Caterpillar Inc. v. Williams

PETITIONER: Caterpillar Inc.
LOCATION: Highway 80, Solano County, California

DOCKET NO.: 86-526
DECIDED BY: Rehnquist Court (1986-1987)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 482 US 386 (1987)
ARGUED: Apr 21, 1987
DECIDED: Jun 09, 1987

Fritz Wollett - on behalf of the Respondent
Gerald D. Skoning - on behalf of the Petitioners

Facts of the case


Media for Caterpillar Inc. v. Williams

Audio Transcription for Oral Argument - April 21, 1987 in Caterpillar Inc. v. Williams

William H. Rehnquist:

We will hear arguments first this morning in No. 86-526, Caterpillar and others against Cecil Williams.

Mr. Skoning, you may proceed whenever you are ready.

Gerald D. Skoning:

Mr. Chief Justice, and may it please the Court:

This case presents two interrelated issues.

First, whether the Ninth Circuit's decision that a state action can be removed to Federal court under the complete preemption doctrine only when a superseding Federal remedy exists can be squared with this Court's decisions in Franchise Tax Board, Avco, and the recent decision in Metropolitan Life v. Taylor.

And second, whether a state contract claims, based upon allegedly independent employment contracts of individuals covered by a union contract, were within the scope of Section 301 of the Labor-Management Relations Act, and therefore properly removed to Federal court, and dismissed for failure to exhaust contractual grievance procedures.

The facts in this case are really quite simple and commonplace in the industrial setting.

Respondents are former employees of Caterpillar who were laid off from their bargaining unit jobs pursuant with the company's contract with Local 284 of the International Association of Machinists when the company shut down its plant in San Leandro, California.

At the time of their layoff, all respondents were union members whose employment was governed by the collective bargaining agreement entered into with their union.

In fact, although respondents had worked at jobs outside of the bargaining unit for varying periods of time, all except two had returned to the bargaining unit prior to May of 1983, when Caterpillar and the respondents' union negotiated their most recent master labor agreement.

And all respondents were working at bargaining unit jobs, covered by their union contract, when the company and the IAM negotiated the package of letters of agreement culminating with the agreement of June 27, 1984, providing each of the respondents expensive additional benefits because of the plant shutdown--


Harry A. Blackmun:

Counsel, how long were the respondents management employees?

Gerald D. Skoning:

--For varying periods of time that are not fully established in the record, but for varying times, Justice Blackmun.

Harry A. Blackmun:

When in respect to the plant closing were they downgraded?

Gerald D. Skoning:

The downgrades occurred as the plant began to shut down, and the respondents were offered these positions back in the bargaining unit to protect their employment.

Harry A. Blackmun:

So that Caterpillar knew that the plant would close at the time they were downgraded?

Gerald D. Skoning:

I'm not sure that's clear from the record, Justice Blackmun, but leave it at this.

The times were not good as far as this plant was concerned, and there was an effort to cut back on the labor force which resulted in the reduction in jobs in the plant.

Whether or not they knew at a given time that the plant would ultimately be shut down I don't think is clear from the record, and I really would respectfully submit that it isn't entirely relevant to the resolution of the issues in this case.

Respondents' 1983 contract covered the usual wages, hours and working conditions, and also expressly covered employee rights in the event of a shut down of the plant.

It covered such matters as exercise of seniority in a downgrade; severance pay; continuation of medical and dental benefit coverage; and even transfer rights to other Caterpillar plants.

These supplemental letters of agreement were the product of legally required effects bargaining required under the National Labor Relations Act between the company and the union.

Now respondents sued Caterpillar and several management employees in state court in December, 1984, claiming that their layoff breached state law contracts, independent of their collective bargaining agreement.

More specifically in their complaint, respondents contended that while they were working in salaried jobs outside their union contract, petitioners promised that they would have lasting permanent employment, and that they would be provided other jobs if the company shut down the plant.

Byron R. White:

What was the allegation about the promise?

Was it that they were promised permanent employment as salaried employees?

Gerald D. Skoning:

Yes, Your Honor.

Respondents further alleged in their complaint that similar promises were made to them after they returned to their bargaining unit jobs prior to the shutdown of the plant.

The district court ruled that respondents' complaint was properly removed to Federal court, since the complaint stated Federal claims arising under Section 301.