Opinion
3:23-cv-02330-BEN-DEB
08-01-2024
MARK RIVAS, individually and on behalf of other grieved employees pursuant to the California Private Attorneys General Act, Plaintiff, v. SOLV ENERGY, LLC, a Delaware limited liability company; and DOES 1 through 100, inclusive, Defendants.
ORDER DENYING PLAINTIFF'S MOTION TO REMAND [ECF No. 12]
Hon. Roger T. Benitez United States District Judge
On October 17, 2023, Plaintiff Mark Rivas (“Plaintiff”) filed this action in the Superior Court of California, County of San Diego against Solv Energy, LLC (“Defendant”) and one hundred “Doe” Defendants alleging one cause of action under California's Private Attorney General Act of 2004 (“PAGA”). ECF 1-5 (“Compl.”). On December 21, 2023, Defendant removed the action to this Court. ECF 1, Notice of Removal (“NOR”). Before the Court is Plaintiff's motion to remand. ECF 8-1 (“Mot.) Defendant filed an opposition, ECF 9 (“Oppo.”), and Plaintiff filed a reply, ECF 10 (“Reply”).
The motion was submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1) and Rule 78(b) of the Federal Rules of Civil Procedure. ECF No. 11. After considering the applicable law and the parties' arguments, the Court DENIES Plaintiff's motion to remand.
I. LEGAL STANDARDS
A defendant in state court may remove a civil action to federal court so long as that case could originally have been filed in federal court. 28 U.S.C. § 1441(1); City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 163 (1997). Removal of a state action may be based on either diversity or federal question jurisdiction. Id. at 163; Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Whether or not the Court has federal question jurisdiction is governed by the “well-pleaded complaint rule,” which states that “federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.” Caterpillar, 482 U.S. at 392. “The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.” Id. The removal statutes are strictly construed, and removal jurisdiction is to be rejected in favor of remand if there are doubts as to the right of removal. Nev. v. Bank of Am. Corp., 672 F.3d 661, 667 (9th Cir. 2012).
The Supreme Court has held that “if the resolution of a state-law claim depends on the meaning of a collective-bargaining agreement,” then the “state law is pre-empted and federal labor-law principles” must decide the matter. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 405-406 (1988). State law claims that can be resolved independently of a collective bargaining agreement are not preempted. Id. at 407.
II. DISCUSSION
Plaintiff was employed by Defendant as a General Laborer, ECF 1-2 (“Grubb Decl.”) ¶ 5, from November 21, 2022, through May 2, 2023. Id. at ¶ 3; Compl. at ¶ 20. Plaintiff alleges that during his employment, Defendant failed to comply with various California labor laws regarding wage payment, overtime pay, meal and rest periods, and payroll record keeping.Compl. ¶¶ 19-48; Mot. at 8. Plaintiff further alleges that Defendant's removal was improper because there is a lack of subject matter jurisdiction. Mot. at 7. Plaintiff argues that his allegations are all based on violations of California labor regulations, and not violations of his collective bargaining agreement (“CBA”) rights. Id. Defendant argues that Plaintiff's PAGA claim is preempted by section 301 of the Labor Management Relations Act (“LMRA”), which gives the Court federal question jurisdiction. NOR at 3; Oppo. at 9. Defendant argues that certain employees, such as Plaintiff, who work under a valid CBA, are exempt from the PAGA statute if the CBA complies with the statutory requirements. NOR at 3; Oppo. at 9. Plaintiff responds by arguing that the CBA does not meet the statutory requirements for the exemption. Mot. at 12; Reply at 9-10.
Plaintiff alleges one cause of action under California's Private Attorney General Act. (Cal. Lab. Code § 2698, et seq.) which is predicated on nine labor code violations: (1) failure to pay overtime, in violation of California Labor Code §§ 510 and 1198; (2) failure to provide meal periods in violation of California Labor Code §§ 226.7 and 512(a); (3) failure to provide rest periods in violation of California Labor Code § 226.7; (4) failure to pay minimum wage in violation of California Labor Codes §§ 1194, 1197, and 1197.1; (5) failure to pay timely wages upon termination in violation of California Labor Code §§ 201 and 202; (6) failure to pay timely wages during employment in violation of California Labor Code § 204; (7) failure to provide complete and accurate wage statements in violation of California Labor Code § 226(a); (8) failure to keep accurate payroll records in violation of California Labore Code § 1174(d); and (9) failure to reimburse business-related expenses and costs in violation of California Labor Code §§ 2800 and 2802. Compl. ¶¶ 49-61.
Unless otherwise stated, page citation will refer to the ECF document, and not the parties's document. Here page eight of ECF 8-1 but page two of Plaintiff's document.
The Supreme Court has held that “a suit in state court alleging a violation of a provision of a labor contract must be brought under § 301 and be resolved by reference to federal law.” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210 (1985). If there is a CBA with a valid statutory exemption, then Plaintiff's claims would not arise out of state labor law rights but rather from the CBA, which would require the claims to be brought under section 301 of the LMRA. If on the other hand, the CBA does not qualify for the statutory exemption, then Plaintiff's claims would arise out of state labor law rights, would not be preempted by the LMRA, and would require the Court to remand. The central question here is whether the CBA meets all the statutory requirements to be exempt from the PAGA statute.
With regards to PAGA claims and construction industry employees, California Labor Code section 2699.6(a) provides:
This part shall not apply to an employee in the construction industry with respect to work performed under a valid collective bargaining agreement in effect any time before January 1, 2025, that expressly provides for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for the employee to receive a regular hourly pay rate of not less than 30 percent more than the state minimum wage rate, and the agreement does all of the following:
(1) Prohibits all of the violations of this code that would be redressable pursuant to this part, and provides for a grievance and binding arbitration procedure to redress those violations.
(2) Expressly waives the requirements of this part in clear and unambiguous terms.
(3) Authorizes the arbitrator to award any and all remedies otherwise available under this code, provided that nothing in this section authorizes the award of penalties under this part that would be payable to the Labor and Workforce Development Agency.Cal. Lab. Code § 2699.6(a)(1-3). Here, it is uncontested that Plaintiff was a construction industry employee whose employment was governed by a CBA. Grubb Decl. ¶ 5; NOR at 5; Oppo. at 9, 15. The parties agree the CBA complied with statutory requirements, except for one. See NOR at 8-9, 15; Mot. at 12; Oppo. at 15. The parties disagree whether the CBA provides “premium wage rates for all overtime hours worked.” Cal. Lab. Code § 2699.6(a)(emphasis added); see NOR at 9; Mot. at 12; Oppo. at 15. The relevant CBA provision governing overtime hours and pay states:
Section 20A Overtime Rates, Hours, and Working Conditions 1. Work Day
Eight (8) consecutive hours (exclusive of meal period), shall constitute a day's work for straight time rates unless the job or project is on a four-ten (4 x 10) hour day work week in which case the workday shall be ten (10) consecutive hours (exclusive of meal period) at straight time rates. (If all basic Crafts employed by the Individual Employer on the job site and/or contract, are employed on the basis of a four-ten (4 x 10) hour day work week, the Laborers' shall work on the same basis.)ECF 1-3, Ex. A at 27 (the CBA). Plaintiff argues that because the CBA includes a ten-hour workday, four days per week, at straight pay, then the CBA fails to provide premium pay for all overtime hours worked as required by the labor code. Mot. at 12. Defendants argue that California Labor Code sections 510 and 514 provide an exemption for alternate workweek schedules operating under a CBA. Oppo. at 16. Section 510 defines the standard overtime definition applying overtime rates for “[a]ny work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweeks” Cal. Lab. Code § 510(a). But the statutory language provides exceptions to the definition, specifically subsection (2) which states: “An alternative workweek schedule adopted pursuant to a collective bargaining agreement pursuant to Section 514.” Cal. Lab. Code § 510(a)(2). Section 514 of the labor code states the following:
Sections 510 and 511 do not apply to an employee covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of the employees, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.Cal. Lab. Code § 514. Defendant further argues that California law allows a CBA to have alternative terms and requirements for overtime. Oppo at 17, (citing Curtis v. Irwin Industries, Inc., 913 F.3d 1146 (2019)). In Curtis, Plaintiff made almost identical arguments that his CBA did not meet the statutory requirements for overtime under California Labor Code section 510. The court rejected this interpretation finding that:
While section 510 establishes a default definition of overtime applicable to non-unionized employees, unionized employees have sought and received alternative wage protections through the collective bargaining process. Thus, the California legislature deemed it appropriate to allow unionized employees to contract around section 510(a) 's requirements by bargaining over not only the rate of overtime pay, but also when overtime pay will begin.Curtis, 913 F.3d at 1154-55 (internal citations and quotations omitted, cleaned up). California courts have interpreted these sections of the Labor Code to mean that employees and employers are free to negotiate overtime terms in the CBA. See Vranish v. Exxon Mobil Corp., 223 Cal.App.4th 103, 111 (2014).
Plaintiff challenges the applicability of Curits and Vranish in his motion but does not provide any alternative controlling state court caselaw.
Based on this controlling authority, the Court finds that the CBA here meets the statutory requirements for a valid PAGA exemption. Because Plaintiff's employment was exempt from PAGA claims, his claim would instead arise from rights under the CBA. The Supreme Court has held that “a suit in state court alleging a violation of a provision of a labor contract must be brought under § 301 [of the LMRA] and be resolved by reference to federal law.” Allis-Chalmers, 471 U.S. at 210. Section 301 of the LMRA states:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce... may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.29. U.S.C. § 185(a). In Burnside v. Kiewitt Pac. Corp., the Ninth Circuit established a two-part test to determine whether a state law claim is preempted by section 301 of the LMRA. 491 F.3d 1053, 1059 (2007). Because Plaintiff's claims arise from CBA rights, they are preempted under the first prong of the Burnside test and there is no need to proceed to the second.
In sum, the Court finds Plaintiff's claims arise out of a valid CBA which enjoys statutory exemption from PAGA claims. This in turn means Plaintiff's claims arise out of the CBA and his state labor law claims are preempted by section 301 of the LMRA, giving this Court jurisdiction.
III. CONCLUSION
For the foregoing reasons, the Court DENIES Plaintiff's motion to remand.
IT IS SO ORDERED.