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Don’t think federal laws always trump state claims

by on
in Employee Benefits Program,Employment Law,Human Resources

A recent 5th Circuit Court of Appeals decision makes one thing clear: Employees and their lawyers are always looking for novel ways to sue employers—and sometimes state law gives them additional ways to do just that.

That’s why it’s crucial for employers with operations in more than one state to know which state laws affect employees—and not just the obvious ones, either.

Recent case:
Gary Sawyer worked for DuPont and was a union member. When the company wanted to transfer some of its operations to a subsidiary in Texas, the union and the company negotiated the terms and created a new collective bargaining unit to facilitate the move.

Then the company asked employees whether they wanted to transfer and work in the new unit and under the new contract. Several inquired about the possibility that the unit might be sold. A manager reassured them that it would not because “We’re the whale, and fish don’t eat whales.” Sawyer accepted the transfer. Then, of course, DuPont sold the unit.

Sawyer sued, alleging that he had been fraudulently induced into accepting the transfer—a Texas state law claim. DuPont said Sawyer had to sue under either the Employee Retirement Income Security Act or the National Labor Relations Act, both federal laws they alleged trump state claims.

The 5th Circuit Court of Appeals said Sawyer’s claim could go forward because federal law did not preempt it. States still have a right to govern employment relationships, and this claim wasn’t about benefits or unionization—it was about false promises inducing employees to accept a transfer. (DuPont v. Sawyer, No. 06-20865, 5th Cir., 2008)

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