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Wheeler v. Graco Trucking Corp.

Court of Appeals for the Third Circuit
985 F.2d 108, 1993 WL 11960 (1993)
ELI5:

Sections

Rule of Law:

Under Section 301 of the Labor Management Relations Act, federal law preempts state law wage claims based on collective bargaining agreements and requires employees to exhaust contractual grievance and arbitration procedures before seeking judicial remedies.


Facts:

  • Kiewit Perini served as the general contractor for a federally financed highway project known as the Blue Route, which required specific wage rates for on-site mechanics and laborers.
  • Graco Trucking Corporation was a subcontractor on the project and had a collective bargaining agreement with Teamsters Local 312.
  • The collective bargaining agreement contained mandatory grievance and arbitration procedures for resolving disputes.
  • In 1988, Graco obtained authorization from the union to pay a special, lower wage rate ($11.30/hour) for drivers transporting materials from an off-site quarry to remain competitive.
  • Sherman Wheeler worked for Graco as a dump truck driver, hauling materials between the off-site quarry and the highway construction site.
  • Graco paid Wheeler the lower off-site rate for his hauling duties rather than the higher on-site rate ($14.30/hour).
  • Wheeler was eventually discharged for chronic tardiness.
  • While Wheeler filed a grievance regarding his termination, he never filed a grievance regarding his pay rate or alleged underpayment.

Procedural Posture:

  • Wheeler filed a lawsuit in federal district court alleging breach of the collective bargaining agreement and violation of the Pennsylvania Wage Payment and Collection Law.
  • Graco moved for summary judgment, arguing Wheeler failed to file a grievance concerning his wages.
  • The district court denied Graco's motion for summary judgment.
  • A jury trial was held regarding Wheeler's termination claim, resulting in a verdict in favor of Graco.
  • Following the trial, the district court issued a separate opinion regarding the wage claim, ruling that Wheeler was entitled to the higher wage rate under the Federal-Aid Highway Act and state law.
  • Graco appealed the district court's decision on the wage claim to the United States Court of Appeals for the Third Circuit.

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Issue:

Is an employee barred from suing an employer in federal court for wages allegedly due under a collective bargaining agreement and state wage laws if the employee failed to utilize the mandatory grievance and arbitration procedures outlined in that agreement?


Opinions:

Majority - Alito

Yes, the employee is barred from bringing this suit because federal labor policy strictly mandates adherence to negotiated dispute resolution processes. The court reasoned that under the Labor Management Relations Act (LMRA), specifically Section 301, an employee seeking a remedy for a breach of a collective bargaining agreement (CBA) must exhaust the exclusive grievance and arbitration procedures established by that agreement before suing in court. Wheeler failed to grieve his wage claim. Furthermore, the court held that Wheeler's state law claim under the Pennsylvania Wage Payment and Collection Law was preempted by federal law. Citing Supreme Court precedents like Lucas Flour and Allis-Chalmers, the court explained that any state claim substantially dependent on analyzing a CBA must be treated as a federal claim under § 301 or dismissed as preempted. Finally, regarding the prime contract argument, the court noted the contract expressly limited the higher wage requirement to work performed "upon the site," which excluded Wheeler's off-site hauling.



Analysis:

This decision reinforces the supremacy of federal labor law over state wage laws when collective bargaining agreements are involved. It underscores the critical importance of the "exhaustion of remedies" doctrine, protecting the integrity of private arbitration agreements between unions and employers. By ruling that state wage claims based on union contracts are preempted, the Third Circuit ensures that labor contracts are interpreted uniformly across the country under federal standards, rather than being subject to varying state laws. It prevents employees from bypassing agreed-upon grievance mechanisms to seek relief directly in court.

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