Unreported / Non-Citable
Background
Christopher Rhynes sued PCA Central California Corrugated, LLC and other defendants in Sacramento County Superior Court under California's Private Attorneys General Act, alleging multiple Labor Code violations. Defendants removed the action on federal-question grounds, asserting that two collective bargaining agreements governed the underlying claims and that section 301 of the Labor Management Relations Act therefore preempted them. Rhynes moved to remand. The motion was fully briefed and submitted without oral argument under Local Rule 230(g).
The court explained that removal is proper only when the action could originally have been filed in federal court. Under the well-pleaded complaint rule, a federal question must appear on the face of the properly pleaded complaint. Defendants bore the burden of establishing jurisdiction by a preponderance of the evidence, doubts about removal favored remand, and section 1447(c) requires remand when the district court lacks subject-matter jurisdiction.
Because PAGA claims derive from predicate Labor Code violations, the court examined whether any underlying claim was preempted. It applied the Ninth Circuit's two-part Curtis inquiry: whether the asserted right exists solely because of a CBA, and whether the state-law right is substantially dependent on analysis of that agreement. The second inquiry distinguishes merely looking to a CBA from interpreting it, and requires an active dispute over contract terms.
The Court’s Holding
At Curtis step one, defendants argued that Labor Code sections 510 and 511 did not govern the overtime claim, and the minimum-wage claim dependent on it, because the CBAs qualified for the section 514 exemption. The parties did not dispute that the CBAs addressed wages, hours, and working conditions. Rhynes responded that Helper Stack Off and Clerk-Maintenance workers received regular rates below 130 percent of the state minimum wage. Defendants did not contend those classifications met that threshold, but argued that employees whose own pay exceeded it remained exempt.
The court rejected that argument and followed the weight of authority requiring a CBA to satisfy section 514 with respect to all covered employees before the exemption applies to a particular employee. It therefore found that the overtime and minimum-wage claims arose from state law rather than the CBAs. The associated PAGA allegations concerning wage statements, wages due at termination, and timely wages likewise were not preempted at step one because defendants' argument depended on preemption of the overtime and minimum-wage claims.
At step two, the court found no preemption of the meal-and-rest-period claims. Rhynes alleged failures to provide breaks required by the Labor Code and applicable wage order, not a dispute over the meaning of CBA break rules; the court also noted that meal periods are nonnegotiable under California law. His section 2802 expense claim, including personal-cell-phone costs, similarly required at most consulting CBA provisions. The complaint did not identify specific CBA-required reimbursements, and defendants pointed to no active interpretive dispute. The court consequently held that defendants had not established section 301 preemption or federal subject-matter jurisdiction.
Key Takeaways
- The court granted Rhynes's motion, directed the Clerk to remand the case to the Superior Court of California, County of Sacramento, and ordered the federal case closed.
- The court held that the CBAs could not use section 514 to establish preemption of the overtime and minimum-wage claims when the agreements did not satisfy the exemption's requirements with respect to all covered employees.
- The wage-statement, termination-pay, and timely-wage PAGA allegations were not preempted at Curtis step one because defendants' derivative-preemption argument rested on the unsuccessful overtime and minimum-wage argument.
- Meal-and-rest-period and section 2802 reimbursement claims were not preempted merely because the CBAs addressed related subjects; the court found no active dispute requiring interpretation of contract terms.
- The removing defendants' failure to establish preemption of the predicate Labor Code claims meant that the court lacked subject-matter jurisdiction over the PAGA action.
Why It Matters
The order applies an all-covered-employees reading of section 514 in the removal context, citing Renteria-Hinjosa v. Sunsweet Growers, Inc. and its Ninth Circuit affirmance. It rejects the position that an employee whose own pay exceeds the statutory threshold remains subject to the exemption even when other covered classifications fall below it.
The decision also illustrates the narrow scope of Curtis step two. CBA provisions concerning breaks or particular reimbursements do not themselves establish preemption when the pleaded claims enforce state-law requirements and resolving them would, at most, involve consulting the agreements. The result was a jurisdictional remand, not a decision on whether defendants committed the alleged Labor Code violations.