Brown

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MARIO B BROWN, Case No. 24-cv-07300-RFL

Plaintiff,

ORDER DENYING MOTION TO

v. REMAND AND MOTION TO DISMISS

AUTO WAREHOUSING CO., Re: Dkt. Nos. 21, 24

Defendant.

Plaintiff Mario Brown brought a class action suit in California state court against his

employer, Defendant Auto Warehousing Co., and 100 Doe Defendants. Brown’s complaint

alleged five causes of action comprising violations of the California Labor Code for (1) failure to

pay minimum wage for all hours of work, (2) failure to authorize or permit meal periods, (3)

failure to indemnify employees for employment-related losses and expenditures, (4) failure to

provide complete and accurate wage statements, and (5) unfair business practices in violation of

the Business and Professions Code. (Dkt. No. 1-2 (“Complaint”).) Auto Warehousing removed

the case to federal court, asserting that removal was proper based on either (a) federal question

jurisdiction under the Labor Management Relations Act (“LMRA”) or (b) diversity jurisdiction

under the Class Action Fairness Act of 2005 (“CAFA”). (Dkt. No. 1.) Auto Warehousing now

moves to dismiss Brown’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and

requests that the Court take judicial notice of two collective bargaining agreements (“CBAs”)

that governed the terms of Brown’s employment (Dkt. Nos. 21; 21-2); Brown moves to remand

the case to state court (Dkt. No. 24). For the reasons that follow, Auto Warehousing’s request

for judicial notice is GRANTED, and Auto Warehousing’s motion to dismiss and Brown’s

motion to remand are both DENIED. This order assumes the parties’ familiarity with the

underlying facts, the applicable legal standards, and both sides’ arguments.

Motion to Remand. Brown’s motion to remand is denied because federal court

jurisdiction is proper under CAFA. Brown argues that Auto Warehousing failed to establish

CAFA’s $5,000,000 amount-in-controversy requirement because its amount-in-controversy

calculations “rely on sweeping, evidence-free assumptions, principally 100% violation rates and

maximum penalties.” (Dkt. No. 24-1 at 5.)1 Because Brown’s argument is that the assumptions

on which Auto Warehousing’s numbers “are based are not supported by evidence,” Brown’s

attack is factual, and Auto Warehousing must establish by a preponderance of the evidence that

the amount in controversy exceeds $5,000,000. Anderson v. Starbucks Corp., 556 F. Supp. 3d

1132, 1136 (N.D. Cal. 2020) (quoting Harris v. KM Indus., Inc., 980 F.3d 694, 700 (9th Cir.

2020)).

Auto Warehousing has met this burden. After a review of its records, Auto Warehousing

found that it employed an average of 160 non-exempt employees per year during the relevant

four-year time period. (Dkt. No. 1 at ¶ 58.) Auto Warehousing’s calculations used real wage

rates, specifically, state minimum wage averages and Brown’s personal hourly rate of $17.73,

which Auto Warehousing obtained from a declaration from its Director of Human Resources,

Jacqueline Wihbey. (Id. at ¶¶ 59–62; see also Dkt. No. 1-3 at 3.) While Brown characterized

Auto Warehousing’s calculations as assuming “maximal class wide noncompliance” (Dkt. No.

24-1 at 5), Auto Warehousing’s assumptions were reasonable in light of the allegations in

Brown’s complaint. Brown’s minimum wage and meal period claims arose from his allegations

that Auto Warehousing had a policy of rounding down the putative class’s “total daily hours at

the time of their clock-ins and clock-outs, including clock-ins and clock-outs for meal breaks, to

1 All citations to page numbers in filings on the docket refer to ECF page numbers.

the nearest quarter of an hour.” (Complaint at ¶ 36(a); see also id. at ¶ 43(a).) Rather than

alleging simply that Auto Warehousing from time-to-time rounds down its employees’ total daily

hours, Brown alleges that Auto Warehousing has an ongoing policy of doing so. Cf. Ibarra v.

Manheim Invs., Inc., 775 F.3d 1193, 1198–99 (9th Cir. 2015). It was therefore reasonable for

Auto Warehousing to treat each meal break as having been too short and each day as having

been one hour short based on the four clock-ins and clock-outs. For this same reason, Auto

Warehousing also reasonably assumed that for Brown’s wage statement claim, each employee

would be entitled to the statutory limit of $4,000 in penalties. Finally, Auto Warehousing’s

arithmetic, which incorporated the previously described numbers, revealed that the total

estimated amount in controversy is “well in excess” of $5,000,000, even without including

damages for Brown’s unfair business practices claim, “all [other] applicable penalties,” and

liquidated damages. (Dkt. No. 1 at 72.) Combined, this is sufficient to establish the amount in

controversy by a preponderance of the evidence. Brown’s motion to remand is denied.

Attorneys’ Fees and Costs. Accordingly, the Court declines to award attorneys’ fees and

costs to Brown for litigating the motion because removal was proper under CAFA.

Request for Judicial Notice and Motion to Dismiss. The Court grants Auto

Warehousing’s request for judicial notice of the 2018 and 2021 CBAs that governed Brown and

the putative class’s employment. (See Dkt. No. 21-2.) Auto Warehousing “does not rely on

judicial notice to establish facts outside the CBA, in which case [Brown] may reasonably dispute

whether the CBA actually establishes them,” but instead “seeks to show only that the CBA says

what it says for the purpose of determining preemption.” Sarmiento v. Sealy, Inc., 367 F. Supp.

3d 1131, 1143–44 (N.D. Cal. 2019) (cleaned up). The CBAs are thus properly considered in

evaluating Auto Warehousing’s motion to dismiss and its arguments.

Auto Warehousing’s motion to dismiss is denied. None of Brown’s claims are preempted

under Section 301. A claim is preempted under Section 301 if (1) it arises solely from a “right or

duty of the CBA” or (2) it nonetheless requires interpretation of a CBA. Alaska Airlines Inc. v.

Schurke, 898 F.3d 904, 920–21 (9th Cir. 2018) (citation omitted). None of Brown’s claims

fulfill these requirements.

Brown’s minimum wage claim neither arises from a CBA right nor requires interpreting a

CBA. Brown’s claim is not an overtime claim (nor is it intertwined with one), as his claim is

that he was not paid at all for some periods when his daily hours were rounded down.

(Complaint at ¶ 37.) And even if the Court were to construe Brown’s claim as containing an

overtime component, the overtime exemption in Labor Code Section 514 does not apply.

Section 514 requires that the applicable CBA provide a regular hourly rate of pay “not less than

30 percent more than the state minimum wage” for all employees covered by the CBA.

However, instead of arguing that the CBAs’ hourly rates of pay are more than 30 percent above

the state minimum wage, Auto Warehousing argues that the CBAs’ hourly rates of pay “are more

than 30 percent of the applicable California minimum wage rates.” (Dkt. No. 21-1 at 11–12

(emphasis added); see also Dkt. No. 21-2 at 17 (reflecting 2020 CBA hourly wage rate for

“Yard/Shuttle” classification of $16.50, 27% above the 2020 California minimum hourly wage

of $13.00).) Accordingly, the minimum wage claim does not arise solely from a CBA right,

even if the claim did contain an overtime component. See Alaska Airlines Inc, 898 F.3d at 921.

(See also Dkt. No. 21-1 at 11–12.)

Brown’s minimum wage claim also does not substantially depend on the analysis of a

CBA. Rather than complaining about the rate at which he was compensated, Brown is alleging

that he and other members of the putative class did not receive any payment for certain hours due

to Auto Warehousing’s policy of rounding down. All that needs to be decided is whether Auto

Warehousing paid its employees “minimum wages for all hours they worked, an inquiry that

does not implicate any CBA provisions.” Jimenez v. Young’s Mkt. Co., LLC, No. 21-CV-02410-

EMC, 2021 WL 5999082, at *8 (N.D. Cal. Dec. 20, 2021) (citation omitted). Because Brown’s

unpaid wages claim does not arise from a CBA right or depend on the interpretation of a CBA,

Section 301 does not preempt the claim.

Auto Warehousing does not contend that Brown’s meal break claim arises from a CBA

right, but argues only that this claim substantially depends on the analysis of a CBA. Auto

Warehousing points to (1) a CBA provision stating that employees are entitled to “a half (1/2)

hour unpaid lunch,” the start time of which “may vary based on production needs, staying within

state and federal law regarding breaks” (Dkt. No. 21-1 at 13), and (2) Labor Code Section 512’s

requirement of a thirty-minute meal period. (Id. at 14.) However, Brown’s meal period claim,

which arises from allegations that he did not receive meal periods for each five-hour period he

had worked due to Auto Warehousing rounding down his daily hours, does not turn on the

interpretation of the CBAs or Auto Warehousing’s practices for handling “missed lunch

periods.” (Id. at 13–14.) Even if the CBAs afford Auto Warehousing some flexibility regarding

the start time of its employees’ lunch breaks, the CBAs do not otherwise affect Brown’s right to

a thirty-minute meal period for every five-hour period worked. Thus, Brown’s right to a meal

period is not substantially dependent on analysis of a CBA, and his meal period claim is not

preempted by Section 301. Johnson v. S.F. Health Care & Rehab Inc., No. 22-CV-01982-JSC,

2022 WL 2789809, at *7 (N.D. Cal. July 15, 2022) (provision permitting interruption of meal

periods “in case of emergency” need not be interpreted when deciding meal period claim).

Auto Warehousing does not contend that Brown’s indemnification claim arises from a

CBA right, but argues only that this claim substantially depends on the analysis of a CBA. The

indemnification claim arises from Brown’s allegations that Auto Warehousing required Brown

and the putative class “to use or purchase their own tools” without reimbursing them.

(Complaint at ¶ 50(a).) Labor Code Section 2802 provides that “[a]n employer shall indemnify

his or her employee for all necessary expenditures or losses incurred by the employee in direct

consequence of the discharge of his or her duties.” Cal. Lab. Code § 2802(a). This protection is

“non-waivable,” therefore, “it is not clear why the Court would need to reference the CBA at all,

let alone interpret it, to resolve [Brown’s] claim for failure to reimburse expenses . . . , which

does not invoke his rights under the CBA.” Carrillo v. Monterey Mech. Co., No. 24-CV-09202-

LJC, 2025 WL 2615064, at *15 (N.D. Cal. Sept. 10, 2025) (citation omitted). To be sure, the

CBAs include provisions stating that “[t]he Employer will furnish tools and equipment for use by

employees in accordance with work performed under this contract,” and that “[t]he Company

will replace any defective or broken tools during normal job usage.” (Dkt. No. 21-2 at 14, 39.)

But “the fact that a CBA ‘may provide a remedy for conduct that coincidentally violates state-

law does not make the existence or the contours of the state law violation dependent upon the

terms of the private contract.’” Carrillo, 2025 WL 2615064, at *15 (quoting Wilson-Davis v.

SSP Am., Inc., 434 F. Supp. 3d 806, 816 (C.D. Cal. 2020)). Brown’s claim that he and members

of the putative class were not reimbursed for certain tools they had to purchase for work does not

require interpreting CBA provisions relating to Auto Warehousing’s obligations to provide tools

and occasionally replace them. Because Brown’s indemnification claim does not substantially

depend on the interpretation of a CBA, it is not preempted by Section 301.

Auto Warehousing argues only that the wage statement and unfair business practices

claims are “derivative claims” preempted under Section 301 because their underlying claims are

preempted. (Dkt. No. 21-1 at 15–16.) With Brown’s unpaid wages, meal period, and

indemnification claims not preempted by Section 301, his wage statement and unfair business

practices claims are similarly not preempted.

Because none of Brown’s claims are preempted by the LMRA, Brown was not required

to exhaust the CBAs’ grievance procedures as required by the LMRA. Sidhu v. Flecto Co., 279

F.3d 896, 898 (9th Cir. 2002) (“Before bringing suit, however, an employee must first exhaust

the grievance procedures established by the CBA.”). (See Dkt. No. 21-1 at 16.) The LMRA thus

does not provide a basis on which to dismiss Brown’s claims.

Moreover, Brown’s claims are not subject to the CBAs’ grievance and arbitration

procedures. Statutory claims such as Brown’s “may be the subject of an arbitration agreement,

enforceable pursuant to the FAA.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26

(1991). Under the terms of the CBA, the CBA’s grievance and arbitration procedures apply to

“[a]ll disputes growing out of the interpretation or application of the Agreement or practices

there under, or matters concerning discharge, discipline, rejection of seniority.” (Dkt. No. 21-2

at 23, 49.) Furthermore, Section 13.6 of the CBAs state that “[t]he power and authority of the

arbitrator shall be strictly limited to determining the meaning and interpretation of the express

terms of the Agreement and issuing an award in accordance with the Agreement.” (/d. at 24,

50.) However, in support of its argument that Brown’s claims are subject to the CBAs’

grievance and arbitration procedures, Auto Warehousing merely repeats its assertions that

Brown’s claims “are disputes arising out of the terms of the CBAs” or are “derivative” of such

claims. (Dkt. No. 21-1 at 19.) But as described above, Brown’s claims arise from rights under

state law, not from CBA rights, and do not otherwise involve disputes surrounding the

interpretation or application of the CBAs. The CBAs’ grievance and arbitration provisions

therefore do not apply to, and do not require dismissing, Brown’s claims.

Conclusion. For the foregoing reasons, Brown’s motion to remand is DENIED, Auto

Warehousing’s request for judicial notice is GRANTED, and Auto Warehousing’s motion to

dismiss is DENIED.

IT IS SO ORDERED.

Dated: November 6, 2025

RITA F. LIN

United States District Judge