Kane v. Matson Navigation Company, Inc.

Background

Mark Kane alleged that he worked aboard the M/V Kaimana Hila, which Matson owned and operated and Theodore Bernhard captained. Kane alleged that his shipping articles provided for 105 days of work from September 13, 2021, through December 26, 2021. He claimed that Bernhard issued him a warning letter after Kane reported that another sailor harassed and bullied him, read the letter aloud in front of four shipmates, confined Kane to his quarters, and threatened to handcuff him if he left. The next day, Bernhard terminated Kane and forcefully discharged him from the ship in Guam. Kane also alleged that Matson placed him on a two-year “do not hire” list.

Kane filed an amended complaint asserting retaliation under California’s Fair Employment and Housing Act, breach of employment contract, breach of the implied covenant of good faith and fair dealing, intentional interference with economic relations, defamation, and intentional infliction of emotional distress. Matson and Bernhard moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing principally that the Labor Management Relations Act’s section 301 preempted the claims because they arose from, or required interpretation of, the collective bargaining agreement between Matson and Kane’s union.

Section 301 preemption

Section 301 preempts a state-law claim when the claim arises entirely from a right or duty created by a collective bargaining agreement or when resolving the claim requires interpreting that agreement. The court found that Kane’s contract claim was preempted under either possible theory. The complaint was unclear about whether the relevant contract was the collective bargaining agreement or the shipping articles. If the collective bargaining agreement was the contract, the claim sought to enforce a right created by that agreement. If the shipping articles were the contract, deciding whether Matson could terminate Kane under California Labor Code section 2924 would require interpreting the collective bargaining agreement to determine Kane’s job duties.

The court therefore dismissed the breach-of-contract claim but granted Kane leave to amend because additional facts about the shipping articles might allow him to avoid preemption.

The court also dismissed with leave to amend the claim for breach of the implied covenant of good faith and fair dealing. The complaint expressly tied Kane’s and Matson’s duties to the collective bargaining agreement, so the claim either sought to enforce a duty created by that agreement or required interpreting it.

The court likewise dismissed with leave to amend the intentional-interference claim. As pleaded, that claim depended on an alleged breach of the employment contract, and determining whether a breach occurred would require interpreting the collective bargaining agreement.

Defamation

The court denied the motion to dismiss the defamation claim on preemption grounds. Kane alleged that the warning and termination letters falsely characterized him as violating workplace policies, ignoring safety precautions, refusing to cooperate, using vulgar or aggressive language, and bullying others. The court concluded that the complaint did not allege that the letters were issued as part of the collective bargaining agreement’s grievance procedure. The agreement did not appear to require written warning or termination letters or provide disciplinary guidance for them. Kane also did not allege that he started a formal grievance; instead, he alleged that his union declined to pursue one.

The court explained that the defamation claim focused on whether Bernhard’s statements were published, false, defamatory, unprivileged, and injurious—not on whether Kane’s termination was justified under the collective bargaining agreement. The defendants’ motion to dismiss the defamation claim on section 301 preemption grounds was therefore denied.

Intentional infliction of emotional distress

The court ruled that the intentional-infliction-of-emotional-distress claim was not preempted to the extent it was based on Bernhard’s alleged conduct, including publicly reading the letters, refusing Kane an opportunity to respond, confining him to his quarters, and threatening to handcuff him. The collective bargaining agreement did not establish grounds for discharge or discipline that would resolve whether those actions supported the claim. However, the court stated that any portion of the claim relying on an alleged violation of the collective bargaining agreement would be preempted. The defendants challenged this claim only on preemption grounds, so the court did not decide whether Kane had otherwise adequately pleaded it.

Retaliation

The court dismissed with prejudice Kane’s retaliation claim against Bernhard. Under California law, an employer may be liable for retaliation under the Fair Employment and Housing Act, but a non-employer individual may not be personally liable for participating in that retaliation. The court did not identify a contrary argument or authority from Kane.

Disposition

Judge William H. Orrick ordered that the motion to dismiss was granted in part and denied in part, with leave to amend. The amended complaint was due by January 10, 2023. The opinion does not separately state a disposition of the retaliation claim against Matson.