 103 S. Ct. at 3183. 223430 U.S. at 305. 22 *Id. at 305-06. In Farmer, the Court remanded the case due to a fear that the jury may have relied upon the facts showing employment discrimination, the unfair labor prac- tice, in awarding damages for the outrageous tortious conduct. Id. at 306. 225 103 S. Ct. at 3182-84. 226 Justice Brennan's dissent would have read Linn and Farmer more strictly, thus distinguishing Belknap. 103 S. Ct. at 3195 n.7 (Brennan, J., dissenting). The conduct in- volved in Belknap, the hiring and firing of employees from specific jobs was at the very core of the dispute, as contrasted with libelous statements and violent conduct which arises from, rather than causes, the underlying dispute. 227436 U.S. 180 (1978). 520 INDIANA LAW REVIEW [Vol. 17:491 impact of Sears upon Garmon was unclear. The Court in Sears endorsed the Garmon doctrine in form, but appeared to severely damage the doc- trine's philosophical structure. 228 Read broadly, Sears could have shaken the foundation of preemption analysis developed in Garmon. Belknap, however, narrowed Sears so that it can be read only as creating another exception to the Garmon doctrine. 229 In Belknap, the Court's only discus- sion of Sears was in the context of the local interest and peripheral con- cern exceptions, on the level of cases such as Farmer and Linn. 230 The Court appeared to cite to Justice Stevens' language in Sears as an addi- tional exception. "[A] critical inquiry [in applying the Garmon rule] ... is whether the controversy presented to the state court is identical with that which could be presented to the Board." 231 Where the controver- sies differ, Garmon no longer borders on being irrelevant. 232 Rather, Gar- mon's normal operation is not applicable such that the state cause of action will be allowed to stand. Belknap apparently meant to limit Sears to its facts out of fear that the latter's sweeping language could crumble the Garmon cornerstone of labor law preemption. There exists, however, an inconsistency regarding the term "contro- versy," as used in the context of the Sears exception. Sears' use of the term "controversy" was narrow in that the word was defined in terms of elements of the state and federal causes of action. 233 In Belknap, the Court found that the state and federal controversies differed because the state causes of action would focus upon the rights of the replacement employees while an NLRB proceeding would be centered upon strikers' rights. 234 While the Court appeared to follow Sears' interpretation of 12iSee supra notes 75-76 and accompanying text. 229See supra text accompanying notes 108-10. 230 103 S. Ct. at 3177, 3182-83. 2il Id. at 3183. 232See supra notes 71-76 and accompanying text. 233 In Sears, the controversy that could have been presented to the NLRB involved the nature of the picketing while the state controversy concerned the picketing' s location. The Court in Sears stated: [T]he federal issue would have been whether the picketing had a recognitional or work reassignment objective; [the] decision of that issue would have [been] . . . completely unrelated to the simple question whether a trespass had occurred. Conversely, in the state action, Sears only challenged the location of the picketing; whether the picketing had an objective proscribed by federal law was irrelevant to the state claim. 436 U.S. at 198 (footnote omitted). 234 Justice White stated: It is true that whether the strike was an unfair labor practice strike and whether the offer to replacements was the kind of offer forbidden during such a dispute were matters for the Board. The focus of these determinations, however, would be on whether the rights of strikers were being infringed. Neither controversy would have anything in common with the question whether Belknap made 1984] LABOR LAW PREEMPTION 521 "controversy," it allowed the replacements to recover damages for breach of an employment contract, but would not permit the state to grant specific performance of such a contract or injunctive relief if such a remedy would require the dismissal of a striker entitled to reinstatement under federal law. 235 This is inconsistent because, in such a situation, nothing has changed the controversy. Rather, only the remedy differs. 236 If a broader and more general interpretation of "controversy" is used, it is arguable that the state and federal controversies in Belknap would be found to be identical under the Sears exception. Strikers claimed the right to return to their former jobs under federal law, while replacements claimed the right to occupy those same jobs under state law. The Court apparently concluded that different parties created different controversies. However, both controversies involved precisely the same conduct and the same jobs. The need for additional judicial gloss upon the Sears excep- tion to Garmon is clear. Without proper refinement, this new exception could completely engulf the rule. Superficially, the Belknap majority reaffirmed the vitality of the Gar- mon doctrine. Realistically, however, the doctrine is now better defined by its exceptions. Belknap has widened the scope of the local interest and peripheral concern exceptions to include ordinary tort or breach of con- tract suits in state court. Belknap's interpretation of Sears further nar- rowed the Garmon doctrine by expanding Sears' "different controversies" exception to include different remedies. After Belknap, as long as the state remedy is different from the NLRB remedy, a state cause of action will not be preempted under Garmon. misrepresentations to replacements that were actionable under state law. The Board would be concerned with the impact on strikers not with whether the employer deceived replacements. 103 S. Ct. at 3183. 235 Id. at 3183 n.13. See supra note 95. 236 It is not an answer to say that the state award of damages is of no threat to NLRB jurisdiction because that agency is powerless to award damages. Garmon stated that it was not "significant that [the state] asserted its power to give damages rather than to enjoin what the Board may restrain though it could not compensate .... Such regulation can be as effectively asserted through an award of damages as through some form of preventive relief." 359 U.S. at 246-47. Also, this interpretation of "controversy" leads to the conclusion that Garmon now can only operate to preempt a state cause of action brought under a state labor relations statute containing language similar to that of the NLRA. A state suit brought under any other laws would not be identical to a controversy brought under the NLRA. This result is contradic- tory to language in Garmon, where the Court stated that it did not matter "whether the states have acted through laws of broad general application rather than laws specifically directed towards the governance of industrial relations. Regardless of the mode adopted, to allow the states to control conduct which is the subject of national regulations would create a potential frustration of national purposes." Id. at 244. 522 INDIANA LAW REVIEW [Vol. 17:491 IV. Conclusion Belknap does little to clarify ambiguities that have arisen in recent labor law preemption cases. Instead, Belknap's "deeply rooted, different remedy, Congress could not have intended' ' test further clouds preemp- tion law. One clear implication is that states now control a larger portion of the body of labor law than they did before Belknap. It is also clear that the Court desired to use Belknap to address a broad range of issues in the area. The Machinists doctrine is now narrower, as is the Garmon rule through the expansion of its exceptions. In its haste to limit the area of exclusive federal domain in favor of more state control over labor law, the court has raised new uncertainties regarding the practical value of an employer's right to exercise his most powerful economic weapon, the right to hire permanent replacements, which must make labor's weapons less secure by analogy. Although the result in Belknap may have been desirable, because the state remedy was probably the only one available to the replacements, it is unfortunate that the Court chose such a complex route to that end. If nothing else, the case shows further need for a coherent preemption doctrine. James P. Cavanaugh III