For employers facing the seemingly endless onslaught of wage and hour class actions, evaluating the likelihood of early dismissal is critical. One possible basis for dismissing wage and hour claims is preemption by the Labor Management Relations Act (LMRA). LMRA preempts state law claims when a court must interpret the terms of a collective bargaining agreement (CBA) to determine the validity of the claims. Because CBAs have grievance procedure provisions that employees must utilize before filing a lawsuit, and the time period for initiating such grievances is generally short, success on the LMRA preemption argument may result in dismissal of the action.

In Pruell v. Caritas Christi, the First Circuit Court of Appeals recently confirmed that LMRA preemption, if proven, is a valid basis for dismissal of state wage and hour claims. In so doing, however, the First Circuit held that, for LMRA preemption to apply, the named plaintiffs must be union employees subject to a CBA. According to the First Circuit, it is not enough to show that some of the putative class members were union employees because subject matter jurisdiction is determined by examination of the named plaintiff’s claims. Until subject matter jurisdiction is determined and a class is certified, putative class members are “potential parties” only. Thus, in Pruell, because neither the plaintiff nor the defendant addressed whether the named plaintiffs were union employees, the First Circuit reversed the district court’s dismissal and remanded the case for further proceedings to determine whether the named plaintiffs were union employees.

In contrast to the Pruell decision, the district court’s decisions in Cavallaro v. UMass Memorial Health Care demonstrate exactly how LMRA preemption can result in dismissal of wage and hour claims. The hospital, represented by Littler Mendelson, argued that the named plaintiffs were union employees and their state law claims were preempted by the LMRA because resolution of the  claims was substantially dependent upon the terms of a CBA. Further, the hospital argued, the claims should be dismissed under the LMRA because the plaintiffs failed to exhaust their remedies under the CBA before proceeding in court. The court agreed and dismissed the plaintiffs’ claims, finding that they were preempted and that the named plaintiffs admittedly had not exhausted their remedies.

The Court of Appeals decision in Pruell v. Caritas, although addressing LMRA preemption, makes clear that, at least in the First Circuit, prior to class certification the only relevant plaintiffs are those named in the complaint, and that a district court does not have jurisdiction over potential class members and their claims unless and until certification is granted.

For further information about LMRA preemption or the First Circuit’s decision, please contact Ms. Malloy, Greg Keating, or Lee Schreter, who represented UMass in the Cavallaro case.

Photo credit: Matthew S. Rambo