United States District Court, S.D. New York
May 28, 2004.
TONIA CAMPBELL, Plaintiff, -against- KANE, KESSLER, P.C.; Versuslaw M. TRAUB; THE RIHGA ROYAL HOTEL/RIHGA INTERNATIONAL; JOHN QUIRKE; LISA LICHTENSTEIN; MARRIOTT INT'L, INC.; DONNA CABIBI; THE HOTEL AND RESTAURANT UNION, LOCAL 6, HOTEL, RESTAURANT, AND CLUB EMPLOYEES AND BARTENDERS UNION, AFL-CIO; HERRICK FEINSTEIN, LLP; JOSEPH FARELLI, Defendants
The opinion of the court was delivered by: RICHARD CASEY, District Judge
MEMORANDUM OPINION AND ORDER
Tonia Campbell originally filed this action in state Supreme Court,
New York County, January 22, 2002 against the above-named defendants
("Defendants"). The case was removed to this Court on March 4, 2002.
Plaintiff now moves to remand the case to state court; Defendants oppose
the motion and move to dismiss the complaint in its entirety. For the
reasons set forth below, the motion to remand is DENIED and the motions
to dismiss are GRANTED.
This dispute arises out of Plaintiff s employment with The Rihga Hotel
and her union's representation of her with respect to a grievance against
the hotel. In relation to this dispute, Plaintiff has brought suit against the following parties: Kane Kessler,
P.C., the law firm that serves as labor counsel to the Hotel Association
of New York City, Inc.; Lois M. Traub, an associate of Kane Kessler;
Righa International ("Rihga"), doing business as The Rihga Hotel ("the
Hotel"), the hotel at which Plaintiff was employed; John Quirke, Rihga's
Comptroller until May 2002; Lisa Lichtenstein, Rihga's Assistant Director
of Human Resources until February 2001; Marriott International
("Marriott"), a corporation that has owned and operated The Rihga Royal
Hotel since about February 2001; Donna Cabibi, Marriott's Director of
Human Resources at Hotel since February 2001; the Hotel and Restaurant
Union, Local 6, Hotel Employees & Restaurant Employees International
Union, AFL-CIO ("Local 6"), a labor union representing employees
performing various trades in the New York City hotel and restaurant
industry; Herrick Feinstein, LLP, a law firm retained as counsel to
represent Local 6 and the New York Hotel & Motel Trades Counsel,
AFL-CIO, in connection with the grievance challenging Plaintiff's
discharge from the Hotel; and Joseph Farelli, an attorney associated with
Herrick, Feinstein, LLP, who was assigned to handle Plaintiff's grievance
and arbitration against the Hotel.
Plaintiff was employed by the Rihga Hotel until her termination on
November 15, 2000. During her employment at the Hotel, Plaintiff was a
member of Local 6, an affiliated local of the New York Hotel & Motel
Trades Council, AFL-CIO (collectively, "the Union"). The terms and
conditions of her employment were governed by a collective bargaining
agreement (the "Industry-Wide Agreement" or "IWA") between the Union and
the Hotel Association of New York City, Inc. ("the Association"), a
multi-employer trade association representing approximately 175 hotels in
the New York City area. (Traub Aff ¶ 20).
Article 26 of the IWA contains a grievance and arbitration clause,
which provides, in part:
All complaints, disputes or grievances arising
between the parties hereto involving questions or
interpretation or application of any clause of
this Agreement, or any acts, conduct or relations
between the parties, directly or indirectly, which
shall not have been adjusted by and between the
parties involved shall be referred to a permanent
umpire known as the Impartial Chairman, and his
decision shall be final and binding upon the
(Traub Aff, Ex. C.)
Article 27 of the IWA provides that the employer may discharge any
employee, but that the Union has the right to question whether such
discharge was for just cause. (Id.) If the dispute is not
adjusted pursuant to the grievance procedure, it shall be submitted for
adjudication to the Impartial Chairman pursuant to Article 26.
Upon Plaintiff's termination on November 15, 2000, the Union filed a
grievance on Plaintiff's behalf, claiming that her discharge was not for
just cause. (Traub Aff. ¶¶ 23-24.) In February 2001, several months
after Plaintiff was discharged but before the date of her arbitration,
Rihga sold its interest in the Hotel to Marriott. (Id. at ¶
An arbitration was scheduled before the Office of the Impartial
Chairman for May 1, 2001. (Id. at ¶ 26.) On that date,
Traub and Cabibi appeared on behalf of Rihga and Marriott, respectively,
and Farelli appeared on behalf of Plaintiff. (Id. at ¶
27-28.) Prior to the commencement of arbitration proceedings, Traub and
Farelli engaged in settlement negotiations. (Id. at ¶ 30.)
Pursuant to these discussions, the parties entered into a Voluntary
Settlement Agreement ("Settlement Agreement"), which provided, inter
alia, that Rihga would pay Plaintiff the sum of $32,500, less usual
statutory deductions and that the Hotel would provide Plaintiff with a
neutral letter of reference upon request by a potential employer.
(Id., Ex. D.) The Agreement further contained an acknowledgment by Plaintiff that the
Union had represented her fully and fairly throughout the grievance
procedure, arbitration and negotiation of the Settlement Agreement.
(Id.) Plaintiff claims that the Settlement Agreement contains
an illegal waiver of her right to unemployment and workers compensation
benefits. (See Compl. ¶¶ 14, 36.)
On October 25, 2001, Plaintiff traveled to Philadelphia to interview
for a chef de partie position at the Ritz-Carlton. (Id. ¶
21.) After four hours with the sous chef discussing the position,
Plaintiff was confident of being hired for the position. (Id.
¶ 22.) While Plaintiff was completing an application for employment,
she became aware that the Ritz-Carlton was owned by and/or affiliated
with Marriott. (Id. ¶ 23.) The next business day, Plaintiff
contacted the sous chef to inform him that she would be unable to accept
the position. (Id. ¶ 24.) Upon identifying herself,
Plaintiff was "immediately aware that the Sous Chef had knowledge of her
termination and Settlement Agreement." (Id. ¶ 25.)
Immediately after Plaintiff's conversation with the sous chef, Plaintiff
contacted her sister and requested that she call the Marriott and request
an employment reference for Plaintiff. (Id. ¶ 26.)
Plaintiff was informed by her sister that she had spoken to a woman named
"Donna" and was told that there was no record of employment pertaining to
Plaintiff. (Id. ¶ 27.) Shortly thereafter, Plaintiff called
Marriott, requested the same information, and received the same response.
(Id. ¶ 28.)
Upon contacting both Marriott and the Union about the situation,
Plaintiff received a written verification of employment from Ms. Cabibi.
(Id. ¶ 37.) After receiving the employment verification,
Plaintiff informed Marriott and the Union that the verification was
insufficient to remedy their breach of contract. (Id. ¶¶
Plaintiff filed this action on January 22, 2002. Her complaint sets
forth three claims: Count One asserts a claim for breach of contract; Count Two asserts
a claim of fraud and deceit; and Count Three asserts a claim for
A. Motion to Remand
Plaintiff moves to remand the action to state court on the basis that
this Court lacks subject matter jurisdiction. Defendants respond that
Plaintiff's state law claims for breach of contract and for fraud and
deceit are preempted by the federal Labor Management Relations Act
("LMRA"), thereby establishing federal jurisdiction under
28 U.S.C. § 1331.
A defendant in an action filed in state court may remove that action to
federal court under 28 U.S.C. § 1441(a) if the plaintiff's
"well-pleaded complaint" includes a federal cause of action.
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). When a
claim purporting to be based on state law falls within an area that
Congress has completely preempted, the complaint is considered from its
inception a federal claim and therefore arises under federal law within
the original jurisdiction of the federal court. Id. at 393. In
deciding a question of subject matter jurisdiction, a district court can
look to evidence outside the pleadings. Luckett v. Bure,
290 F.3d 493, 496-97 (2dCir. 2002).
The facts set forth in the complaint allege that the Rihga Defendants
breached the Settlement Agreement that had resolved Plaintiff's grievance
when they declined to confirm Plaintiff's employment. The complaint
further alleges that the Union, Herrick Feinstein, and Joseph Farelli
(collectively, "Union Defendants") committed fraud and breached their
"duty to act in good faith" while representing Plaintiff during her
grievance proceedings. (Compl. ¶ 75.)
Although Plaintiff sets forth these allegations in common law terms,
Defendants are correct that such common law claims are preempted by the LMRA
where, as here, they arise out of proceedings pursuant to a collective
bargaining agreement. See United Steelworkers of America v.
Rawson, 495 U.S. 362, 368 (1990); Local 300, Nat'l Postal Mail
Handlers Union. AFL-CIO-CLC v. United States Postal Serv., 1994 U.S.
Dist. LEXIS 16610, *5 (S.D.N.Y. Nov. 21, 1994). The preemptive power of
Section 301 has been made imminently clear by the Supreme Court:
The preemptive force of Section 301 is so powerful
as to displace entirely any state cause of action
for violation of contracts between an employer and
a labor organization. Any such suit is purely a
creature of federal law, notwithstanding the fact
that state law would provide a cause of action in
the absence of Section 301.
Franchise Tax Bd. v. Construction Laborers Vacation
Trust, 463 U.S. 1
, 23 (1983).
Claims that an employer has failed to comply with a grievance
settlement agreement that was reached pursuant to the grievance and
arbitration provisions of a collective bargaining agreement and that the
union has allegedly mishandled the dispute constitute hybrid 301/duty of
fair representation claims governed by section 301 of the LMRA. See
DelCostello v. Int'l Brhd. of Teamsters, 462 U.S. 151, 165 (1983).
Thus, Plaintiff's common law claims in this regard are preempted by
Because Plaintiff's state law claims based on the her former employer's
alleged failure to comply with the settlement agreement and the Union's
failure to adequately represent her are preempted by federal law,
Plaintiff's action could have properly been brought in this Court. Thus,
Defendant's removal of the case from state court was proper, and
Plaintiff's motion to remand is denied.
B. Motions to Dismiss Defendants have submitted three separate motions to dismiss, together
with accompanying affidavits and exhibits; Plaintiff's response also
includes evidentiary submissions. Rule 12(b) states, "If, on a motion
asserting the defense numbered (6) to dismiss for failure of the pleading
to state a claim upon which relief can be granted, matters outside the
pleading are presented to and not excluded by the court, the motion shall
be treated as one for summary judgment. . . ." Fed.R.Civ.P. 12(b).
Because the materials submitted to the Court lie outside the complaint,
it is appropriate for the Court to treat Defendants' motions as a motion
for summary judgment, as provided in Federal Rule of Civil Procedure
12(b). See Chambers v. Time Warner, Inc., 282 F.3d 147, 154 (2d
Cir. 2002) ("This conversion [to a summary judgment motion] is `strictly
enforced' whenever a district court considers extra-pleading material in
ruling on a motion to dismiss."); Brass v. Am. Techs., Inc.,
987 F.2d 142, 150 (2d Cir. 1993) (noting that courts deciding a motion to
dismiss under Rule 12(b)(6) may only consider allegations in the
complaint and documents incorporated in or attached to the complaint).
1. Claims Arising Out of Plaintiff's Grievance Proceedings
and the Resulting Settlement Agreement
As explained above, section 301 of the LMRA governs Plaintiff's claims
arising out of Plaintiff's grievance proceedings and compliance with the
Settlement Agreement. Accordingly, the Court will evaluate the motions to
dismiss these claims in light of this statute.
a. Section 301 Action
In order to maintain an action under Section 301, an employee must
exhaust any arbitration procedures provided in the collective bargaining
agreement. Dougherty v. AT&T, 902 F.2d 201, 203 (2d Cir. 1990). This requirement applies not only
to grievance proceedings themselves, but also attempts to enforce
settlements agreed to prior to the commencement of arbitration.
Local 300, Nat'l Postal Mail Handlers Union, AFL-CIOCLC 1994
U.S. Dist. LEXIS 16610, *5 ("The parties' obligation to resort to the
grievance-arbitration procedure does not change merely because the
instant dispute involves a settlement agreement that concerns a prior
grievance under the [collective bargaining agreement]").
The IWA contains an arbitration provision requiring the parties to
submit to arbitration "all complaints, disputes or grievances arising
between the parties hereto involving questions or interpretation or
application of any clause of this Agreement, or any acts, conduct or
relations between the parties, directly or indirectly . . ." The Second
Circuit has held an identical arbitration clause in a collective
bargaining agreement to exclude "[n]o grievance either specific
or general" from its coverage. Pitta v. Hotel Ass'n of New York
City, 806 F.2d 419, 422 (2d Cir. 1986).
In view of the broad language of the IWA arbitration clause, the Court
finds that Plaintiff's claim that the Marriott and Rihga Defendants
breached their obligations under the Settlement Agreement must be
submitted to arbitration prior to being resolved in federal court.
Accordingly, Plaintiff's Section 301 claims are dismissed.
b. Duty of Fair Representation Claim
Plaintiff claims that the Union Defendants failed to adequately
represent her by allowing her to waive workers compensation benefits in
the Settlement Agreement. As discussed above, such claims fall under
federal law as a claim for breach of a duty of fair representation. The
Union Defendants argue that this claim must be dismissed as barred by the
applicable statute of limitations.
A union has a duty to fairly represent all employees subject to a
collective bargaining agreement Spellacy v. Airline Pilots Assn.
Int'l 156 F.3d 120, 126 (2dCir. 1998). A plaintiff alleging a duty
of fair representation claim must establish that the union's actions were
arbitrary, discriminatory, or in bad faith, and that such actions caused
the plaintiff's injuries. Id.
A claim that a union breached its duty of fair representation is
governed by a six-month statute of limitations. DelCostello,
462 U.S. 151, 158. The limitations period accrues when the plaintiff knew
or reasonably should have known that a breach occurred. Flanigan v.
Int'l Bhd. of Teamsters, Truck Drivers Local 671, 942 F.2d 824, 827.
Plaintiff's breach of duty claim against the Union Defendants is based
on their representation of Plaintiff during her grievance proceedings,
and particularly their actions with respect to the Settlement Agreement
provisions waiving Plaintiff's right to unemployment compensation.
According to the complaint, Plaintiff signed the Settlement Agreement on
May 1, 2001. Therefore, the Court finds that Plaintiff knew or should
have known of the waiver of her rights to unemployment compensation at
that time. Because Plaintiff did not file this action until January 22,
2002, approximately nine months later, her breach of duty claim is
dismissed for failure to file within the statutory period.
2. Defamation Claim
Plaintiff claims that Marriot and Cabibi "knowingly, willfully,
maliciously and intentionally set out to defame [Plaintiff's] reputation
in the industry by stating that they had no record of her employment."
(Compl. ¶ 77). Marriott and Cabibi assert that the defamation claim
must be dismissed because Plaintiff has failed to state a claim under
Rule 12(b)(6). A claim for defamation requires a showing that the defendant committed
either libel or slander. "Libel is defined as a `publication, expressed
in printing or writing or by symbols or pictures, concerning a living
person which is false and tends to injure his reputation and thereby
expose him to public hatred, contempt, scorn, obloquy, or shame.'"
Glendora v. Kofalt 162 Misc.2d 166, 175, 616 N.Y.S.2d 138, 144
(1994) (quoting 43 N.Y. Jur. 2, Defamation and Privacy § 1) Slander,
on the other hand, constitutes an injury to a person's reputation or good
name by malicious or scandalous words. Glendora, 162 Misc.2d at
In order to state a claim for defamation under New York law, a
complaint must set forth facts showing: (1) a defamatory statement of
fact concerning the plaintiff; (2) publication to a third party; (3)
fault (either negligence or actual malice); (4) falsity of the defamatory
statement; and (5) special damages or per se actionability (defamatory on
face of statement). Celle v. Filipino Reporter Enterprises,
209 F.3d 163, 176 (2d Cir. 2000).
Plaintiff alleges that her sister contacted Rihga/Marriott Human
Resources and asked for an employment reference for Plaintiff.
Plaintiff's sister was allegedly told by "Donna" that she had no records
indicating that Plaintiff had been employed by Rihga/Marriott within the
time frame indicated. Plaintiff further alleges that she thereafter
called Human Resources herself, requested the same information, and
received the same response.*fn1
Plaintiff asserts that she was defamed "in her industry." (Compl. ¶¶
77, 78). However, Plaintiff fails to allege that her sister works in the same industry as
she, and thus fails to show how the statements regarding her employment
caused damage to her integrity or credibility within her industry.
Because Plaintiff has not alleged that this statement damaged her in any
way, Plaintiff's defamation claim must be dismissed. See Rall v.
Hellman, 284 A.D.2d 113, 113-14, 726 N.Y.S.2d 629, 63-32 (1st Dep't
2001) (dismissing defamation claim where there was no allegation that
plaintiff suffered any damages as a result of the alleged defamatory
For the reasons set forth above, Plaintiff has failed to state a claim
on which relief may be granted. Therefore, Defendants' motions are
GRANTED and Plaintiff's claims are dismissed in their entirety. The Clerk
of the Court is directed to close the case and remove the file from the