Surface Transportation Assistance Act of 1982: An Early End to State or Common Law Wrongful Discharge Claims?[dagger], The

Miller, Donald L II

I.

INTRODUCTION

The facts giving rise to Jason Thomas' lawsuit against Cross-Country Shipping Co. were, unfortunately, not uncommon in the trucking industry.1 These facts are presented briefly because they are typical of a number of claims in the trucking and transportation industry.

Cross-Country hired Thomas to drive interstate shipping routes in 2002. Although initially a good employee, Thomas' job performance quickly deteriorated. He began being insubordinate and, on multiple occasions, failed to arrive at his destinations on time. Because of this behavior, and because Thomas twice refused to make ordered deliveries, CrossCountry terminated his employment less than one year after he had been hired.

Although Cross-Country believed that it had legally terminated Thomas' at will employment,2 Thomas disagreed. Six months after his termination and within his state's statute of limitations for a state law wrongful-termination claim, Thomas filed suit against Cross-Country in the local United States District Court. Therein, he alleged that Cross-Country had illegally terminated his at will employment. Thomas claimed that he had been terminated not because of the above-described behavior, but instead because he had refused to violate state and federal safety regulations regarding in-service hours. Upon being served with Thomas' complaint, Cross-Country wondered whether there was any way that it could avoid engaging in protracted litigation while still standing by its decision to terminate the employment.

Fortunately, employers such as Cross-Country can, in some jurisdictions, prevail by dispositive motion on suits filed by ex-employees like Thomas. As this article discusses in more detail, a number of courts have held that state law claims like those of Thomas are preempted by the Surface Transportation Assistance Act of 1982 ("STAA").3 Because of this preemption, these courts have concluded that ex-employees are precluded from pursuing otherwise viable state law wrongful discharge claims. These employees must instead pursue their claims under the administrative procedures set up by the STAA.

Further, because the STAA provides that any complaint thereunder must be filed within just 180 days of the conduct prohibited under the STAA, several ex-employees miss this deadline and are therefore prohibited from pursuing even this administrative remedy. Because of this preemption and the applicable deadline for seeking permissible relief, many employers like Cross-Country are able to successfully and economically stand by their decisions to terminate employees like Thomas.

II.

THE ACT'S PERTINENT PROVISIONS

The STAA provides sweeping regulation of the interstate trucking industry. Acting on a Congressional desire to create a series of public safety standards, the STAA and its related safety regulations are designed:

to promote the safe operation of commercial motor vehicles, to minimize the dangers to the health of operators of commercial motor vehicles and other employees whose employment directly affects motor carrier safety, and to ensure increased compliance with traffic laws and with the commercial motor vehicle safety and health regulations and standards prescribed and orders issued [under the STAA].4

Within this array of regulations, and pertinent to the case study laid out in the Introduction, lies the statutory cap on the amount of in-service driving which an operator may undertake.5

The STAA is not simply a compendium of safety provisions, however. While the statute is designed to help the government fulfill its "substantial interest" in protecting the general public, the statute is also geared toward protecting employers and employees.6 According to the United States Supreme Court, the STAA achieves this goal by protecting the "substantial interest" of employers in controlling their workplaces and by protecting the "substantial interest" of employees in not being discharged for complaints regarding safety violations.7

Of specific importance to this article is the STAA provision that prohibits an employer from discharging or otherwise discriminating against an employee who refuses to violate the type of safety provision enumerated in the statute. According to the pertinent language of the STAA:

A person may not discharge an employee, or discipline or discriminate against an employee regarding pay, terms, or privileges of employment, because

(A) the employee, or another person at the employee's request, has filed a complaint or begun a proceeding related to a violation of a commercial motor vehicle safety regulation, standard, or order, or has testified or will testify in such a proceeding; or

(B) the employee refuses to operate a vehicle because

(i) the operation violates a regulation, standard, or order of the United States related to commercial motor vehicle safety or health; or

(ii) the employee has a reasonable apprehension of serious injury to the employee or the public because of the vehicle's unsafe condition.8

The STAA does not simply identify conduct in which no employer may engage. Instead, it goes farther and provides a remedy for employees who are the victims of that conduct. According to the STAA, "[a]n employee alleging discharge, discipline, or discrimination in violation of subsection (a) of this section, or another person at the employee's request, may file a complaint with the secretary of Labor not later than 180 days after the alleged violation occurred."9 After advising of the availability of this administrative remedy, the STAA then sets forth the chain of events that will follow such a complaint.10 This chain of events potentially culminates with a finding by the secretary of Labor that the employer must "take affirmative action to abate the violation, reinstate the complainant to the former position with the same pay and terms and privileges of employment, and pay compensatory damages, including back pay."11

III.

PREEMPTION OF STATE CLAIMS BY STAA

As noted, the STAA provides that employees who believe they have been discharged or otherwise disciplined in violation of the STAA "may file a complaint with the secretary of Labor not later than 180 days after the alleged violation occurred."12 Based on the language and purposes of the Act, several courts have concluded that this provision of the STAA preempts employees from successfully pursuing any otherwise-applicable state claims.

A. Overview of Bases for Preemption Generally

Discussion of preemption by the STAA requires a brief review of the Supremacy Clause of Article VI of the Constitution. Under the clause, all laws made pursuant to the Constitution shall be the "supreme law of the land" and shall therefore be legally superior to conflicting state laws.13 Despite this clause, however, a general presumption exists under which federal laws do not preempt state laws.14

In five situations, preemption occurs despite the presumption to the contrary:

(1) When Congress expresses a clear intent for such preemption when enacting a federal statute;15

(2) When there is a clear conflict between the state and federal statutes at issue;16

(3) When there is an implicit barrier to the state law in the federal law;17

(4) When Congress has "legislated comprehensively, occupying an entire field of regulation;"18 and

(5) When the state law will impede the achievement of the purpose of the Congressional objective.19

Put more generally, state and federal statutes can co-exist so long as Congress has not "explicitly or implicitly" eliminated the viability of the state statute with the passage of the federal statute.20

In order to preclude employees from pursuing otherwise viable state law claims for wrongful termination, employers must prove that the STAA satisfies one of these bases for preemption.

B. Groundbreaking STAA Preemption

In Watson v. Cleveland Chair Co.,21 the Supreme Court of Tennessee became the first court to conclude that the STAA preempted a state wrongful discharge claim. In the events giving rise to Watson, two employees alleged that they were discharged for their refusal to comply with state and Interstate Commerce Commission regulations and for their refusal to violate applicable speed limits. The employer denied these allegations, instead claiming that the employees were actually discharged for insubordination, having an unacceptable attitude, and using inappropriate language.

The trial court held that the STAA preempted any state claim that the employees would otherwise have, but the Tennessee Court of Appeals disagreed. It held that the employees had a viable state common law cause of action for wrongful discharge. According to the court of appeals, as a result of Tennessee's uncodified public policy "a cause of action for retaliatory discharge arises when an at-will employee is terminated solely for refusing to participate, continue to participate, or remain silent about illegal activities."22 The court then examined this stated public policy and found that it was compatible with, rather than preempted by, the STAA. According to the court, "there was no explicitly statutory directive that provided an exclusive remedy for Plaintiffs which would preempt Tennessee common law in regard to an action for retaliatory discharge."23

The Supreme Court of Tennessee reversed the decision of the court of appeals, thereby affirming the trial court's finding of preemption. It concluded that the plaintiffs' remedies were solely within the STAA, for Congress had "explicitly and implicitly confined jurisdiction under the [STAA] to the administrative and judicial procedures to be exercised by the Secretary of Labor[.]"24 Because this basis for preemption was satisfied, the plaintiffs had no viable state law claims, and the trial court's dismissal of the plaintiffs' suit on summary judgment was affirmed accordingly.

C. Additional Cases Finding Preemption

The District Court for the Western District of Tennessee quickly followed the lead of the Watson court. In Norman v. M.S. Carriers, Inc.,25 it reached the same preemption conclusion based on Congress' implicit confinement of wrongful discharge claims to the Secretary of Labor. According to the court, "[a]llowing parties to resort to other remedies would frustrate what this Court believes to be Congress' purpose. That being that the secretary of Labor should decide whether an employee has been injured for failing to violate federal rules and regulations."26

In the years after Watson and Norman, the District Court for the Northern District of Ohio27 and the Sixth Circuit Court of Appeals reached similar decisions.28 Most recently, in Kornischuk v. Con-Way Central Express, the District Court for the Southern District of Iowa decided that the STAA preempted the ability of a former employee to bring a wrongful discharge claim under a state statute.29 According to the Kornischuk Court, "because a detailed statutory procedure exists by which an aggrieved employee may administratively enforce the public policy embodied in [the STAA], he may not now pursue a common law wrongful discharge claim based on the same policy."30 Kornischuk represents the most-recent decision regarding the issue of STAA preemption.

IV.

CONTRARY VIEWS

Despite the early decisions in Watson and Norman and the recent Kornischuk decision, several courts have held that the STAA does not preempt state law wrongful discharge claims for employees within or formerly within the transportation industry. Courts finding that the STAA does not preempt state law claims do so based on one or more of the following three arguments:

(1) The legislative history behind the STAA demonstrates an intent not to be preemptive;

(2) The use of "may" in the STAA demonstrates that a complaint to the secretary of Labor is not intended to be an exclusive remedy; and

(3) The purpose of state wrongful discharge statutes and common law is in furtherance of the purposes of the STAA, not in conflict with or frustration of it.

Each argument is described herein.

A. Legislative History

Beginning with Germann v. Vulcan Materials Co.,31 four courts32 have based their finding of no preemption, at least in part, on a sliver of the legislative history of the STAA. As quoted by Germann and the other decisions, during Senate debate over the STAA, one of the Senators "expressed his concern surrounding the preemptive effect of the STAA over 'other avenues of relief and remedies that might be available to employees under union contracts, or statutory or common law.'"33 Germann and the other similar decisions quote Senator John Danforth, the principal author of the STAA, as addressing this concern by stating, "[t]he driver protection provisions of [the STAA] are most certainly intended to strengthen, not displace, any existing remedies employees may have at law."34

B. Use of "May" Suggests STAA Not Exclusive

In two decisions, Bliss v. Stow Mills, Inc.35 and Briones v. Ashland, Inc.,36 the courts concluded that pursuing the administrative relief provided by the STAA is optional, and that the STAA therefore does not preempt similar state law claims. The basis for these decisions lies in the STAA's use of the word "may" to describe an employee's right to submit a complaint to the Secretary of Labor.37

Neither court offers much discussion of this aspect of its conclusion, but each relies on Norris v. Lumbermen's Mutual Casualty Co.38 in reaching the conclusion. Although the Norris decision involved preemption of a whistleblower statute under the Energy Reorganization Act ("ERA"), rather than the STAA, each Act has the same "may" language, such that Norris is arguably relevant. In alleged support of the subsequent decisions in Bliss and Briones, the First Circuit Court of Appeals held in Norris that the "may" language of the ERA did not preempt state whistleblower claims.39

What Bliss and Briones failed to consider in relying on Norris is that, Norris notwithstanding, courts have repeatedly held that the ERA does preempt several state law whistleblower claims.40 Indeed, in Norman v. M.S. Carriers, Inc.,41 the district court considering STAA preemption in Tennessee actually relied on the ERA cases in which courts found preemption to determine that there was also preemption under the STAA. Given that the United States Supreme Court declined to grant certiorari in Kansas Gas & Electric Co. v. Brock42 after the Tenth District Court of Appeals found that the ERA did preempt state law whistleblower claims, it seems that the STAA's use of "may" and the outcomes of the ERA preemption cases actually favor a finding of preemption under the STAA, rather than a finding of no preemption.

C. Purposes of STAA and State Statutes Not in Conflict

This is the most common reason provided for a finding that the STAA does not preempt state claims by terminated employees against their employers. No fewer than five decisions have concluded that, because the state statutes purportedly further, rather than conflict with or impair the STAA, the Act does not preempt these state statutes.43 As the court explained in Whitworth v. TNT Bestway Transportation, Inc.,44 for example, "[a]llowing Texas to create additional protections for civic-minded employees does not frustrate Congress' purposes behind enacting the STAA."45

What this argument fails to consider, however, is that there are five potential bases for the preemption of a state statute.46 Even if a court decides that a state statute furthers the purpose of the STAA, as opposed to conflicting with or impairing that purpose, such a decision is not enough to resolve the preemption issue. Instead, the court must also confirm that none of the other bases of preemption, such as implicit or explicit confinement of jurisdiction to an administrative procedure or comprehensive occupation of an entire field of regulation, exist. In none of these decisions does the court examine and reject each of the potential bases for preemption, and these decisions are flawed accordingly.

V.

THE 180 DAY LIMITATION

While courts disagree regarding whether the STAA preempts state wrongful discharge claims, there is no dispute regarding the deadline for making an STAA complaint to the Secretary of Labor. Section 31105(b) provides that any complaint to the Secretary of Labor must be filed "not later than 180 days after the alleged violation occurred." Therefore, to the extent that an ex-employee has not filed his complaint to the Secretary of Labor within 180 days, the ex-employee will be barred from pursuing his STAA remedy. Coupled with the preemption of state law claims, this bar will leave the ex-employee without any viable claim against the former employer.

VI.

CONCLUSION

For employers like Cross-Country, the STAA provides a method by which disgruntled ex-employees' complaints may be resolved without extensive litigation. For employees like Thomas, however, preemption under the STAA may mark the end of the road for his complaints if he is not attentive to the 180-day complaint period.

[dagger] Submitted by the authors on behalf of the FDCC Transportation section.

1 While this Introduction is based on a real case, the names of the parties in this Introduction are fictitious.

2 Of course, unless otherwise limited by statute, an at will employee can generally be terminated "for good cause, for no cause, or for a cause that some might view as morally indefensible." Baker v. Ky. State Univ., 45 Fed. Appx. 328, 330 (6th Cir. 2002).

3 49 U.S.C. §§31101-31108(2004).

4 Id § 31131 (a)(1)-(3).

5 49 C.F.R. § 395.3 (2004).

6 Brock v. Roadway Express, Inc., 481 U.S. 252, 262-63 (1987).

7 Id.

8 49 U.S.C. §31105(a)(1)(2004).

9 Id. § 33105(b)(1).

10 Id. § 33105(b).

11 Id. § 33 105(b)(3)(A). Under the remedies provision of the STAA, the secretary of Labor also has the power to award the complaining employee reasonable costs and attorney fees from the wrongdoing employer. Id. §33105(b)(3)(B).

12 Id. §31105(b)(l).

13 U.S. CONST, art. VI.

14 Maryland v. Louisiana, 451 U.S. 725 (1981).

15 Jones v. Rath Packing Co., 430 U.S. 519 (1977).

16 Free v. Bland, 369 U.S. 663(1962).

17 Shaw v. Delta Airlines, Co., 463 U.S. 85 (1983).

18 Rice v. Santa Fe Elevator, 331 U.S. 218 (1947).

19 Hines v. Davidowitz, 312 U.S. 52 (1941).

20 Gulf Offshore Co. v. Mobile oil Corp., 453 U.S. 473 (1981).

21 789 S.W.2d 538 (Term. 1989).

22 Id. at 540.

23 Id. at 541.

24 Id. at 544.

25 741 F. Supp. 148 (W.D. Tenn. 1990).

26 Id. at 150.

27 Davis v. Customized Transp., Inc., 854 F. Supp. 513 (N.D. Ohio 1994).

28 Barlow v. Martin-Brower Co., 2000 U.S. App. Lexis 443, App. No. 98-6542 (6th Cir., Jan. 5, 2000).

29 Kornischuk v. Con-Way Cent. Express, 2003 U.S. Dist. Lexis 14459, App. No. 1-03-CV-10013 (S.D. Iowa, June 4, 2003).

30 Id. at *8.

31 106 F. Supp. 2d 1010 (S.D. Cal. 2000).

32 In addition to Germann, see Glasscock v. Alliant Foodservice, Inc., 232 F. Supp. 2d 1148 (D. Or. 2001); Bliss v. Stow Mills, Inc., 786 A.2d 815 (N.H. 2001); Briones v. Ashland, Inc., 164 F. Supp. 2d 228 (D. Mass. 2001).

33 Germann, 106 F. Supp.2d at 1015 (citing 128 Cong. Rec. S 32511 (Dec. 19, 1982)).

34 Id.

35 786 A.2d 815 (N.H. 2001).

36 164 F. Supp. 2d 228 (D. Mass. 2001).

37 Bliss, 786 A.2d at 818; Briones, 164 F. Supp.2d at 231.

38 881 F.2d 1144, 1147 (1st Cir. 1989).

39 Bliss, 786 A.2d at 818; Briones, 164 F. Supp. 2d at 231.

40 See, e.g., Norman v. Niagara Mohawk Power Corp., 873 F.2d 634 (2d Cir. 1989); Willy v. Coastal Corp., 855F.2d 1160 (5th Cir. 1988); Kansas Gas & Electric Co. v. Brock, 780 F.2d 1505 (10th Cir. 1985), cert, den'd., 478 U.S. 1011 (1986).

41 Norman, 741 F. Supp. at 150.

42 780 F.2d 1505 (10th Cir. 1985), cert, den'd., 478 U.S. 1011 (1986).

43 See Parten v. Consolidated Freightways Corp., 923 F.2d 580 (8th Cir. 1991); Walt's Drive-a-Way Service, Inc. v. Powell, 638 N.E.2d 857 (Ind. Ct. App. 1994); Whitworth v. TNT Bestway Transp., Inc., 914 F. Supp. 1434 (E.D. Tex. 1996); Bliss v. Stow Mills, Inc., 786 A.2d 815 (N.H. 2001); Briones v. Ashland, Inc., 164 F. Supp. 2d 228 (D. Mass. 2001).

44 914 F. Supp. 1434 (E.D. Tex. 1996).

45 Id. at 1436.

46 See notes 15-20, infra and accompanying text.

Donald L. Miller, II is a member in the Louisville, Kentucky office of Frost Brown Todd LLC. He is licensed in Kentucky and Indiana and chairs the firm s Torts and Insurance practice group. Mr. Miller is a summa cum laude graduate of the University of Louisville School of Law. He chairs the FDCC s Transportation section. Mr Miller spends the majority of his time defending the firm s insured and self-insured clients in personal injury and extra-contractual claims of all kinds, where he has accumulated substantial trial and appellate experience. He is a member of FDCC and the American, Kentucky and Indiana Bar Associations.

William M. Harter is a senior associate in the Columbus, Ohio office of Frost Brown Todd LLC. Licensed in Ohio and West Virginia, he has experience is an array of areas, including: commercial, automobile and trucking insurance defense; insurance coverage and bad faith litigation; product liability; medical malpractice; and employment intentional tort defense. Mr. Harter has experience at all levels of litigation, from pre-suit evaluation through appellate work, and has significant trial experience.

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