IN THE NATIONAL BASKETBALL ASSOCIATION, Petitioner, RON SWANSON AND NATIONAL BASKETBALL PLAYERS ASSOCIATION, Respondents.

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1 IN THE NATIONAL BASKETBALL ASSOCIATION, v. Petitioner, RON SWANSON AND NATIONAL BASKETBALL PLAYERS ASSOCIATION, Respondents. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTEENTH CIRCUIT BRIEF FOR RESPONDENTS Team 22 Counsel for Respondents January 14, 2013

2 QUESTIONS PRESENTED I. Whether the Court of Appeals for the Fourteenth Circuit correctly held that a state law claim is not preempted by section 301 of the Labor Management Relations Act because the drug testing policy within the Collective Bargaining Agreement does not meet the minimum standards of state law, and state law does not require a substantive interpretation of the Collective Bargaining Agreement. II. Whether the Court Of Appeals for the Fourteenth Circuit correctly vacated the arbitration award because the award condones a breach of fiduciary duty and a violation of public policy under New York law. i

3 TABLE OF CONTENTS QUESTIONS PRESENTED... i TABLE OF CONTENTS... ii TABLE OF CITED AUTHORITIES... iv OPINIONS BELOW...1 STATEMENT OF JURISDICTION...1 STATUTORY PROVISIONS...1 STANDARD OF REVIEW...1 STATEMENT OF THE CASE...1 Statement of the Facts...1 The Collective Bargaining Agreement and the Policy...3 Statutory Framework...3 Minnesota s Drug and Alcohol Testing in the Workplace Act...3 Labor Management Relations Act Section PROCEEDINGS BELOW...4 SUMMARY OF THE ARGUMENT...5 ARGUMENT...7 I. THE COURT OF APPEALS CORRECTLY HELD THAT SECTION 301 OF THE LMRA DOES NOT PREEMPT MR. SWANSON S DATWA CLAIM BECAUSE COLLECTIVE BARGAINING AGREEMENTS CANNOT SUPPLANT INDEPENDENT AND NONNEGOTIABLE STATUTORY RIGHTS....7 A. Section 301 Does Not Preempt Mr. Swanson s DATWA Claim Because the Claim Neither Depends On the CBA Nor Requires an Interpretation or Analysis of the CBA Mr. Swanson s DATWA claim is sufficiently independent of the CBA because the claim is based on state law and is unconnected to the Policy....9 ii

4 2. Mr. Swanson s DATWA claim does not require an interpretation or analysis of the CBA because purely factual questions do not require CBA interpretation B. Despite the NBA s Interest in Uniformity, the CBA Does Not Supersede or Replace DATWA Provisions Because Nonnegotiable Rights Cannot Be Preempted II. THE COURT OF APPEALS CORRECTLY VACATED THE ARBITRATION RULING BECAUSE THE ARBITRATION AWARD CONDONES A BREACH OF FIDUCIARY DUTY THAT IS CONTRARY TO PUBLIC POLICY A. The NBA, its Doctors, and Mr. Haverford Owed a Duty to the Players to Inform Them of Their Findings Concerning MegaChill Because the Players Reasonably Placed Their Confidence in the NBA, its Doctors, and Mr. Haverford B. The NBA, its Doctors, and Mr. Haverford Breached Their Duty By Willfully Not Informing the Players of the Specific Findings Regarding MegaChill Because They Were Privy to Superior Knowledge and This Conduct Violated an Ongoing Relationship of Trust C. This Breach of Fiduciary Duty Violated Explicit and Well-Defined Public Policies Under New York Law Because the Conduct of the NBA, its Doctors, and Mr. Haverford Violated Public Health and Safety Concerns CONCLUSION...24 APPENDIX iii

5 TABLE OF CITED AUTHORITIES FEDERAL CASES Page(s) Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985)... passim Anderson v. Ford Motor Co., 803 F.2d 953 (8th Cir. 1986)...13 Bogan v. General Motors Corp., 500 F.3d 828 (8th Cir. 2007)...8, 10, 11 Cramer v. Consolidated Freightways, Inc., 255 F.3d 683 (9th Cir. 2001)...13, 16 Delta Air Lines, Inc. v. Air Line Pilots Association, International, 861 F.2d 665 (11th Cir. 1988)...21, 24 Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246 (1994)...12, 14 Holmes v. NFL, 939 F. Supp. 517 (N.D. Tex. 1996)...11 Iowa Electric Light & Power Co. v. Local Union 204 of the International Brotherhood of Electrical Workers, 834 F.2d 1424 (8th Cir. 1987)...21 Karnes v. Boeing Co., 335 F.3d 1189 (10th Cir. 2003)...13, 14, 16 Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399 (1988)...12, 13, 17 Livadas v. Bradshaw, 512 U.S. 107 (1994)... passim Lumbermens Mutual Casualty Co. v. Franey Muha Alliant Insurance Services, 388 F. Supp. 2d 292 (S.D.N.Y. 2005)... passim MidAmerican Energy Co. v. International Brotherhood of Electrical Workers Local 499, 345 F.3d 616 (8th Cir. 2003)...23 Stringer v. NFL, 474 F. Supp. 2d 894 (S.D. Ohio 2007)...11 iv

6 Thompson v. Hibbing Taconite Holding Co., No , 2008 WL (D. Minn. Oct. 24, 2008)...10, 11 Trustees of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d 324 (8th Cir. 2006)...13, 15 United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198 (S.D.N.Y. 2002)...18 United Paperworkers International Union v. Misco, Inc., 484 U.S. 29 (1987)...21, 23 United Steelworkers v. Rawson, 495 U.S. 362 (1990)...8 W.R. Grace & Co. v. Local Union 759, International Union of the United Rubber, 461 U.S. 757 (1983)...21, 22 STATE CASES Callahan v. Callahan, 514 N.Y.S.2d 819 (N.Y. App. Div. 1987)... passim Walton-Floyd v. United States Olympic Committee, 965 S.W.2d 35 (Tex. Ct. App. 1998)...19 FEDERAL STATUTES 29 U.S.C. 185 (2006)... passim STATE STATUTES Minnesota Statute (2012)...10 Minnesota Statute (2012)...10 Minnesota Statute (2012)...10 Minnesota Statute (2012)...10 Minnesota Statute (2012)...14 v

7 OPINIONS BELOW The decision of the Court of Appeals for the Fourteenth Circuit is reported at Swanson v. NBA, No , slip op. at (14th Cir. 2012). The Fourteenth Circuit overturned the NBA s summary judgment award and vacated the arbitration ruling against the players and the National Basketball Players Association. The District Court for the Southern District of Tulania s judgment granting the NBA summary judgment and upholding the arbitration ruling is reported at Swanson v. NBA, No. 12-AC-0245, slip op. at 3-12 (S.D. Tulania 2012). STATEMENT OF JURISDICTION The Court has jurisdiction pursuant to 28 U.S.C The decision under review from the United States Court of Appeals for the Fourteenth Circuit is an order rendered before final judgment. STATUTORY PROVISIONS The statutory provisions are set out in relevant part in the Appendix and include the Minnesota Drug and Alcohol Testing in the Workplace Act and section 301 of the Labor Management Relations Act. STANDARD OF REVIEW For the purposes of this hypothetical, the appropriate standard of review for all issues is de novo. STATEMENT OF THE CASE Statement of the Facts Ron Swanson is a professional basketball player in the National Basketball Association (NBA) and a member of the National Basketball Players Association (NBPA). R. at 3. Mr. Swanson plays for the Minnesota Timberwolves. 1

8 In September 2011, the NBA became aware that MegaChill, an over-the-counter sleep supplement, contained desmopressin, a banned substance, through an investigation initiated by Dr. Chris Traeger, the Independent Administrator of the NBA s Policy on Anabolic Steroids and Related Substances (the Policy), and Dr. Andy Dwyer, a consulting toxicologist for the NBA. Id. at 3-4. Despite this discovery, neither the NBA nor its doctors informed the League s players of the specific findings regarding MegaChill. Id. at 4. Rather, the doctors notified Tom Haverford, Vice President of Law and Labor Policy for the NBA, of their discoveries. Id. Then, Mr. Haverford, along with Dr. Dwyer, against the request of the toxicology lab that conducted the tests on MegaChill, decided not to notify the Food and Drug Administration (FDA) of the specific findings. Id. After deciding to not notify the FDA, the NBA gave notice to the NBPA that MegaChill s distributor, Super Chill Goods Corporation, was a banned company and that the players were prohibited from doing business with Super Chill Goods. Id. The notice did not mention the specific findings linking desmopressin to MegaChill. Id. In response to this announcement, the NBPA ed the players, informing them that the company producing MegaChill was banned and that players cannot endorse any Super Chill Goods products. Id. Dr. Dwyer also sent a memorandum to the players, warning against taking any supplements that claimed to induce deeper sleep, but again failed to mention the specific finding that MegaChill contained desmopressin. Id. Following the NBA s discovery of desmopressin in MegaChill, Mr. Swanson took MegaChill for the purpose of obtaining a full night s rest before a scheduled preseason training camp scrimmage. Id. Mr. Swanson and three other NBA players tested positive for desmopressin as a result of their use of MegaChill. Id. 2

9 The Collective Bargaining Agreement and the Policy The Policy is part of the NBA s Collective Bargaining Agreement (CBA). R. at 7. The Policy requires the NBA, its doctors, and Mr. Haverford to educate NBA players on banned substances and requires the NBA to provide a confidential hotline that allows players to call anonymously both with questions and for support regarding the ingredients of supplements. Id. The Policy necessitates this proactive education because it imposes strict liability on players for positive drug tests. Id. According to the Policy, players are responsible for any substance that they ingest, both knowingly and unknowingly. Id. at 3. Any positive drug test under the Policy results in a suspension of at least twenty games. Id. The players, in turn, rely on the League for proper education on how to avoid positive tests and harmful drugs. Statutory Framework Minnesota s Drug and Alcohol Testing in the Workplace Act The Minnesota Drug and Alcohol Testing in the Workplace Act (DATWA) governs the minimum standards and requirements for employee drug testing in the state of Minnesota. Minn. Stat subdiv. 1 (2012). DATWA provides basic protections to employees in Minnesota, including the right to written notice of a failed drug test, a chance to explain any positive result on a drug test, and the ability to request a confirmatory re-test. Id subdiv. 1. DATWA also prohibits employers from disciplining an employee on the basis of a positive drug test that is unverified by a confirmatory re-test. Id subdiv. 10(a). Furthermore, DATWA clearly addresses CBAs. Id DATWA shall not be construed to limit the parties to a [CBA] from bargaining and agreeing with respect to a drug and alcohol testing policy that meets or exceeds, and does not otherwise conflict with, the minimum standards and requirements set out in DATWA. Id subdiv. 1. 3

10 Labor Management Relations Act Section 301 Section 301 of the Labor Management Relations Act (LMRA) provides that [s]uits for violation of contracts between an employer and a labor organization... may be brought in any district court of the United States having jurisdiction of the parties[.] 29 U.S.C. 185(a) (2006). [W]hen resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a 301 claim... or [be] dismissed as pre-empted by federal labor-contract law. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985). PROCEEDINGS BELOW Following the positive tests for desmopressin, the NBA suspended Mr. Swanson and the three other players for twenty games pursuant to the Policy. R. at 4. The players appealed their suspensions to an independent arbitrator, as provided for in the Policy. Id. The arbitrator upheld the players suspensions, basing the decision on the Policy s strict liability standard. Id. at 5. Mr. Swanson subsequently filed a lawsuit in Minnesota state court against the NBA, Dr. Traeger, Dr. Dwyer, and Mr. Haverford, claiming that his suspension under the Policy violated Minnesota s DATWA. Id. Mr. Swanson sought damages and an injunction against the arbitration award. Id. The NBA removed the proceeding to federal court, where it was consolidated with an action brought by the NBPA to vacate the arbitration award. Id. The District Court for the Southern District of Tulania granted summary judgment for the NBA, finding that section 301 preempted Mr. Swanson s DATWA claim, that the NBA, its doctors, and Mr. Haverford s conduct regarding the findings of the MegaChill test was within their reasonable discretion, and that the NBA had no affirmative duty to disclose the specific findings. Id. at 12. 4

11 The Court of Appeals for the Fourteenth Circuit disagreed, finding that DATWA was not preempted by section 301 for two reasons. Id. at First, the Policy did not meet the minimum standards required by DATWA. Id. Second, applying DATWA did not require a substantive interpretation of the CBA. Id. The Fourteenth Circuit also overturned the arbitration award, finding that the award violated public policy because the NBA, its doctors, and Mr. Haverford not only owed a fiduciary duty to the players to disclose the specific findings concerning MegaChill, but also breached that duty through their conduct. Id. at This case is now on appeal to review the judgment of the Fourteenth Circuit. SUMMARY OF THE ARGUMENT Section 301 of the LMRA only preempts a state law claim when the claim is based on a CBA provision or requires an interpretation or analysis of a CBA. Section 301 cannot displace independent and nonnegotiable state rights. Claims based on state statutory provisions only require a purely factual analysis and cannot be preempted by section 301. Under section 301, a party s interest in the uniform application of CBA provisions does not allow parties to contract for what would otherwise be illegal under state law. Here, Mr. Swanson s DATWA claim should be protected by this Court for three reasons. First, Mr. Swanson s claim requires no substantive interpretation of the CBA. Second, Mr. Swanson s claim is separate from CBA provisions and is only based on the facts surrounding the administration of his positive test and how that administration failed to meet the standards of Minnesota state law under DATWA. Third, Mr. Swanson s claim cannot be preempted by section 301 because he, as a citizen of Minnesota, is entitled to all of the protections of state law. These nonnegotiable protections cannot be bargained around through a CBA. 5

12 The arbitration ruling that suspended Mr. Swanson and three other NBA players violated established and well-defined public policy under New York law. An arbitration award that violates public policy must be vacated when the breached public policy is explicit and welldefined by law and legal precedent. Under New York law, a fiduciary duty arises when two parties are in an ongoing relationship of trust. New York also recognizes an affirmative duty to disclose information when one party is in a position of superior knowledge. Finally, protecting the public from harm and protecting trust in employment relationships are established public policies. Here, the NBA, its doctors, and Mr. Haverford willfully obfuscated information that a sleep supplement, MegaChill, contained a banned substance, desmopressin. This information was pertinent to the players and was within the scope of their employment with the NBA. The NBA, its doctors, and Mr. Haverford, because of their position of superior knowledge, had an affirmative duty to inform the players due to their ongoing relationship of trust. By refusing to notify the players of their desmopressin finding, the NBA, its doctors, and Mr. Haverford breached their fiduciary duty. This breach occurred within the scope of an employment relationship, and the breach threatened the players health and well-being, which damaged the relationship of trust in the workplace. 6

13 ARGUMENT I. THE COURT OF APPEALS CORRECTLY HELD THAT SECTION 301 OF THE LMRA DOES NOT PREEMPT MR. SWANSON S DATWA CLAIM BECAUSE COLLECTIVE BARGAINING AGREEMENTS CANNOT SUPPLANT INDEPENDENT AND NONNEGOTIABLE STATUTORY RIGHTS. The court of appeals correctly held that section 301 of the LMRA does not preempt Mr. Swanson s DATWA claim because collective bargaining agreements cannot supplant independent and nonnegotiable statutory rights. The court of appeals explained that the section 301 preemption doctrine neither preempts every employment dispute nor preempts all disputes concerning CBA provisions. R. at 17 (citing Miner v. Local No. 373, Int l Bhd. of Teamsters, 513 F.3d 854, 865 (8th Cir. 2008)). Instead, the court explained that the crucial inquiry is whether resolution of a state-law claim depends upon the meaning of a [CBA]. Id. (emphasis added) (quoting Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, (1988)). Based on this determination, the court reasoned that a claim under DATWA that alleges violations of particular statutory rights does not require a court to interpret any term of a [CBA]. Id. (quoting Lingle, 486 U.S. at 407). Consequently, because only a factual finding was necessary to explain that the NBA s conduct and testing procedures did not comply with DATWA requirements, the DATWA claim is not preempted by section 301. Id. at As we demonstrate below, this Court should affirm the court of appeals judgment that section 301 does not preempt Mr. Swanson s DATWA claim where: (A) Mr. Swanson s DATWA claim neither depends on the CBA nor requires an interpretation or analysis of the CBA; and (B) despite the NBA s interest in uniformity, the CBA does not supersede or replace DATWA provisions because nonnegotiable rights cannot be preempted. 7

14 A. Section 301 Does Not Preempt Mr. Swanson s DATWA Claim Because the Claim Neither Depends On the CBA Nor Requires an Interpretation or Analysis of the CBA. Section 301 does not preempt Mr. Swanson s DATWA claim because the claim neither depends on the CBA nor requires an interpretation or analysis of the CBA. Section 301 of the LMRA applies to [s]uits for violation of contracts between an employer and a labor organization, or, in other words, suits for breaches of CBAs. 29 U.S.C. 185(a) (2006). Although the pre-emptive force of [section] 301 extends beyond state-law contract actions[,] this doctrine is limited in scope. United Steelworkers v. Rawson, 495 U.S. 362, 369 (1990); see also Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985) ( Of course, not every dispute concerning employment, or tangentially involving a provision of a [CBA], is pre-empted by ). Section 301 does not preempt state law claims simply because the parties involved are subject to a CBA. Lueck, 471 U.S. at To apply the section 301 preemption doctrine and balance the interests of collective bargaining and state rights, courts have developed a two-prong test. See Bogan v. Gen. Motors Corp., 500 F.3d 828, 832 (8th Cir. 2007). First, courts review the claim itself to determine if the state law claim is sufficiently independent to survive preemption. Id. That is, a state law claim is preempted if it is based on a provision of the CBA and the CBA predicates the right upon which the claim is grounded. Id. Second, a state law claim is preempted by section 301 if it is dependent upon an analysis of the relevant CBA and requires interpretation of a CBA provision. Id. (internal quotation marks omitted). Simply referencing or consulting a CBA is insufficient for preemption. Livadas v. Bradshaw, 512 U.S. 107, (1994). Based on this standard, this Court should not find section 301 to preempt Mr. Swanson s DATWA claim 8

15 because the claim: (1) is sufficiently independent of the CBA; and (2) does not require an interpretation or analysis of the CBA. 1. Mr. Swanson s DATWA claim is sufficiently independent of the CBA because the claim is based on state law and is unconnected to the Policy. Mr. Swanson s DATWA claim is sufficiently independent of the CBA because the claim is based on state law and is unconnected to the Policy. Section 301 only extends to claims that are either inextricably intertwined with consideration of the terms of the labor contract or substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract. Lueck, 471 U.S. at 213, 220. In Lueck, the plaintiff asserted a state law claim for bad faith in handling his disability insurance claim. Id. at 206. There, this Court found that although the bad faith allegation was not contained in the CBA, the claim required the finding of an implied right. Id. at 215. This Court determined that finding an implied right is tightly bound with questions of contract interpretation that must be left to federal law and that [t]he duties imposed and rights established through the state tort [claim]... derive from the rights and obligations established by the [CBA]. Id. at Therefore, this Court held that section 301 preempted the claim of bad faith because resolving the claim was substantially dependent upon and inseparable from an analysis of the CBA. Id. at However, the holding in Lueck was narrow. Id. This Court explained that preemption is only required when resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a [CBA]. Id. at 220. Although section 301 preempts a state law claim that is inextricably intertwined with a CBA, a state law claim that relies upon nonnegotiable rights independent of any contractual right is not preempted by section 301. Id. at 213. In Lueck, this Court found that [t]he full scope of the pre-emptive effect of 9

16 federal labor-contract law remains to be fleshed out on a case-by-case basis. Id. at 220. Further emphasizing the narrow scope of its holding, this Court, in Livadas, explained that section 301 cannot be read broadly to pre-empt nonnegotiable rights conferred on individual employees as a matter of state law[.] 512 U.S. at 123; see also Bogan, 500 F.3d at 833 (holding that the plaintiff s claims were not inextricably intertwined and thus not preempted by section 301). The District Court for the District of Minnesota applied this Court s precedent in Thompson v. Hibbing Taconite Holding Co. when explaining the limited scope of section 301 preemption. No , 2008 WL , at *4 (D. Minn. Oct. 24, 2008). In Thompson, the court held that the plaintiff s allegation was inextricably interwoven with the terms of the CBA and was preempted by section 301. Id. at *6. However, the court explained that the claims would not have been preempted had the plaintiff drafted a complaint based entirely on state law[.] Id. Thus, the court aligned its analysis and reasoning with this Court s narrow section 301 preemption doctrine. Here, because DATWA creates standards independent of the CBA, Mr. Swanson s DATWA claim is based upon Minnesota law and not on either the CBA or the Policy. DATWA provides definitions for drugs and controlled substances, mandates its own requirements for drug and alcohol testing procedures, and compels minimum standards for testing laboratories. Minn. Stat , , subdiv. 1, subdiv. 1 (2012). At a minimum, DATWA requires that the CBA provides NBA players with the right to written notice of a failed drug test, a chance to explain any positive result on a drug test, and the ability to request a confirmatory retest. Id subdiv. 1. Furthermore, DATWA prohibits the NBA from disciplining its players on the basis of a positive drug test that is unverified by a confirmatory re-test. Id subdiv. 10(a). However, there is no indication that either the CBA or the Policy 10

17 provides NBA players with these minimum rights. As explained in both Lueck, 471 U.S. at 213 and Bogan, 500 F.3d at 833, Mr. Swanson has not raised any issues that are inextricably intertwined with or substantially dependent upon the CBA. Unlike Lueck, 471 U.S. at 215, because Mr. Swanson s DATWA claim is only based upon Minnesota law, there is no reason for this Court to review the CBA for an implied contract right to determine if there is a DATWA violation. Also, unlike Thompson, 2008 WL , at *4, Mr. Swanson s allegation only involves the facts surrounding the NBA s failure to comply with DATWA standards. This claim is based entirely on state law and should not be preempted because it is separate from and independent of whether the NBA adhered to its own requirements under the Policy. Nevertheless, the NBA argues that the DATWA claim substantially depends on the CBA because the Policy explicitly states that desmopressin is a banned substance, prescribes the procedures under which testing is performed, and requires the standard of strict liability for the enforcement of the use of prohibited substances. The NBA relies on Holmes v. NFL for the proposition that these elements of the Policy make it inseparable from the state law claim. 939 F. Supp. 517, 527 (N.D. Tex. 1996). In Holmes, the District Court for the Northern District of Texas held that an athlete s claims were substantially dependent upon an analysis of the CBA s drug program because [i]t simply cannot be determined whether the... test was the result of fraud... unless it is first resolved whether the Drug Program allowed the... test. Id. at 528; see also Stringer v. NFL, 474 F. Supp. 2d 894, (S.D. Ohio 2007) (holding that a wrongful death claim against the NFL was preempted because its resolution required an interpretation of the terms of the CBA). However, the NBA overstates its argument because, here, unlike both Holmes, 939 F. Supp. at 527 and Stringer, 474 F. Supp. 2d at , Mr. Swanson s DATWA 11

18 claim only asserts a nonnegotiable right existing outside of the Policy. R. at Section 301 does not preempt such a claim because it is substantially independent of the CBA. Id. at Mr. Swanson s DATWA claim does not require an interpretation or analysis of the CBA because purely factual questions do not require CBA interpretation. Mr. Swanson s DATWA claim does not require an interpretation or analysis of the CBA because purely factual questions do not require CBA interpretation. The section 301 preemption doctrine only applies when a state law claim requires the interpretation of a collectivebargaining agreement. Lingle, 486 U.S. at 413. In Lingle, an employee filed a grievance pursuant to a CBA for improper discharge and claimed that she had been discharged for exercising her rights under the Illinois workers compensation laws. Id. at 402. There, this Court explained that: [T]o show retaliatory discharge, the plaintiff must set forth sufficient facts from which it can be inferred that (1) he was discharged or threatened with discharge and (2) the employer s motive in discharging or threatening to discharge him was to deter him from exercising his rights under the Act or to interfere with his exercise of those rights. Id. at 407 (internal quotation marks omitted). Because the elements of the employee s claim only required answers to factual questions that were independent of CBA interpretation, this Court held that the claim was not preempted by section 301. Id. This Court continues to follow the doctrine advanced in Lingle that factual questions do not require CBA interpretation. For example, in Hawaiian Airlines, Inc. v. Norris, this Court explained that the issue to be decided in this action whether the employer s actions make out the element of discharge under Hawaii law is a purely factual questio[n]. 512 U.S. 246, 266 (1994) (internal quotation marks omitted). There, this Court held that the state law claims at issue were not preempted because the petitioners argument that resort to the CBA is necessary 12

19 to determine whether respondent, in fact, was discharged... [was] foreclosed by Lingle itself. Id. Furthermore, in Livadas, this Court held that there was no section 301 preemption because a wage rate provision in the CBA only had to be referenced to compute proper damages. 512 U.S. at There, this Court explained that not all negotiable claims are dependent upon a CBA and that when the meaning of contract terms is not the subject of dispute, the bare fact that a [CBA] will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished. Id. at 124. An otherwise independent claim will not be preempted if the CBA need only be consulted during its adjudication. Id. at Similarly, federal appellate courts have adhered to this Court s emphasis in Lingle that section 301 preemption requires the interpretation of a CBA. 486 U.S. at 413. In Karnes v. Boeing Co., a former employee brought an action against Boeing for firing him in violation of Oklahoma s Standards for Workplace Drug and Alcohol Testing Act. 335 F.3d 1189, 1192 (10th Cir. 2003). There, the United States Court of Appeals for the Tenth Circuit explained that an employee must prove that Boeing (1) discharged him based on his drug test, and (2) failed to confirm the results through a second test. Neither inquiry requires the court to interpret, or even refer to, the terms of a CBA. Id. at In Karnes, the court held that, under the Lingle standard, the former employee s claims were not preempted under section 301. Id. at ; see also Trs. of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d 324, 330 (8th Cir. 2006) (explaining that [a]n otherwise independent claim will not be preempted if the CBA need only be consulted during its adjudication ); Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 697 (9th Cir. 2001) (holding that an invasion of privacy claim was independent of the terms of the CBA and thus not preempted by section 301); Anderson v. 13

20 Ford Motor Co., 803 F.2d 953, 957 (8th Cir. 1986) (holding that a claim for fraud was not preempted because it did not require an extensive interpretation of the CBA). Here, to resolve Mr. Swanson s DATWA claim, this Court need only examine the specific DATWA provisions and the NBA s conduct and testing requirements to determine whether the NBA complied with the Act s standards. Similar to the statutory provision in Karnes, 335 F.3d at , DATWA requires a confirmatory re-test, and the NBA has not administered a re-test. Such an examination of DATWA and the NBA s conduct is purely factual and does not implicate the CBA. As in Hawaiian Airlines, Inc., 512 U.S. at 266, this factual assessment neither requires any reference to the CBA nor any interpretation of the Policy. Thus, because Mr. Swanson s DATWA claim is predicated on Minnesota law and is unlinked to both the CBA and the Policy, the claim is not dependent upon an interpretation of the CBA and should not be subject to the section 301 preemption doctrine. Nevertheless, the NBA contends that Mr. Swanson s DATWA claim is preempted because it mandates reference to, and an analysis of, the CBA. The NBA argues that DATWA authorizes parties to a collective bargaining agreement to bargain[] and agree[] to a drug testing policy as long as that policy meets or exceeds, and does not otherwise conflict with DATWA s minimum standards. Minn. Stat subdiv. 1. However, the NBA s argument misses the mark because DATWA intended to achieve a heightened level of protection for Minnesota employees, including those subject to a CBA. Id. As the court of appeals explained, DATWA does not state that an employee who is a party to such a [CBA] cannot bring a claim under DATWA. Rather, where there is a [CBA] that is at least as protective of employees as DATWA, the number of possible claims an employee has against his or her employer will be affected. R. at 16. As the court of appeals found, because the NBA does not 14

21 cite any specific provisions of either the CBA or the Policy that must be interpreted in order to establish its claim[,] the court would have no need to consult the Policy in order to resolve [Mr.] Swanson s DATWA claim. Id. at 17. Thus, this Court need only compare the drug testing procedures followed by the NBA with DATWA requirements. This Court should, at most, reference certain provisions of the CBA for mere consultation. See Livadas, 512 U.S. at ; see also Trs. of the Twin City Bricklayers Fringe Benefit Funds, 450 F.3d at 330. Substantial interpretation is not required, and this factual evaluation should not compel preemption under section 301. B. Despite the NBA s Interest in Uniformity, the CBA Does Not Supersede or Replace DATWA Provisions Because Nonnegotiable Rights Cannot Be Preempted. Despite the NBA s interest in uniformity, the CBA does not supersede or replace DATWA provisions because nonnegotiable rights cannot be preempted. Although state contract law must yield to the developing federal common law to avoid potentially inconsistent interpretations in different states, Lueck and [] Lingle... underscore[] the point that 301 cannot be read broadly to pre-empt nonnegotiable rights conferred on individual employees as a matter of state law[.] Livadas, 512 U.S. at (internal citations omitted). This Court has explained that there is no suggestion that Congress, in adopting 301, wished to give the substantive provisions of private agreements the force of federal law, ousting any inconsistent state regulation. Lueck, 471 U.S. at Therefore, extending the pre-emptive effect of would be inconsistent with congressional intent under [section 301] to preempt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract. Id. at 212. To arrive at this determination, this Court reasoned that [s]uch a rule of law would 15

22 delegate to unions and unionized employers the power to exempt themselves from whatever state labor standards they disfavored. Id. In furtherance of this settled rule, this Court has explained that [c]learly, 301 does not grant the parties to a [CBA] the ability to contract for what is illegal under state law. Id. In Cramer, the Court of Appeals for the Ninth Circuit followed this precedent. 255 F.3d at 697. There, an employer, a large trucking company, argue[d] that the terms of CBAs affecting employees in multiple states should supersede inconsistent state laws. Id. at 695 n.9. However, the Ninth Circuit explained that [t]his contention overreaches... because [section 301] certainly did not give employers and unions the power to displace any state regulatory law they found inconvenient. Id.; see also Karnes, 335 F.3d at 1194 (finding that the fact that the CBA incorporated Boeing s anti-drug policy is irrelevant because 301 does not grant the parties to a [CBA] the ability to contract for what is illegal under state law ) (internal quotation marks omitted). Thus, an employer s interest in uniformity does not preempt state law rights that provide independent substantive protections for state citizens. Here, DATWA provisions direct Minnesota employers to meet specific requirements when drug testing policies are administered. R. at 7. DATWA expressly provides Minnesota citizens with fundamental, nonnegotiable rights and identifies specific employer conduct as illegal. Id. These minimum standards cannot be preempted because they are relied upon by both employees and employers. Id. As explained in Cramer, section 301 does not allow parties to a CBA to supplant any inconvenient statutory provisions or regulations. 255 F.3d at 695 n.9. Although enforcing DATWA provisions may inconvenience the NBA and compel its adherence to different state laws and regulations in different states, section 301 cannot preempt nonnegotiable state rights. 16

23 Despite this, the NBA references several policy reasons to explain the importance of maintaining and strengthening a uniform drug testing policy. The NBA argues that uniformity ensures fair competition and athletic integrity. R. at 9. The NBA alleges that, without uniformity, it would be impractical and inequitable for players in different states to follow different drug testing rules because the application of state law... might lead to inconsistent results since there could be as many state-law principles as there are States[.] Lingle, 486 U.S. at 406. However, the NBA s uniformity argument is inapposite because, as this Court explained in Lueck, Congress intended for paries to freely bargain only within the basic constraints of state law. 471 U.S. at 212. Section 301 does not grant parties to a CBA permission to contract for what would otherwise be illegal under applicable state law. Id. The NBA s proposed policy argument favoring uniformity is not only unfaithful to this Court s precedent, but also unjust to both states and its employees who rely on the rights created by states. Accordingly, the NBA s national uniformity argument fails, and Mr. Swanson s DATWA claim should not be preempted by section 301. II. THE COURT OF APPEALS CORRECTLY VACATED THE ARBITRATION RULING BECAUSE THE ARBITRATION AWARD CONDONES A BREACH OF FIDUCIARY DUTY THAT IS CONTRARY TO PUBLIC POLICY. The arbitration award upholding Mr. Swanson and the other three players suspensions should remain vacated because the award sanctioned a breach of fiduciary duty that is contrary to public policy. The court of appeals correctly held that: (A) the NBA, its doctors, and Mr. Haverford owed the players a duty to inform concerning their specific MegaChill findings; (B) the NBA, its doctors, and Mr. Haverford breached this duty by willfully not informing the players of their findings; and (C) upholding the players suspensions would endorse this breach of fiduciary duty, thereby violating explicit and well-defined public policy under New York law. 17

24 A. The NBA, its Doctors, and Mr. Haverford Owed a Duty to the Players to Inform Them of Their Findings Concerning MegaChill Because the Players Reasonably Placed Their Confidence in the NBA, its Doctors, and Mr. Haverford. The NBA, its doctors, and Mr. Haverford owed the players a duty to inform them of the negative effects of MegaChill. A fiduciary duty is recognized under New York law in any situation where there is a duty to act or give advice that is within the scope of the two parties relationship and in any such instance where confidence is reposed. Lumbermens Mut. Cas. Co. v. Franey Muha Alliant Ins. Servs., 388 F. Supp. 2d 292, 305 (S.D.N.Y. 2005). Confidence is reposed when one party reasonably relied on the other s superior expertise or knowledge. Id. Determining whether confidence is reposed is a fact specific inquiry. Id. The Lumbermens Mutual Causality Co. litigation laid the foundation for the analysis concerning whether a fiduciary duty is owed. Id. Although the final determination is unique to the facts of each case, a fiduciary duty is not required to be formalized in writing. United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F. Supp. 2d 198, 218 (S.D.N.Y. 2002). Fiduciary duties have been found to exist in cases where there is no legal relationship between the parties, and the relationship is based solely on the bond of confidence between the parties. See Callahan v. Callahan, 514 N.Y.S.2d 819, (N.Y. App. Div. 1987) (finding that an attorney breached a fiduciary duty to a party despite the attorney not representing that party as a client because there was a bond of trust between the two parties). Here, the facts demonstrate that the NBA, its doctors, and Mr. Haverford had a duty to act or give advice within the scope of their relationship with the players. The Policy itself is designed for the purpose of protecting player health. R. at 19. Dr. Traeger, as the Independent Administrator of the NBA s Policy, is responsible for educating the players regarding the implementation of the Policy. Id. at 4. The NBA also sets itself out as an expert, supplying a 18

25 hotline to allow players to anonymously query the League for information regarding banned substances in supplements. Id. at 7. Because of these provisions, the players place their confidence in the NBA, its doctors, and Mr. Haverford to educate them with their expertise and specialized knowledge of toxicology to keep the players away from harm and to avoid positive drug tests. This trust is reasonable because it both protects the players by providing a safe harbor to field questions and protects the League by preventing unsafe work environments. In ruling that the NBA, its doctors, and Mr. Haverford owed no duty to the players, the district court relied on the decision in Walton-Floyd v. United States Olympic Committee, 965 S.W.2d 35, 40 (Tex. Ct. App. 1998). R. at 11. However, this foundation was misplaced because that litigation dealt with damages under a tort claim based on Texas state law, and there is no similar precedent under New York law. See Walton-Floyd, 965 S.W.2d at 40 (finding that no cause of action for breach of fiduciary duty existed under Texas state tort law). Because the NBA players have reasonably placed their confidence in the NBA, its doctors, and Mr. Haverford to educate them on findings regarding banned substances, the NBA owed a duty to the players to inform them of the specific findings regarding MegaChill. B. The NBA, its Doctors, and Mr. Haverford Breached Their Duty By Willfully Not Informing the Players of the Specific Findings Regarding MegaChill Because They Were Privy to Superior Knowledge and This Conduct Violated an Ongoing Relationship of Trust. Under New York law, an established fiduciary duty is breached in any situation where confidence that is reposed is subsequently betrayed. Lumbermens Mut. Cas. Co., 388 F. Supp. 2d at 305. Additionally, an affirmative duty arises for a party to disclose pertinent information in situations where one party is privy to superior knowledge not available to the other. Callahan, 514 N.Y.S.2d at 821 (upholding a breach of fiduciary duty when one party stands in a position of obvious superior knowledge and fails to disclose pertinent information to the other party). In 19

26 instances in which there is a plausible ongoing relationship of trust, any factual dispute over whether the confidence was betrayed should proceed to trial to resolve the issue of the breach. Lumbermens Mut. Cas. Co., 388 F. Supp 2d at 305. Determining whether confidence is betrayed is a fact specific inquiry. Id. at 306. Here, the facts support the court of appeals judgment. Dr. Traeger was aware that MegaChill contained a specific banned substance. R. at 4. Dr. Traeger subsequently informed the NBA and Mr. Haverford that MegaChill contained a specific banned substance. Id. Although the NBA, its doctors, and Mr. Haverford had an ongoing relationship of trust with the players to reasonably disclose knowledge of banned substances, they willfully obfuscated their findings by refusing to notify the FDA, by only indicating that Super Chill Goods Corporation was a banned company, and by publishing a generic advisory to the players against taking sleep aids. Id. The NBPA, working on this generalized information, only warned players not to endorse any products made by Super Chill Goods Corporation. Id. Stated simply, no party with knowledge of desmopressin, the banned substance in MegaChill, properly notified the players of the finding. As such, the NBA, its doctors, and Mr. Haverford chose to betray the confidence of the players, a confidence that the players reasonably placed in the administrators for educational purposes under the Policy. As in Lumbermens Mutual Causality Co., the question of breach should, at a minimum, move beyond summary judgment to have the facts surrounding the breach resolved at trial. 388 F. Supp 2d at 305. Even if no explicit fiduciary relationship existed, the NBA, its doctors, and Mr. Haverford were privy to superior knowledge, that MegaChill contained desmopressin, which was unavailable to the players. This knowledge was pertinent to the players and was within the scope of their employment relationship with the NBA. As in Callahan, 514 N.Y.S.2d at , this 20

27 position of superior knowledge created a duty to inform the players of the specific findings regarding MegaChill. The NBA, its doctors, and Mr. Haverford breached this duty by issuing only veiled warnings and vague guidelines. Therefore, the court of appeals decision should be upheld. C. This Breach of Fiduciary Duty Violated Explicit and Well-Defined Public Policies Under New York Law Because the Conduct of the NBA, its Doctors, and Mr. Haverford Violated Public Health and Safety Concerns. The arbitration ruling should remain vacated because it violated public policy. This Court has held that the power of courts to overturn arbitration rulings is narrow; however, a court is required to overturn an arbitration ruling that runs contrary to public policy. W.R. Grace & Co. v. Local Union 759, Int l Union of the United Rubber, 461 U.S. 757, 766 (1983). The public policy at issue must be explicit and well-defined. Id. Whether a public policy is explicit and well-defined is ascertained through the laws and legal precedent concerning the public policy. Id. Legal precedent shows that although individual health concerns are not sufficient public policy reasons to overturn an arbitration decision, a breach of duty that threatens the health and well-being of the larger public and occurs within the scope of employment is sufficiently contrary to public policy to reverse an arbitration ruling. Compare United Paperworkers Int l Union v. Misco, Inc., 484 U.S. 29, 44 (1987) (determining that the link between a party s personal illicit drug usage and workplace performance was too tenuous to overturn an arbitration decision on the basis of public policy), with Delta Air Lines, Inc. v. Air Line Pilots Ass n, Int l, 861 F.2d 665, 671, 674 (11th Cir. 1988) (finding that a licensed pilot flying an aircraft while intoxicated is so dangerous to passengers, crew, and the public that it clearly violates public policy), and Iowa Electric Light & Power Co. v. Local Union 204 of the Int l Bhd. of Elec. 21

28 Workers, 834 F.2d 1424, (8th Cir. 1987) (determining that a nuclear power plant worker who deliberately neglected federal nuclear safety regulations violated public policy because of the resulting public endangerment). Public policy also dictates that a knowledgeable party must disclose information when the uninformed party is legitimately entitled to the information within the scope of the relationship. Callahan, 514 N.Y.S.2d at Finally, when two parties are placed in a position of trust, that trust must be protected. See Lumbermens Mut. Cas. Co., 388 F. Supp. 2d at (finding that an ongoing relationship of trust based on contractual obligations may give rise to a fiduciary duty). Here, the NBA, its doctors, and Mr. Haverford violated public policies confirmed by law and legal precedent because the breach threatened public well-being and occurred within the scope of an employment relationship. Although the health consequences of ingesting desmopressin are unclear, the result of refusing to openly disclose specific findings of a dangerous banned substance may result in endangering the public at large, including both professional and youth athletes alike. Mr. Swanson and the other NBA players are public figures and serve as role models for young athletes. These young athletes may attempt to emulate their basketball heroes and use dangerous banned substances to help them gain the physical ability to play in the NBA. As in W.R. Grace & Co., this public policy is explicit and well-defined. 461 U.S. at 766. To prevent such a threat to public health and safety, public policy considerations require that parties are trustworthy and provide reasonable disclosure within the scope of an employment relationship. Callahan, 514 N.Y.S.2d at The arbitration ruling also shields leagues from disclosing their knowledge of dangerous substances in supplements. Upholding the arbitration award encourages unscrupulous employers to avoid the minimal costs and effort of disclosing specific information within their possession. 22

29 The NBA shifts the entire weight of maintaining health and well-being onto employees whose contract imposes strict liability for consuming banned substances. This refusal to disclose pertinent information, and its inherent burden shifting, is disallowed by public policy. Id. Finally, Mr. Swanson and the other players have trust and faith in the doctors employed by the NBA, as well as in the NBA itself, to inform them of substances that may be harmful to their health. A breach of this trust may result in athletes inability to trust their employers to provide them with full disclosure regarding harmful substances in health supplements, leading to employee uncertainty and diminished training ability. Such a breach of trust, as shown in Lumbermens Mutual Causality Co., is grounds for a breach of fiduciary duty on the basis of public policy and requires the litigation to move beyond summary judgment. 388 F. Supp. 2d at The district court, in upholding the arbitrator s ruling, began its analysis of the public policy violation by scrutinizing the arbitration award through the Federal Arbitration Act (FAA). R. at 10. However, this starting point of analysis is incorrect. The FAA does not govern labor cases, but only informs the search for the federal common law. MidAm. Energy Co. v. Int l Bhd. of Elec. Workers Local 499, 345 F.3d 616, 622 (8th Cir. 2003). A court s refusal to uphold an arbitration ruling on the basis of public policy is rooted in common law, and this public policy exception is well-established. United Paperworkers Int l Union, 484 U.S. at 42-45; see also MidAm. Energy Co., 345 F.3d at 620 ( The Supreme Court has repeatedly reaffirmed the existence of a public policy exception. ). The district court also determined that the arbitration award could only violate public policy if the Policy itself violated public policy. R. at 10. Again, the district court erred in its reasoning. Under New York law, a violation of a fiduciary duty is based upon a party s duty to act within the scope of the relationship. Lumbermens Mut. 23