Opposition Brief — Rawson v. Tosco Refining Co.

Supreme Court, U.S. |

: c7tie20 4

APR 10 1998

No. 97-1496 | CLERK

IN THE

Supreme Court of the Hnites States

OCTOBER TERM, 1997

Louis H. RAWSON,

Petitioner,

Vv.

TOSCO REFINING COMPANY,

Respondent.

On Petition For A Writ Of Certiorari To The California

Court of Appeal, First Appellate District

BRIEF IN OPPOSITION

CHRISTOPHER J. MARTIN MIGUEL A. ESTRADA

SUSAN B. BURR Counsel of Record

GIBSON, DUNN & CRUTCHER LLP Gipson, DUNN & CRUTCHER LLP

1530 Page Mill Road 1050 Connecticut Avenue, N.W.

Palo Alto, California 94304 Washington, D.C. 20036

(650) 849-5300 (202) 955-8500

Counsel for Respondent

ss

QUESTION PRESENTED

Whether a State may permissibly provide that

q state-prescribed overtime pay rates do not apply to parties

4 to a collective bargaining agreement that contains its own

overtime pay provisions.

fs Pg Ree OE Fe ee MeO ee oC “

cy Pe eee Fo Soe vs en. a Pee :

RULE 29.6 STATEMENT

Respondent Tosco Refining Company is a division of

Tosco Corporation. Tosco Corporation, a publicly-owned

corporation, has no parent corporation and no nonwholly-

owned subsidiaries.

il

TABLE OF CONTENTS

Page

II i smsatssansusaneneionens i

Se rc cnnemanencunee li

MR RR PAF RIES MII sconces einen escssnseuscosscecccesssevecee iV

i ciasubumcwasen ]

i SAR eR AU a 2

SSPE Gat oan se ee aeRO 2

REASONS FOR DENYING THE WRIT......0.....cccccccceceeee: 6

I. THE CALIFORNIA COURT OF APPEAL

CORRECTLY REJECTED PETITIONER'S

INTERPRETATION OF LIVADAS ...0...cccccccccccceeee. 6

Il. PETITIONER DOES NOT ALLEGE A

CONFLICT, AND THERE IN FACT IS NO

CONFLICT, ON THE ISSUE DECIDED

Pe RO IIe BEI vo oscnsveicesctncesssccecisnses 10

I ha esac cccasc oanenstoes Madrocnomix 12

ili

TABLE OF AUTHORITIES

Cases: Page

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1

RUNES had conbs suk coucS dascicicvidsapaeaisesiactannio eviews 5,7

Golden State Transit Corp. v. City of Los Angeles,

RS Sh ae TE ERD cian bncnwhnccapieendesitieesinreseinss 6

Livadas v. Bradshaw, 512 U.S. 107 (1994) ......... passim

Metropolitan Edison Co. v. NLRB, 460 U.S. 693

EEUMIEEE tas chikc Gocideack serena dakns aaan inks 5,9,10

NBC v. Bradshaw, 70 F.3d 69 (9th Cir. 1995) ....... 10,11

Nash v. Florida Indus. Comm’n, 389 U.S. 235

CIES eck 50s da Sch canalas Gaeta bea 6

Viceroy Gold Corp. v. Aubry, 75 F.3d 482 (9th

Ce, RE. sanssscanaccchonusveteneisasrcsibeeioecvlensackales 11

iv

TABLE OF AUTHORITIES—Continued

Statutory Provisions and Rules: Page

Me Witter BMAD Srniieuracheacn 6 2

29 Na BUF. vsipiseen BU ekki 6

ar URE. § TN) cscs 6

ml. See Cle 6 IF ee 3

8 Cal. Code Reg. Sere i 4

8 Cal. Code Reg. PU MNMEIN isis ee 4

IN THE

Supreme Court of the Huited States

OCTOBER TERM, 1997

No. 97-1496

Louis H. RAWSON,

Petitioner,

V.

TOSCO REFINING COMPANY,

Respondent.

On Petition For A Writ Of Certiorari To The California

Court of Appeal, First Appellate District

BRIEF IN OPPOSITION

Respondent Tosco Refining Company (“Tosco”)

respectfully submits this brief in opposition to the petition

for a writ of certiorari.

OPINIONS BELOW

The opinion of the California Court of Appeal, First

Appellate District (Pet. App. la-7a) is reported at 57 Cal.

App. 4th 1520 (1997). The opinion of the Superior Court

for the State of California, County of Contra Costa,

granting summary judgment (Pet. App. 8a-10a) is not

reported.

JURISDICTION

The judgment of the Court of Appeal of the State of

California, First Appellate District, was entered on

September 30, 1997. The California Supreme Court denied

a petition for discretionary review on December 23, 1997.

The petition for a writ of certiorari was filed on March 11,

1998. The jurisdiction of this Court is invoked under

28 U.S.C. § 1257 (1994).

STATEMENT

1. Petitioner has been employed by Tosco as a refinery

unit operator since September 8, 1992. He has been a

member of the bargaining unit represented exclusively by

the Oil, Chemical and Atomic Workers International Union

Local 1-5, AFL-CIO (“Union”) during his entire

employment. See Appellant's Appendix in Lieu of Clerk's

Transcript (“C.A. App.”) at 181-82. Since at least 1944,

Tosco’s refinery has operated 24 hours a day, seven days a

week, and its refinery operators, among other positions that

must be staffed around the clock, work on shift schedules,

consistent with industry practice. /d. at 183-84.

Provisions concerning overtime pay for Tosco’s refinery

workers have been negotiated with the Union and made a

. part of the collective bargaining agreement (“CBA”) for

more than 50 years. C.A. App. at 183-84. The CBA

contains overtime pay provisions particularly appropriate to

the refining industry and tied to the shift schedule. Those

provisions provide for time and one-half for all hours

worked over eight hours in a 24-hour period. /d. at 184-85

In some cases, that premium rate is paid for hours that

Dee tel ciate Mawel dein at ae,

otherwise would not be eligible for overtime compensation

under state law. !

Effective February 1, 1996, the Union and Tosco agreed

to a new, three-year contract, reaffirming those overtime

wage provisions. That contract was ratified by an

overwhelming majority of the bargaining unit members.

C.A. App. at 182-83.

2. Petitioner filed this action in the Superior Court of

the State of California, County of Contra Costa, on

September 26, 1995, alleging that he and his fellow union

workers at Tosco are entitled to a higher rate of overtime

pay than is provided for under the terms of the CBA.

Under California law, the State’s Industrial Welfare

Commission has authority to promulgate wage orders

setting forth rates of pay for employees in particular

industries. See Cal. Labor Code § 1173 (Deering 1998).2

Industrial Wage Commission (“IWC”) Wage Order 1-89,

1 For example, employees are paid overtime for the entire first hour

of overtime, even if they work only a portion of the hour, CBA,

§ 7.013; C.A. App. at 184-85, and are paid overtime for all work

on the first day of a new schedule if the schedule is changed with

less than 40 hours notice. CBA § 7.011(d); C.A. App. at 184-85.

Moreover, workers subject to the CBA are entitled to a minimum

of four hours of pay if they are called to return to the refinery after

a regular shift of eight hours, even if they do not work the entire

four hours (or any of it). (CBA, § 7.014; see C.A. App. at 184-

85)

bo

There are 15 wage orders, each covering particular industry

Occupations, such as professional and technical, public

housekeeping, transportation, broadcasting, motion picture,

amusement and recreation, and agricultural.

the order applicable to the refining industry, provides that

employees who work more than twelve hours in a single

day (or more than eight hours in the seventh day of the

workweek) must be paid at least double the regular rate of

pay for that overtime. 8 Cal. Code Reg. §11010(3)(A)(2).

IWC Wage Order 1-89(3), however, sets forth an

exemption from the order’s overtime-pay requirements:

Except as provided in subsections (C) and (E)>,

this section shall not apply to any employee

covered by a collective bargaining agreement if

said agreement provides premium wage rates

for overtime work and a cash wage rate for

such employees of not less than one dollar

($1.00) per hour more than the minimum wage.

8 Cal. Code Reg. §11010(3)(F). Petitioner’s theory in

bringing suit was that this exemption was preempted by

federal law, because Livadas v. Bradshaw, 512 U.S. 107

(1994), established that the State may not deny him the

benefit of state-law protections simply because he is

covered by a collective bargaining agreement.

3. On cross-motions for summary judgment, the

Superior Court dismissed petitioner’s complaint in its

entirety. The court disagreed with petitioner that Livadas

has any application to cases, like this one, where state law

merely permits employees or their unions to contract out of

default rules provided by state law. The Superior Court

explained that Livadas expressly noted that its reasoning

“should cast no shadow on the validity of these familiar and

3 Those subsections, not relevant here, apply to overtime rates for

minors and provision of meal facilities.

i AAO Pati DARE MS NEA AP Lge A RIO "NS BA Da Ae Ri ND acl hs sar aie ton basa Pda ie he ee ee

narrowly drawn opt-out provisions.” Pet. App. 9a (quoting

Livadas, 512 U.S. at 132). The court also rejected

petitioner’s argument that Metropolitan Edison Co. v.

NLRB, 460 U.S. 693 (1983), required the wage order

exemption to contain a “clear and unmistakable waiver.”

The court noted that Metropolitan Edison “involved a ‘no

strike’ provision in a collective bargaining agreement” and

thus was simply “not on point.” Pet. App. 9a.

4. The California Court of Appeal, First Appellate

District, affirmed. The court examined the holding of

Livadas, and in particular the portion of the opinion that

addressed provisions in state and federal laws that draw

distinctions between union and nonunion represented

employees, and noted this Court's recognition that

“virtually all” such provisions are alike in that “union

represented employees have the full protection of the

minimum standard, absent any agreement for something

different.” Pet. App. 4a (citing Livadas, 512 U.S. at 131).

The court then focused on the question whether the wage

order exemption at issue in this case is a “valid opt-out

provision which is not preempted” under Livadas. Pet.

App. 4a. Relying upon federal authority in support of its

position, and in particular this Court’s decision in Fort

Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987), the

Court of Appeal held that the state wage order exemption

was not an impermissible intrusion into the collective

bargaining process. Pet. App. 5a-6a.

The Court of Appeal also rejected petitioner’s contention

that the exemption is invalid “because it does not require

the collective bargaining agreement to contain a ‘clear and

unmistakable waiver’ of his state law rights as an employee

to double time pay.” Pet. App. 6a. The court

distinguished the cases upon which petitioner based his

argument on the ground that petitioner had not cited to any

iiililiimsaiasiiatiiadiiesidisiaiaia

6

statute prohibiting contractual agreements for different

overtime pay rates than those established by the wage

orders. Pet. App. 6a-7a.

5. The California Supreme Court denied further review

on December 23, 1997. Pet. App. 11a.

REASONS FOR DENYING THE WRIT

Petitioner renews his contention that IWC Wage Order

1-89 is inconsistent with Livadas. The Court of Appeal

correctly resolved that claim, and its decision does not

conflict with any decision of this Court or of any other

court. Further review is therefore not warranted.

I. The California Court of Appeal Correctly

Rejected Petitioner’s Interpretation of Livadas

1. Section 7 of the National Labor Relations Act

(“NLRA”), 29 U.S.C. § 157 (1994), guarantees employees

the right to bargain collectively, and Section 8(a)(1), 29

U.S.C. § 158(a)(1) (1994), makes it an unfair labor

practice for an employer to impede an employee’s exercise

of that right. Because this Court has recognized that the

NLRA confers rights “on employees and not merely as

against the employer,” Golden State Transit Corp. v. City

of Los Angeles, 493 U.S. 103, 109 (1989) (citation

omitted), however, state laws that nullify the rights of

employees under the NLRA have been held to be

preempted under the Supremacy Clause. See, e.g., Nash v.

Florida Indus. Comm’n, 389 U.S. 235, 239-40 (1967)

(invalidating state law that denied unemployment benefits to

persons who, as permitted by the NLRA, had filed an

unfair labor practice charge).

Livadas involved a narrowly circumscribed application

of that principle. In that case, California law required that

ania ag as i ale ee alee alei eet ae

all wages earned and unpaid at the time of an employee’s

discharge be paid upon discharge, and it provided a penalty

for non-compliance with that requirement. See 512 U.S. at

111-12 (discussing Cal. Lab. Code §§ 201, 203 (Deering

1991)). California’s Labor Commissioner, however, had a

policy of refusing to enforce claims for untimely payment

of final wages where the claim was brought by an employee

who was covered by a collective bargaining agreement that

contained an arbitration clause. This Court held that the

Commissioner’s policy was preempted by federal law

because it predicated state law benefits on refraining from

joining a union, conduct protected by Section 7 of the

NLRA. See 512 U.S. at 110.

The distinction between this case and Livadas is plain.

The CBA that covered Livadas’ employment had no

provision whatsoever concerning the time for payment of

final wages; nevertheless, the Labor Commissioner’s

policy resulted in the rejection of her claim simply because

she was a member of a union that had negotiated a CBA

governing other terms and conditions of her employment.

In this case, state-law benefits are not predicated on

refraining from conduct protected by federal labor law.

Rather, the California wage orders recognize such protected

conduct by permitting unionized workers to choose — they

may decide through collective bargaining how they should

be paid premium pay for overtime work. In the absence of

such a provision in a collective bargaining agreement, they

will be covered by the wage order. The wage orders thus

permit parties to “opt in” or “opt out” of the state-law

overtime wages. It has long been settled that such freedom

to “contract out of” state minimum labor standards is

perfectly consistent with federal labor law. See Fort Halifax

Packing Co., Inc. v. Coyne, 482 U.S. 1, 22-23 (1987)

(noting that “[t}he fact that the parties are free to devise

their own . . . arrangements . . . strengthens the case that

the statute works no intrusion on collective bargaining”).

Indeed, Livadas itself recognized and emphasized the

importance of this distinction:

While the Commissioner and her amici call our

attention to a number of state and federal laws

that draw distinctions between union and

nonunion represented employees, . . . virtually

all share the important second feature observed

in Coyne, that union-represented employees

have the full protection of the minimum

standard, absent any agreement for something

different. These “opt out” statutes are thus

manifestly different in their operation (and their

effect on _ federal rights) from _ the

Commissioner’s rule that an employee forfeits

his state law rights the moment a collective-

bargaining agreement with an arbitration

clause is entered into.

512 U.S. at 131-32 (emphasis added). Accordingly, in

invalidating “the Commissioner’s unusual policy” this court

“cast no shadow on the validity” of such opt-out

provisions. /d. at 132. The courts below hardly committed

error in faithfully heeding that admonition.

2. Petitioner fares no better by characterizing the issue,

in passing, as one involving the standard of “waiver” that

applies in cases like this one, and by contending that the

“waiver” must be “clear and unmistakable.” Pet. 6-7.

That contention scarcely lends support to petitioner’s basic

claim that the Court of Appeal departed from Livadas,

since this Court made perfectly clear in Livadas that no

waiver issue was before it: Not only was it clear that the

right at issue was expressly made non-waivable by

Wis einer ra

ee

se EE ee over ce eee

9

California law (see 512 U.S. at 111, n. 3, citing Cal. Labor

Code § 219 (Deering 1991)), but also “[t}here [was] no

suggestion . . . that Livadas’ union sought or purported to

bargain away her protections under § 201 or § 203 ....”

512 U.S. at 125.

Metropolitan Edison Co. v. NLRB, 460 U.S. 693 (1983),

which petitioner also cites (Pet. 6), is even farther afield.

In that case, employees of Metropolitan Edison,

represented by the Electrical Workers Union, engaged in

unlawful strikes against the company, in violation of the

“no-strike” clause in their collective bargaining agreement.

On each occasion, the company disciplined the union

officials more severely than the other union members. The

union filed grievances regarding the disparate treatment,

and the arbitrator upheld the company’s action on the

ground that union officials have an affirmative duty to

uphold the terms of the collective bargaining agreement.

Several years later, employees of the company refused to

cross an informational picket line, and the company again

imposed harsher disciplinary penalties on the union

officials. The union filed unfair labor practice charges

against the company, and the company took the position

that the prior arbitration awards were sufficient to impose a

contractual duty on the union officials to cross the picket

line. The company based its entire “waiver” argument on

the fact that the union had lost two previous arbitrations on

the issue, and had remained silent in subsequent contract

negotiations. In rejecting the company’s claim, this Court

“recognized that a union may waive a member’s statutorily

protected rights,” 460 U.S. at 705, but it concluded that, in

the case before it, “[t]here [had been] no showing that the

10

Oo Deg bul ai et Aaah NS aa FORTE

parties intended to incorporate [the earlier arbitral awards]

into the subsequent agreement.” Jd. at 709-10.4

Here, the overtime provision with which petitioner

disagrees is expressly set forth in the collective bargaining

agreement. Petitioner cites no authority for his unusual

contentions that federal law requires the legislated

exemption to contain a “clear and convincing waiver”

requirement, or that the CBA provision must enumerate all

of the overtime provisions that are not intended to be part

of the parties’ agreement. In fact, it is difficult to see how

the agreement in this case could fail to meet any standard of

waiver that might conceivably apply. That petitioner is

forced to argue that his own standard of “explicitness” is

not satisfied by “[e]xpress agreement” (Pet. 6) persuasively

demonstrates the insubstantiality of his position.

II. Petitioner Does Not Allege A Conflict, And

There In Fact Is No Conflict, On The Issue

Decided By The Court Below

Petitioner does not even attempt to allege that the lower

courts are in need of guidance on the meaning of Livadas,

that the question he raises is recurring and important to

litigation in other areas of the country, or that this case

4 It is clear that the Metropolitan Edison case did not deal with

parties’ rights to bargain collectively over the terms and conditions

of their employment. The Court described the scope of its holding

as involving “the narrow question . . . whether an employer may

unilaterally define the actions a union official is required to take to

enforce a no-strike clause and penalize him for his failure to

comply.” 460 U.S. at 700.

———eaeaaaaaaaaE =

Tiina rin’

11

meets any other of the traditional prerequisites to this

Court’s plenary review.

To the contrary, the only other appellate court to

consider the validity of California’s exemptions has agreed

with the conclusion reached by the courts below. In NBC

v. Bradshaw, 70 F.3d 69 (9th Cir. 1995), the Ninth Circuit

recognized the validity of a wage order exemption for

employees covered by a collective bargaining agreement,

identical to the exemption challenged here. In NBC, as

here, the Wage Order covering employees in the

broadcasting industry, number 11-80, also contained an

exemption for collective bargaining agreements, identical to

the exemption of IWC Wage Order 1-89, and the union

made the same argument advanced by petitioner in this

case — that Livadas compelled the court to hold that the

exemption was preempted by federal law and therefore

invalid. The court disagreed, and held that the exemption

was a Valid “opt out” provision upon which Livadas had no

impact:

[The union has] asked that we affirm the district

court on the ground that the intervening

Supreme Court decision in Livadas requires us

to hold Wage Order 11-80’s § 3(F) exemption

invalid. We cannot accept this position as the

Court in Livadas stressed that its holding “cast

no shadow on the validity of... familiar and

narrowly drawn opt-out provisions.” Livadas,

114 S. Ct. at 2082. California has tailored such

an opt-out provision in §3(F) of Wage

Order 11-80.

70 F.3d at 73; see also Viceroy Gold Corp. v. Aubry,

75 F.3d 482, 489-90 (9th Cir. 1996) (same). No other

appellate decision has so much as discussed the issue. In

12

these circumstances, petitioner has offered no persuasive

reasons for this Court’s intervention.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

CHRISTOPHER J. MARTIN MIGUEL A. ESTRADA

SUSAN B. BURR Counsel of Record

GIBSON, DUNN & CRUTCHER LLP GIBSON, DUNN & CRUTCHER LLP

1530 Page Mill Road 1050 Connecticut Avenue, N.W.

Palo Alto, California 94304 Washington, D.C. 20036

(650) 849-5300 (202) 955-8500

Counsel for Respondent

April 10, 1998

;

4

1