Allmaras v. University Mechanical & Engineering Contractors, Inc.

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8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

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11 BROCK ALLMARAS, on behalf of Case No.: 24-CV-01581-GPC-SBC

others similarly situated,

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ORDER GRANTING MOTION TO

Plaintiff,

13 DISMISS

v.

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[ECF No. 4]

UNIVERSITY MECHANICAL &

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ENGINEERING CONTRACTORS, INC.,

16 and DOES 1 through 50, inclusive,

17 Defendants.

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19 Before the Court is Defendant’s motion to dismiss, which was filed on September

20 11, 2024. ECF No. 4. Plaintiff opposed the motion, ECF No. 7, and Defendant filed a

21 reply, ECF No. 8. For the reasons below, the Court GRANTS Defendant’s motion to

22 dismiss.

23 BACKGROUND

24 I. Procedural Background

25 On August 2, 2024, Plaintiff Brock Allmaras filed a complaint against University

26 Mechanical & Engineering Contractors, Inc. on behalf of himself and “[a]ll current and

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1 former non-exempt employees who worked for Defendants in California at any time from

2 four years . . . prior to the filing of this action through date of class certification.” ECF

3 No. 1-2 (“Compl.”) ¶ 20. On September 5, 2024, Defendant removed this case from state

4 court, claiming that there was federal question jurisdiction under § 301 of the Labor

5 Management Relations Act (“LMRA”). ECF No. 1. Defendant timely moved to dismiss

6 the complaint in its entirety, ECF No. 4, and the motion has now been fully briefed, see

7 ECF Nos. 7, 8.

8 II. Factual Background

9 Defendant employed Plaintiff as an Apprentice Plumber from approximately July

10 2023 to April 2024. Compl. ¶ 14. Plaintiff and the putative class members were

11 compensated by Defendant on an hourly basis. Compl. ¶ 24. Plaintiff, the putative class

12 members, and Defendant are all parties to a collective bargaining agreement, which was

13 most recently revised on July 1, 2017. ECF No. 1-3 at 2; see id. at 34-101.

14 Plaintiff’s various claims hinge on the general allegation that Defendant required

15 “Plaintiff and the class members to complete work while off-the-clock, without

16 compensation.” Compl. ¶ 25. Plaintiff was allegedly expected to arrive to work 30

17 minutes early and begin working, and Defendant allegedly prohibited Plaintiff from

18 logging this time on his timecard. Compl. ¶ 26. Further, Plaintiff was allegedly expected

19 to respond to messages and phone calls regarding work-related matters while off-the-

20 clock and was not allowed to log this time on this timecard, either. Compl. ¶ 27.

21 Plaintiff also allegedly “routinely experienced missed, late, short, and interrupted meal

22 periods due to pressure from Defendants to get their projects completed as soon as

23 possible,” Compl. ¶ 31, and due to pressure to work through his rest periods, Compl. ¶

24 32. Plaintiff allegedly incurred work-related costs without reimbursement, Compl. ¶ 38,

25 such as “expenses incurred from cell phone usage required for the job or from obtaining

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1 tools that were required for the job,” Compl. ¶ 40. Plaintiff further alleges that he

2 “requested copies of his timecards,” which have not been provided. Compl. ¶ 43.

3 Based on these allegations, Plaintiff asserts the following California state law wage

4 and hour claims on behalf of himself and the putative class members: (1) failure to pay all

5 minimum wages (Cal. Lab. Code §§ 1194, 1194.2, 1197); (2) failure to pay overtime

6 wages (id. §§ 510, 1194); (3) meal period violations (id. §§ 226.7, 512); (4) rest period

7 violations (id. §§ 226.7, 516); (5) failure to pay all paid sick leave wages (id. §§ 200, 218,

8 246 et seq.); (6) untimely payment of wages (id. §§ 204, 210, 218); (7) wage statement

9 violations (id. § 226); (8) waiting time penalties (id. §§ 201 et seq.); (9) failure to

10 reimburse business expenses (id. § 2802); (10) failure to provide records (id. §§ 226, 432,

11 1198.5); (11) violation of California’s Unfair Competition Law (“UCL”) (Cal. Bus. &

12 Prof. Code § 17200 et seq.). Compl. ¶¶ 46-98.

13 LEGAL STANDARDS

14 Federal Rule of Civil Procedure (“Rule”) 12(b)(6) permits dismissal for “failure to

15 state a claim upon which relief can be granted.” Dismissal under Rule 12(b)(6) is

16 appropriate where the complaint lacks a cognizable legal theory or sufficient facts to

17 support a cognizable legal theory. See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696,

18 699 (9th Cir. 1990).

19 A complaint may survive a motion to dismiss only if, taking all well pleaded

20 factual allegations as true, it contains enough facts to “state a claim to relief that is

21 plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly,

22 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual

23 content that allows the court to draw the reasonable inference that the defendant is liable

24 for the misconduct alleged.” Id. “Threadbare recitals of the elements of a cause of

25 action, supported by mere conclusory statements, do not suffice.” Id. In reviewing a

26 Rule 12(b)(6) motion, the Court accepts all facts alleged in the complaint as true and

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1 draws all reasonable inferences in favor of the plaintiff. Al-Kidd v. Ashcroft, 580 F.3d

2 949, 956 (9th Cir. 2009).

3 REQUEST FOR JUDICIAL NOTICE

4 When ruling on a Rule 12(b)(6) motion to dismiss, a district court may “consider

5 certain materials—documents attached to the complaint, documents incorporated by

6 reference in the complaint, or matters of judicial notice—without converting the motion

7 to dismiss into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903,

8 908 (9th Cir. 2003).

9 Defendant requests judicial notice of the collective bargaining agreement, which is

10 attached to its notice of removal as Exhibit B to the Declaration of Douglas Kanaan In

11 Support of Defendant’s Notice of Removal. See ECF No. 1-3 at 33-101. Plaintiff does

12 not oppose this request. Courts routinely take judicial notice of CBAs at the motion to

13 dismiss phase, especially when reference to the CBA is required to resolve issues of

14 preemption. See, e.g., Hall v. Live Nation Worldwide, Inc., 146 F. Supp. 3d 1187, 1193

15 (C.D. Cal. 2015) (taking judicial notice of CBA that formed the basis for defendant’s

16 argument that certain claims were preempted by the LMRA); see also Lujano v.

17 Piedmont Airlines, Inc., --- F. Supp. 3d ----, 2024 WL 2873627, at *3 (C.D. Cal. May 16,

18 2024) (“the court takes judicial notice of the CBA because courts regularly take judicial

19 notice of collective bargaining agreements on a motion to dismiss when the documents

20 are not subject to reasonable dispute,” and because “Plaintiff neither opposes Defendant’s

21 request nor disputes the validity of the CBA”). Accordingly, Defendant’s request for

22 judicial notice of the CBA is GRANTED, and the Court will consider the CBA in

23 deciding the motion to dismiss.

24 DISCUSSION

25 Defendant advances several arguments in support of its motion to dismiss. First,

26 Defendant argues that all of Plaintiff’s claims, except Count Ten, are preempted under

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1 LMRA § 301 pursuant to the two-step analysis detailed in Burnside v. Kiewit Pacific

2 Corporation, 491 F.3d 1053 (9th Cir. 2007). ECF No. 4-1 at 12-24. Then, Plaintiff

3 argues that any remaining claims which are not preempted under § 301 should be

4 dismissed because they are subject to the CBA’s grievance and arbitration provisions. Id.

5 at 25-33.

6 Plaintiff’s opposition proceeds in two parts. First, Plaintiff disputes whether any of

7 his claims are preempted under § 301. ECF No. 7 at 7-21. Second, Plaintiff argues that

8 Defendant’s attempt to compel arbitration should be denied because the CBA’s

9 arbitration provisions are unconscionable. ECF No. 7 at 21-27.1

10 The Court will address the parties’ arguments in turn.

11 I. Section 301 Preemption

12 Defendant first argues that Plaintiff’s claims, except Count Ten, are preempted

13 under LMRA § 301. Section 301(1) provides federal jurisdiction over “[s]uits for

14 violation of contracts between an employer and a labor organization.” 29 U.S.C. §

15 185(a). “The preemptive force of section 301 is so powerful as to displace entirely any

16 state claim based on a collective bargaining agreement, and any state claim whose

17 outcome depends on analysis of the terms of the agreement.” Young v. Anthony’s Fish

18 Grottos, Inc., 830 F.2d 993, 997 (9th Cir. 1987).

19 The Ninth Circuit has applied a two-step test to determine whether a claim is

20 preempted by § 301. Mellon v. Universal City Studios, LLC, 625 F. Supp. 3d 1007, 1013

21 (C.D. Cal. 2022). First, the court asks “whether a particular right inheres in state law or,

22 instead, is grounded in a CBA.” Burnside, 491 F.3d at 1060. “If the claim is founded

23 directly on rights created by a CBA, preemption is warranted.” Mellon, 625 F. Supp. 3d

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26 1 Plaintiff does not dispute whether the claims are subject to arbitration under the CBA’s

terms. He only seeks to attack the validity of the arbitration provisions.

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1 at 1013 (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 394 (1987)). Second, the court

2 asks “whether a state law right is ‘substantially dependent’ on the terms of a CBA.”

3 Burnside, 491 F.3d at 1060 (citing Caterpillar, 482 U.S. at 394). The key question here

4 is “whether the claim can be resolved by ‘looking to’ versus interpreting the CBA.”

5 Burnside, 491 F.3d at 1060 (internal citations omitted). If the former, the claim is not

6 preempted; if the latter, the claim is preempted. Id.

7 A. Count Two: Overtime Wages

8 California Labor Code § 510 entitles employees to overtime pay. Meanwhile,

9 Labor Code section 514 provides that:

10 Sections 510 and 511 do not apply to an employee covered by a

11 valid collective bargaining agreement if the agreement expressly

12 provides for the wages, hours of work, and working conditions

13 of the employees, and if the agreement provides premium wage

14 rates for all overtime hours worked and a regular hourly rate of

15 pay for those employees of not less than 30 percent more than

16 the state minimum wage.

17 Defendants argue that Plaintiff’s overtime wages claim is covered by the Labor Code

18 section 514 exemption and is thus preempted under step one of the Burnside analysis.

19 ECF No. 4-1 at 14. If Defendants are correct, the right to overtime only exists under the

20 CBA and the claim is therefore preempted under § 301. Id. Plaintiff responds that the

21 CBA’s terms do not meet section 514’s requirements, and thus the claim is not

22 preempted. ECF No. 7 at 6-7.

23 Plaintiff does not dispute that the CBA provides for the wages, hours, and working

24 conditions of the employees, ECF 1-3 at 39-43, 63-64, as well as premium wage rates for

25 overtime hours, id. at 41. What the parties do disagree on is whether the CBA provides a

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1 regular hourly rate of pay for employees “of not less than 30 percent more than the state

2 minimum wage.” See ECF No. 4-1 at 15; ECF No. 7 at 12-13.

3 Defendant admits that the pre-apprentice classification earned less than 130% of

4 the state minimum wage. ECF No. 1-3 at 4. But only 26 of the 288 UMEC employees

5 covered by the CBA were ever in the pre-apprentice classification during the relevant

6 period. Id. So, the vast majority of employees covered by the CBA—262 out of 288—

7 earned more than 130% of the state minimum wage throughout the relevant period. Id.

8 Defendants contend that this is sufficient to meet section 514’s requirements. See ECF

9 No. 4-1 at 15. But Plaintiffs argue that the CBA must “provide[] for the enhanced regular

10 rate of pay for all covered employees,” not just some of them. ECF No. 7 at 13. The

11 resulting question is who does “those employees” refer to? Is it just the Plaintiff? Or is it

12 all the employees covered by the CBA? To determine the answer, the Court must

13 interpret the meaning of the statute.

14 When interpreting the meaning of a statute, “we start where we always do: with the

15 text of the statute.” Bartenwerfer v. Buckley, 598 U.S. 69, 74 (2023). If the text of the

16 statute is unambiguous, the “judicial inquiry is complete.” Babb v. Wilkie, 589 U.S. 399,

17 413 (2020). If the language is ambiguous, the court may consider the legislative history,

18 the maxims of statutory construction, and public policy. Even Zohar Constr. &

19 Remodeling, Inc. v. Bellaire Townhouses, LLC, 61 Cal. 4th 830, 838 (2015).

20 Section 514 provides that California’s overtime provisions “do not apply to an

21 employee” who is covered by a CBA if the CBA meets certain conditions. Cal. Lab.

22 Code § 514 (emphasis added). First, the CBA must “expressly provide [] for the wages,

23 hours of work, and working conditions of the employees.” Id. (emphasis added). And

24 second, the statute provides that the CBA must provide “a regular hourly rate of pay for

25 those employees of not less than 30 percent more than the state minimum wage.” Id.

26 (emphasis added).

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1 The statute references “employee” or “employees” in three phrases: (1) “an

2 employee” to which the statute applies; (2) “the employees” for which the CBA must

3 provide the wages, hours, and working conditions; and (3) “those employees,” which

4 must refer back to either (1) or (2). The difference between “an employee” and “the

5 employees” is clear: “an employee” merely delineates who the exemption applies to and

6 is in singular form, while “the employees” refers to plural “employees” for which the

7 CBA must provide certain conditions. It is logical that “those employees” refers to “the

8 employees” for which the CBA must provide wages, hours of work, and working

9 conditions, as this is the statute’s only other reference to plural “employees.” Further,

10 “those employees” and “the employees” are stated in the context of the statute’s two

11 requirements for the exemption to apply, while “an employee” describes who the statute

12 applies to. Thus, “those employees” who must earn 130% of the state minimum wage are

13 necessarily the same employees for which the CBA must provide the wages, hours, and

14 working conditions.

15 The statute does not qualify “the employees” with any language narrowing who it

16 applies to. And, without limitations, this language refers to all the employees for which

17 the CBA would logically provide the wages, hours, and working conditions; that is, all

18 employees who are covered by the CBA. Accordingly, the Court finds that the language

19 of the statute is unambiguous, and that the CBA must provide the wages, hours, and

20 working conditions of all employees covered by the CBA for section 514’s exemption to

21 apply.

22 While the lower courts are split on this question, the Court finds the cases adopting

23 this interpretation to be more compelling. In Huffman v. Pacific Gateway Concessions

24 LLC, the CBA met the pay requirement for some, but not all, of the employees covered

25 by the CBA. 2019 WL 2563133, at *5 (N.D. Cal. June 21, 2019). The court there also

26 noted the distinction between the singular and plural employee references on its way to

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1 finding that “those employees” referred back to the statute’s earlier use of “the

2 employees.” Id. As a result, the court held that “it was apparent from the statute's plain

3 language that the CBA must satisfy Section 514's requirements with respect to all

4 covered employees in order to render Section 510 inapplicable to any particular

5 employee.” Id. at *6.

6 The court in Sarmiento v. Sealy, Inc. agreed with the Huffman court’s

7 interpretation. 2019 WL 3059932, at *7 (N.D. Cal. July 12, 2019). The court noted the

8 California legislature’s decision to differentiate between a singular “employee” and plural

9 “employees” in the latter clauses. Id. The court also reasoned that the legislature has

10 retained the existing language in the statute, which indicates “an intent to maintain the

11 status quo.” Id. at *8. The court found public policy considerations to support this

12 reading as well. Id. In particular, the court reasoned that the reading allows unionized

13 employees to either bargain around section 510(a) or default to the statute’s language,

14 which is logical considering that the collective bargaining process is encouraged as a

15 matter of public policy. Id. Lastly, the court considered that the California Supreme

16 Court has emphasized that the Labor Code and wage orders should be liberally construed

17 to “favor the protection of employees,” and that exemptions from overtime provisions

18 should be narrowly construed. Id. (citing Troester v. Starbucks Corp., 5 Cal. 5th 829,

19 839 (2018) and Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 794 (1999)). Based on

20 these considerations, the Court concluded that the wage requirement must be “determined

21 by reference to all of the covered employees.” Id.

22 Courts in this District are in accord with this interpretation. See Baltazar v. Ace

23 Parking Mgmt., Inc., 2022 WL 1589297, at *3 (S.D. Cal. Mar. 14, 2022) (“Defendants

24 have failed to demonstrate that the Ace Parking CBA provides a regular hourly pay rate

25 of not less than 30 percent more than the state minimum wage as to all covered

26 employees. Rather, Defendants have only attempted to establish that the CBA provides

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1 that rate of pay as to some of the covered employees. This is insufficient.”) (emphasis

2 added) (internal citations omitted); Cranton v. Grossmont Hosp. Corp., 2022 WL

3 16572028, at *6 (S.D. Cal. Nov. 1, 2022) (“District courts have concluded post-Curtis

4 that a CBA does not meet Section 514’s requirements if it does not meet the requirements

5 with respect to all employees.”) (emphasis in original) (cleaned up).

6 The courts interpreting § 514 differently do so upon public policy considerations

7 rather than the text of the statute. The court in Huerta v. Doubletree Employer LLC

8 articulated its interpretation most thoroughly. 2024 WL 890548, at *3 (C.D. Cal. Mar. 1,

9 2024). There, the court acknowledged that the CBA did not meet the requirement for all

10 aggrieved employees, and that there was a split on this issue in the lower courts. Id. The

11 court reasoned that the legislative intent and public policy considerations behind

12 collective bargaining would be undermined if it held that “simply because the CBA does

13 not fulfill Section 514’s requirements as to some employees, neither Section 504 nor

14 Section 301 would apply to any of the employees.” Id. (emphasis in original). Similarly,

15 the court in Sachs v. Pankow Operating, Inc. reasoned that “the vast majority of

16 employee-categories in the CBA” met the requirement, and the fact that a fraction of

17 those covered did not meet the requirement should not foreclose the application of § 514

18 to other aggrieved employees. 2022 WL 489696, at *6 (C.D. Cal. Feb. 16, 2022). But

19 these courts did not conduct analysis of the plain statutory text. Instead, they presumed

20 that the legislature did not intend for CBAs to evade the exemption merely because they

21 fell just short of meeting § 514’s requirements. But the statute’s clear language precludes

22 this interpretation because it does not indicate that fewer than all covered employees

23 would be sufficient. “If the words themselves are not ambiguous, we presume the

24 Legislature meant what it said.” Sarmiento, 2019 WL 3059932 at *6.

25 Accordingly, based on the Court’s interpretation of § 514, it finds that the CBA

26 here did not meet the requirements for the statute’s overtime exemption. Because the

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1 exemption does not apply, the right to overtime does not “exist[] solely as a result of the

2 CBA,” and the claim is therefore not preempted under step one. Curtis v. Irwin Indus.,

3 Inc., 913 F.3d 1146, 1152 (9th Cir. 2019). Because Defendant does not argue that the

4 claim is preempted under step two, the Court finds that the claim is not preempted under

5 § 301.

6 B. Count One: Minimum Wage

7 i. Step One

8 Defendant contends that, because the claims are “factually conjoined,” Plaintiff’s

9 minimum wage claim is preempted for the same reasons that his overtime claim is

10 preempted. ECF No. 4-1 at 16. Defendant puts forth no other arguments for preemption

11 under the first step. Accordingly, because the Court holds that Plaintiff’s overtime claim

12 are not preempted under step one, neither so is Plaintiff’s minimum wage claim.

13 ii. Step Two

14 Under step two, Defendant argues that the minimum wage claim is preempted

15 because sufficient pay upon arrival at work, which is part of Plaintiff’s claim, Compl. ¶

16 26, is “addressed” in various sections of the CBA. ECF No. 4-1 at 16-17; see ECF No. 1-

17 3 at 40, 44. Plaintiff disputes whether interpretation of the CBA is required to resolve a

18 strictly state law claim. ECF No. 7 at 10-11.

19 The Court has reviewed the CBA sections Defendant points to, particularly

20 sections 4.1.2, 4.1.3, and 5.3.3, and finds that there is no substantive dispute as to the

21 language of these sections, and that these sections would, at most, be referred to in

22 resolving the claim. The mere fact that the Court might consult the CBA or that some

23 aspects of wages are addressed in the CBA does not turn the claim into one that requires

24 interpretation of the CBA. See Lopez v. S E Pipe Line Constr. Co., 2024 WL 171391, at

25 *5 (S.D. Cal. Jan. 16, 2024) (“Defendant has not identified any substantive dispute over

26 the language of the CBA that would require interpretation, and the Court therefore finds

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1 that the minimum wage claims . . . are not substantially dependent on analysis of the

2 CBA.”); see also Cramer v. Consol. Freightways Inc., 255 F.3d 683, 692 (9th Cir. 2001)

3 (“[a] creative linkage between the subject matter of the claim and the wording of a CBA

4 provision is insufficient; rather, the proffered interpretation argument must reach a

5 reasonable level of credibility”). Accordingly, the minimum wage claim is not

6 preempted under § 301.

7 C. Count Three: Meal Breaks

8 Defendant argues that the Labor Code § 512(e) exemption applies, and thus

9 Plaintiff has no state law meal break claim because it is preempted under step one. ECF

10 No. 4-1 at 17. Plaintiff responds that Defendant does not meet § 512(e)’s requirements

11 and that the claim otherwise does not require interpretation of the CBA, and thus it is not

12 preempted. ECF No. 7 at 14-15.

13 If § 512(e)’s requirements are met, the statute’s subdivisions requiring meal

14 periods would not apply to Plaintiff and other aggrieved employees. Plaintiff is

15 “employed in a construction occupation,” Cal. Lab. Code § 512(f)(1), so subdivision (e)

16 applies if the following conditions are satisfied:

17 (1) The employee is covered by a valid collective bargaining

18 agreement.

19 (2) The valid collective bargaining agreement expressly

20 provides for the wages, hours of work, and working conditions

21 of employees, and expressly provides for meal periods for those

22 employees, final and binding arbitration of disputes concerning

23 application of its meal period provisions, premium wage rates

24 for all overtime hours worked, and a regular hourly rate of pay

25 of not less than 30 percent more than the state minimum wage

26 rate.

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1 Id. §§ 512(e)(1), 512(e)(2).

2 These are the same two conditions that must be met for the § 514 exemption to

3 apply with substantively similar language. For the same reasons the Court articulated in

4 Section I, the Court finds that the CBA does not meet these requirements.

5 The claim is not otherwise preempted under step two of the analysis. Plaintiff’s

6 meal period claim arises solely out of state law, and much like Counts One and Two, it

7 does not require interpretation of the CBA. See Valles v. Ivy Hill Corp., 410 F.3d 1071,

8 1082 (9th Cir. 2005) (“[b]ecause the employees have based their meal period claim on

9 the protections afforded them by California state law, without any reference to

10 expectations or duties created by their collective bargaining agreement, the claim is not

11 subject to preemption”) (cleaned up). Accordingly, Plaintiff’s meal breaks claim is not

12 preempted under § 301.

13 D. Count Four: Rest Breaks

14 Defendant argues that Plaintiff’s rest breaks claim is preempted under step one

15 because of the exemption in Wage Order 16 § 11(D). ECF No. 4-1 at 18. Plaintiff

16 responds, in a conclusory manner, that Wage Order 16 § 11(E) is the only exemption in

17 the section.2 ECF No. 7 at 9. The Court finds that the only exemption is provided under

18 § 11(E) and that Defendant has failed to demonstrate that it applies.

19 Wage Order 16 § 11 generally defines the rest periods that employers should

20 provide. See Cal. Code Regs., tit. 8, § 11160(11). Subsection (D) provides a remedy

21 when “an employer fails to provide an employee a rest period,” but then states that “[i]n

22 cases where a valid collective bargaining agreement provides final and binding

23 mechanism for resolving disputes regarding enforcement of the rest period provisions, the

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26 2 Defendant acknowledges that §11(E) provides an exemption but does not argue that it

applies. ECF No. 4-1 at 15.

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1 collective bargaining agreement will prevail.” Id. § 11160(11)(D). The Court interprets

2 this to mean that an employer need not provide the stated remedy if the CBA provides its

3 own final and binding dispute resolution mechanism. But it does not fully exempt an

4 employer from compliance with the rest of Wage Order 16 § 11 if such a mechanism

5 exists. In fact, it is § 11(E) that provides such a full exemption, not § 11(D).3

6 The cases Defendant cites in support of its proposition also recognize as much.

7 Defendant cites Thieroff v. Marine Spill Response Corp., 2022 WL 2965393 (C.D. Cal.

8 June 6, 2022) and Zayerz v. Kiewit Infrastructure West, 2018 WL 582318 (C.D. Cal. Jan.

9 18, 2018) in support of its argument. In Thieroff, the court found that Plaintiffs “cannot

10 state a claim under section 11 of Wage Order 16” because “the CBAs provide equivalent

11 protection for rest breaks,” as is required by § 11(E). 2022 WL 2965393 at *5.

12 Similarly, in Zayerz, the court found that the plaintiff’s rest period claims were exempted

13 because plaintiff was “covered . . . by a valid CBA that offered equivalent protection as

14 that found [in] Wage Order No. 16.” 2018 WL 582318 at *4. Accordingly, courts

15 clearly interpret § 11(E), rather than § 11(D), to be the subsection that provides an

16 exemption.

17 While § 11(E) provides an exemption, Defendant makes no argument that the CBA

18 provides equivalent protections to Wage Order 16, which would trigger the exemption.

19 See ECF No. 4-1 at 18-20 (absence). And Plaintiff argues that no such proviso exist in

20 the CBA. ECF No. 7 at 9. The Court thus finds that no exemption applies, and that

21 Plaintiff’s rest period claim is not preempted under § 301.

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3 Section 11(E) states, “[t]his section shall not apply to any employee covered by a valid

26 collective bargaining agreement if the collective bargaining agreement provides

equivalent protection.” Cal. Code. Regs., tit. 8, § 11160(11)(E) (emphasis added).

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1 E. Count Five: Sick Leave

2 Defendant argues that there are two exemptions that apply to Plaintiff’s sick leave

3 claim: Labor Code § 245.5(a)(1) and § 245.5(a)(2). ECF No. 4-1 at 20. Plaintiff argues

4 that a § 245.5(a) exemption does not apply because the CBA does not provide an hourly

5 rate of “not less than 30 percent more than the state minimum wage rate” for all

6 employees. ECF No. 7 at 16-17. For the reasons described in Section I, supra, the Court

7 finds that the CBA does not meet the 130% of the state minimum wage requirement that

8 is found in both possible § 245.5 exemptions. See Div. of Lab. Standards Enf’t v. Save

9 Mart Supermarkets, 2022 WL 837206, at *6 (C.D. Cal. Mar. 21, 2022) (“the section

10 245.5(a)(1) exemption, like the section 514 exemption, requires a collective bargaining

11 agreement that provides for the enhanced regular rate of pay for all covered employees”).

12 As such, the exemptions do not apply.

13 Defendant also briefly argues that the paid sick leave claim is preempted because it

14 “seeks additional paid sick leave which can only be provided by the CBA-created trust.”

15 ECF No. 4-1 at 21. In support of this contention, Defendant cites to Rodriguez v.

16 Gonsalves & Santucci, Inc., which addressed a CBA that provided vacation benefits

17 administered by a board of trustees. 2022 WL 161892, at *5 (N.D. Cal. Jan. 18, 2022).

18 However, the court there was discussing the preemption of a claim for vested vacation

19 time upon termination under Labor Code § 227.3, which provides a clear exemption for

20 the claim. Id. Rodriguez is thus inapposite here, because no such exemption exists for

21 this claim, and Defendant puts forth no other arguments for this proposition.

22 Accordingly, the paid sick leave claim is not preempted under § 301.

23 F. Count Six: Untimely Payment of Wages

24 Defendant argues that Plaintiff’s claim for untimely payment of wages is

25 preempted by Labor Code § 204(c). ECF No. 4-1 at 21-22. Plaintiff disputes this

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1 contention, arguing that an explicit waiver of the relevant Labor Code sections is

2 required, and that there is no such waiver here. ECF No. 7 at 17-18.

3 Labor Code § 204(c) provides that “when employees are covered by a collective

4 bargaining agreement that provides different pay arrangements, those arrangements shall

5 apply to the covered employees.” Courts in this Circuit have consistently held that when

6 § 204(c)’s requirements are met, claims under § 204, such as this one, are preempted.

7 See Hall, 146 F. Supp. 3d at 1203 (finding claim preempted where a claim met § 204(c)’s

8 requirements because, in such a situation, the “CBA governs.”); Ariola v. Raytheon CA

9 Techs. Corp., 2023 WL 8764296, at *9 (C.D. Cal. Sept. 6, 2023) (“the Court is satisfied

10 that section 204(c) applies. Therefore, Plaintiff’s section 204 claim exists by virtue of the

11 CBA and is preempted”); Schwanke v. Minim Prods., Inc., 2021 4924772, at *5 (C.D.

12 Cal. May 24, 2021) (holding that, because section 204(c)’s requirements are met,

13 “Plaintiff’s timely payment claim under section 204 therefore exists solely as a result of

14 the CBA and is preempted by section 301”).

15 Here, the CBA clearly provides for weekly wage payment, ECF No. 1-3 at 40,

16 which differs from the bimonthly payment structure provided for in § 204(a). Thus, the

17 CBA “provides different pay arrangements,” and “those arrangements shall apply to the

18 covered employees.” Cal. Lab. Code § 204(c); see Tolentino v. Gillig, LLC, 2021 WL

19 121193, at *3 (N.D. Cal. 2021) (holding that because the “CBA provides for . . . the

20 payment of wages on a weekly basis . . . [Plaintiff’s] right to the timely payment of wages

21 exists solely as a result of the CBA,” and the claim is preempted) (cleaned up).

22 Plaintiff disputes this conclusion and argues that, because the court in Hall noted

23 the clear waiver of rights under § 204, 146 F. Supp. 3d at 1203, such a waiver is required

24 for preemption. ECF No. 7 at 17-18. But the court in Hall did not hold that such a

25 waiver is required, rather, it reasoned that the rights in § 204 are waivable, and that a

26 clear waiver in the CBA was sufficient to satisfy § 204(c). 146 F. Supp. 3d at 1203. The

27

1 plain language of § 204(c) makes clear that a different pay arrangement is also sufficient

2 to waive the rights. It is also telling that many courts in this Circuit have found claims

3 preempted without a clear waiver. See Ariola, 2023 WL 8764296 at *9 (finding CBA’s

4 biweekly payment structure to satisfy § 204(c) without mention of a waiver); Schwanke,

5 2021 4924772 at *5 (finding CBA’s weekly payment structure to satisfy § 204(c) without

6 mention of a waiver); Paulk v. Student Transp. Of Am., Inc., 2024 WL 3291591, at *4

7 (C.D. Cal. July 3, 2024) (finding CBA’s biweekly payment structure to satisfy § 204(c)

8 without mention of a waiver); Bradford v. Pro. Tech. Sec. Servs. Inc. (Protech), 2020 WL

9 2747767, at *4 (N.D. Cal. May 27, 2020) (finding CBA’s weekly payment structure to

10 satisfy § 204(c) without an explicit waiver).

11 Thus, because the CBA provides different pay arrangements than those provided in

12 § 204(a), the claim exists solely under the CBA, and it is preempted under § 301.

13 G. Count Nine: Failure to Reimburse Business Expenses

14 Defendant argues that Plaintiff’s expense reimbursement claim should be

15 preempted under step two because “the CBA contains provisions that touch on the

16 specifics of the alleged expense reimbursement issue.” ECF No. 4-1 at 23. Plaintiff

17 responds that “this allegation is rooted in state law and does not require CBA

18 interpretation.” ECF No. 7 at 20.

19 Plaintiff brings his claim pursuant to California Labor Code § 2802, which states,

20 in relevant part, that “[a]n employer shall indemnify his or her employee for all necessary

21 expenditures or losses incurred by the employee in direct consequence of the discharge of

22 his or her duties.” Cal. Lab. Code § 2802(a). Thus, Plaintiff merely alleges that

23 Defendant failed to satisfy its obligations under this state law. Compl. ¶ 83. Plaintiff

24 does not allege that “the terms of the [CBA] violate state law or raise any dispute as to

25 the interpretation of the [CBA.] Thus, resolution of [this claim] does not require

26 interpreting the [CBA.]” Gonzalez Quiroz v. Coffman Specialties, Inc., 2020 WL

27

1 7258725, at *4 (S.D. Cal. Dec. 10, 2020). Accordingly, Plaintiff’s expense

2 reimbursement claim is not preempted under § 301.

3 H. Remaining Claims

4 Defendant’s only argument that the three remaining claims (Counts Seven, Eight,

5 and Eleven) are preempted is that they are derivative of Plaintiff’s other claims, which it

6 argues are preempted. ECF No. 4-1 at 22. Because they are derived from the other

7 claims, Defendant argues that they must also be preempted. Id. Plaintiff disputes that

8 these claims should be preempted on these grounds, and cites to Curtis, where the court

9 remanded the derivative claims instead of finding that they were preempted. Id.; Curtis,

10 913 F.3d at 1156.

11 The remaining claims are derived from eight other claims. Of those eight claims,

12 one is preempted under § 301 and the other seven are not. The Court is not convinced

13 that, in such a situation, the derivative claims should be preempted based on the

14 preemption of a singular claim from which they are derived. And Defendant cites no

15 case law holding that derivative claims should be preempted in this situation.

16 Accordingly, the derivative claims are not preempted under § 301.

17 I. Dismissal of Plaintiff’s Count Six

18 Once a state law claim has been found to be preempted under § 301, “that claim

19 must either be treated as a § 301 claim, or dismissed as pre-empted by federal labor-

20 contract law.” Kobold v. Good Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1034 (9th Cir.

21 2016) (quoting Allis-Chambers Corp. v. Lueck, 471 U.S. 202, 220 (1985)). An employee

22 can maintain a preempted claim “if she can demonstrate that her remedies under the . . .

23 CBA were exhausted . . . or that her union breached its duty of fair representation in

24 failing to do so.” Kobold, 832 F.3d at 1036; see also id. at 1034.

25 Defendant argues that any preempted claim should be dismissed because Plaintiff

26 did not exhaust his remedies under the CBA or allege that the union breached its duty of

27

1 fair representation. ECF No. 4-1 at 23-24. Instead of responding to Kobold, Plaintiff

2 briefly argues that the Court cannot compel arbitration here, that there was no waiver of

3 statutory rights, and that Defendant waived its right to arbitrate the dispute. ECF No. 7 at

4 20-21.

5 To avoid dismissal here, Plaintiff must have alleged that he exhausted his remedies

6 under the CBA or that the union breached its duty of fair representation. Kobold, 832

7 F.3d at 1034. Plaintiff has alleged neither. Accordingly, the only remaining option for

8 the Court is to dismiss the claim as preempted. Id. The motion to dismiss Count Six is

9 thus GRANTED.4

10 II. Arbitration

11 A. The CBA’s Arbitration Provision

12 “As a general rule in cases to which federal law applies, federal labor policy

13 requires that individual employees wishing to assert contract grievances must attempt use

14 of the contract grievance procedure agreed upon by employer and union as the mode of

15 redress.” Republic Steel Corp. v. Maddox, 379 U.S. 650, 652 (1965). And courts

16 generally cannot interfere when a union and employer agree to include an arbitration

17 provision in a collective-bargaining agreement. 14 Penn Plaza LLC v. Pyett, 556 U.S.

18 247, 257 (2009). When a CBA “contains an arbitration clause, there is a presumption of

19 arbitrability in the sense that ‘[a]n order to arbitrate the particular grievance should not be

20 denied unless it may be said with positive assurance that the arbitration clause is not

21

22

4 The Court has subject matter jurisdiction over Count Six because it is preempted under

23

§ 301. See Curtis, 913 F.3d at 1152 (“a civil complaint raising claims preempted by §

24 301 raises a federal question that can be removed to a federal court”). Because each of

Defendant’s other claims is “intertwined with [Count Six] such that they are a part of the

25

same case or controversy, the Court will exercise supplemental jurisdiction to adjudicate

26 these claims as well.” Braswell v. AHMC San Gabriel Valley Med. Ctr. LP, 2022 WL

707206, at * 4 (C.D. Cal. Mar. 8, 2022) (citing 28 U.S.C. § 1367).

27

1 susceptible of an interpretation that covers the asserted dispute.’” AT & T Techs., Inc. v.

2 Commc’ns Workers of Am., 475 U.S. 643, 650 (1986) (quoting United Steelworkers of

3 Am. V. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)).

4 Here, Defendant argues that any claims that are not dismissed on § 301 grounds

5 should be subject to arbitration. ECF No. 4-1 at 25-33. Plaintiff ignores these arguments

6 in his opposition, and instead opts to argue that the CBA is unconscionable. ECF No. 7

7 at 21-27.

8 Defendant specifically argues that all of Plaintiff’s claims are subject to arbitration

9 under Section B.4.1.1 of the CBA, see ECF No. 1-3 at 54. Section B.4.1.1 reads:

10 all employee disputes concerning violations of or arising under

11 Wage Order 16 . . ., the California Labor Code Sections

12 identified in California Labor Code section 2699.5 as amended,

13 the California Private Attorneys General Act (Labor Code

14 section 2698, et seq.), and federal, state and local law concerning

15 wage-hour requirements, wage payment and meal or rest periods,

16 including claims arising under the Fair Labor Standards Act . . .

17 shall be subject to and must be processed by the employee

18 pursuant to the procedures set forth in this Appendix as the sole

19 and exclusive remedy.

20 Id. And Section B.4.1.2 provides that such statutory disputes must initially go

21 through the CBA’s grievance and arbitration process, id., which is outlined in Section B.2

22 of the CBA, id. at 51-52. Accordingly, if Defendant is correct that Plaintiff’s claims are

23 covered by Section B.4.1.1, then they must be arbitrated.

24 Defendant argues that several of Plaintiff’s claims arise under Wage Order 16, and

25 thus are subject to arbitration under Section B.4.1.1 of the CBA. ECF No. 7 at 27-29, 31-

26 32. The minimum wage claim (Count One) is covered by Wage Order 16 section 4, Cal.

27

1 Code Regs., tit. 8, § 11160(4), the overtime wage claim (Count Two) is covered under

2 Wage Order 16 section 3, id. § 11160(3), the meal breaks claim (Count Three) is covered

3 under Wage Order 16 section 10, id. § 11160(10), the rest breaks claim (Count Four) is

4 covered under Wage Order 16 section 11, id. § 11160(11), the failure to provide records

5 claim (Count Ten) is covered under Wage Order 16 section 7, id. § 11160(7). Because

6 these claims “arise under” Wage Order 16, they are subject to the CBA’s grievance and

7 arbitration procedures.

8 Defendant further argues that several of Plaintiff’s other claims are “identified in

9 California Labor Code section 2699.5,” ECF No. 1-3 at 54, and thus also subject to

10 arbitration under Section B.4.1.1 of the CBA. ECF No. 4-1 at 30-32. The waiting time

11 penalties claim (Count Eight) is brought pursuant to Labor Code §§ 201-03, which are all

12 enumerated in Labor Code § 26995(a). This claim is thus subject to the CBA’s grievance

13 and arbitration procedures. The wage statement violations claim (Count Seven) is

14 brought pursuant to Labor Code § 226, while the expense reimbursement claim (Count

15 Nine) is brought pursuant to Labor Code § 2802. ECF No. 4-1 at 30-32. Both sections

16 were enumerated in the version of Labor Code § 26995(a) that was in effect on July 1,

17 2017, when the CBA was most recently revised, see ECF No. 1-3 at 34, but are no longer

18 enumerated in the statute. However, because “statutes do not apply retroactively unless

19 the Legislature clearly indicated otherwise,” Phillips v. St. Mary Reg’l Med. Ctr., 96 Cal.

20 App. 4th 218, 229 (2002), the Court will apply the version of the statute in effect at the

21 time of contracting. Accordingly, these claims are also subject to the CBA’s grievance

22 and arbitration procedures.

23 Defendant argues that the paid sick leave wages claim (Count Five) is covered by

24 Section B.4.1.1 of the CBA because it alleges a failure to provide a sufficient rate for

25 sick leave, and thus arises under a state law concerning “wage payments.” ECF No. 4-1

26 at 29-30. Defendant is correct that the factual basis for Plaintiff’s claim is the pay rate,

27

1 see Compl. ¶¶ 66-67, and it is plausible that such a dispute could concern “wage

2 payments,” as listed in the CBA’s arbitration provision. Thus, because the provision is

3 “susceptible of an interpretation that covers the asserted dispute,’” AT & T, 475 U.S. at

4 650, the presumption of arbitrability applies. This claim is therefore subject to

5 arbitration.

6 Lastly, Defendant argues that the UCL claim (Count Eleven) is subject to

7 arbitration because it is derivative of the underlying claims, which are also subject to

8 arbitration. Plaintiff does not respond to this argument. The Court agrees that the

9 derivative UCL claim should also be arbitrated, as the claims from which it derives are all

10 subject to arbitration. See Reyna v. WestRock Co., 2020 WL 5074390, at *11-12 (N.D.

11 Cal. Aug. 24, 2020) (dismissing UCL claim because it “relies on and is derivative of

12 [plaintiff’s] minimum wage, overtime, meal/rest-period, and unreimbursed business

13 expenses claims”).

14 Accordingly, all of Plaintiff’s claims, except for Count Six, which was dismissed

15 on other grounds, are subject to arbitration pursuant to the CBA.

16 B. Unconscionability

17 Instead of arguing that the claims are not subject to arbitration, Plaintiff argues that

18 the Court should not compel arbitration because the CBA’s arbitration terms are

19 unconscionable under California law. ECF No. 7 at 21-27. Defendant, in its reply brief,

20 primarily argues that state law unconscionability principles do not apply to CBAs, but

21 also briefly responds to some of Plaintiff’s more specific contentions. ECF No. 8 at 2-4.

22 Defendant’s contention that state law unconscionability principles do not apply in

23 this context is incorrect. Section 2 of the FAA “provides that a court may strike or limit

24 an arbitration provision on ‘such grounds as exist at law or in equity for the revocation of

25 any contract.’” Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1022 (9th Cir. 2016) (quoting

26 9 U.S.C. § 2). Common contract defenses, including unconscionability, can apply to

27

1 invalidate arbitration agreements. AT&T Mobility LLC, 563 U.S. 333, 339 (2011).

2 Unconscionability has both a “procedural” and a “substantive” element, and they must

3 both be present for a court to find that the agreement is unconscionable. Armendariz v.

4 Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 114 (2000). However, they need

5 not be present to the same degree; rather, a sliding scale analysis applies. Id.

6 Procedural unconscionability focuses on oppression and surprise. A & M Produce

7 Co. v. FMC Corp., 135 Cal. App. 3d 473, 486 (1982). There is oppression when there is

8 an “inequality of bargaining power which results in no real negotiation and ‘an absence

9 of meaningful choice.” Id. (quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d

10 445, 449 (D.C. Cir. 1965)). And there is surprise when terms of the bargain are hidden

11 amid a form contract “drafted by the party seeking to enforce the disputed terms.” A& M

12 Prod., 135 Cal. App. 3d at 486.

13 Plaintiff does not argue that there was any element of surprise here. Rather,

14 Plaintiff argues that, because the arbitration agreement was adhesive, it is oppressive.

15 Specifically, Plaintiff argues that he did not have an opportunity to negotiate or opt-out of

16 the terms of the CBA or its arbitration provision. ECF No. 7 at 23-24. But the union

17 negotiated the CBA on behalf of its members—present and future. And “[t]he NLRA

18 was enacted to remedy the inequality of bargaining power between employees . . . and

19 employers.” Cal. Grocers Ass’n v. City of Los Angeles, 52 Cal. 4th 177, 195 (2011).

20 Here, the CBA was not a standardized contract drafted by the employer, instead it was

21 mutually arrived at after a negotiation process. Moreover, the employer did not have

22 superior bargaining power given that it was negotiating with a union made up of

23 hundreds of employees. As such, the Court finds that the CBA or its arbitration provision

24 did not involve oppression or surprise, and thus they are not procedurally unconscionable.

25 Because this is one of the required elements of unconscionability, the Court rejects

26 Plaintiff’s unconscionability argument.

27

1 Accordingly, all of Plaintiff's claims, apart from Count Six, which was dismissed

2 under § 301, are subject to the CBA’s valid arbitration provision. The Court therefore

3 || GRANTS the motion to dismiss these claims and orders arbitration of the claims pursuant

4 || to the CBA’s terms.

5 Leave to Amend

6 Plaintiff has not requested leave to amend in his opposition papers. While “the

7 || court should freely give leave when justice so requires,” Fed. R. Civ. P. 15(a)(2), it need

8 ||not do so where the amendment would be futile, Eminence Cap., LLC v. Aspeon, Inc.,

9 F.3d 1048, 1052 (9th Cir. 2003). Here, amendment would be futile because the

10 || grounds to dismiss are strictly legal. The Court does not believe that any additional facts

11 || would change its conclusion that the claims are arbitrable. Therefore, the Court will not

12 || grant the Plaintiff leave to amend. See Camarillo v. Balboa Thrift and Loan Ass’n, 2021

13 || WL 409726, at *15 (S.D. Cal. Feb. 4, 2021) (finding amendment would be futile after

14 || dismissing claims in favor of arbitration because “no set of facts could avoid” the

15 conclusion that arbitration was warranted); LegalForce RAPC Worldwide, P.C. v.

16 || LegalZoom.com, Inc., 2018 WL 2013552, at *1 (N.D. Cal. Apr. 30, 2018) (denying leave

17 ||to amend where plaintiff failed to show that proposed amendments would “take any of

18 || the stayed claims outside the scope of the arbitration agreement’’).

19 CONCLUSION

20 For the above reasons, the Court GRANTS Defendant’s motion to dismiss in its

21 entirety. Plaintiff's complaint is DISMISSED without leave to amend.

22 IT IS SO ORDERED.

23

24 || Dated: November 20, 2024 <=

26 United States District Judge

27 24

28 24-CV-01581-GPC-SBC