Facts
- Caterpillar employed the respondents at its San Leandro, California facility, initially in union-represented positions covered by a collective bargaining agreement (CBA).
- Respondents were later promoted to management/salaried positions outside the bargaining unit.
- Respondents alleged that, while in nonunion jobs, Caterpillar made individual promises of continued employment and transfer opportunities if the facility closed, and later stated that downgrades back to union jobs were temporary.
- Caterpillar later downgraded respondents back into union positions and then announced the plant’s closure and their layoffs.
- Respondents sued in California state court asserting only state-law claims, principally breach of individual employment contracts.
Issues
- Whether respondents’ state-law claims for breach of individual employment contracts were completely preempted by § 301 of the LMRA such that they arose under federal law and were removable.
- Whether removal may be based on a federal preemption defense when the complaint, on its face, pleads only state-law causes of action.
Decision
- The Supreme Court unanimously affirmed the Ninth Circuit.
- The Court held the action was improperly removed because the complaint, as pleaded, did not arise under § 301 and was not completely preempted.
- Caterpillar’s contention that federal labor law superseded any individual agreements was treated as a defense insufficient to create removal jurisdiction.
- The case was to proceed in state court.
Legal Principles
- Federal-question jurisdiction under the well-pleaded complaint rule exists only when a federal question appears on the face of the plaintiff’s properly pleaded complaint.
- A case may not be removed on the basis of a federal defense, including a preemption defense, even if the defense is expected or would likely control the outcome.
- § 301 LMRA complete preemption applies to state-law claims founded directly on rights created by a CBA or substantially dependent on interpreting a CBA.
- State-law claims based on independent individual employment contracts are not converted into § 301 claims merely because the defendant argues that the CBA or federal labor law defeats them.
Conclusion
Because the employees pleaded state-law claims based on individual promises and did not base their causes of action on the CBA or require its interpretation, federal jurisdiction was absent; anticipated § 301 preemption operated only as a defense and could not support removal.