Melendez v. San Francisco Baseball Assocs. LLC
Melendez v. San Francisco Baseball Assocs. LLC
Opinion
*5 Under California's labor laws, "[i]f an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately." ( Lab. Code, § 201, subd. (a).) Plaintiffs, security guards at what used to be named AT & T Park in San Francisco and is now named Oracle Park (the park), are suing San Francisco Baseball Associates LLC (the Giants) for allegedly violating this provision. They claim they are discharged after every Giants homestand, at the end of the baseball season, and after other events at the park, and they are entitled under Labor Code section 201 to receive their unpaid wages immediately after each such discharge. The Giants deny that the security guards are discharged on those occasions. They contend that Labor Code section 204, which generally requires semimonthly payment of employees' wages, applies to the guards.
*290
The merits of this action are not now before us. Rather, we must consider the Giants' contention that this lawsuit requires interpretation of the collective bargaining agreement (hereafter sometimes CBA) that the guards' union has entered into with the Giants. If so, this lawsuit is preempted under federal law and must be submitted to arbitration. (See, e.g.,
Livadas v. Bradshaw
(1994)
We conclude that, although the agreement between the union and the Giants may be relevant to this lawsuit and may need to be consulted to resolve it, the parties' dispute turns on an interpretation of state law - namely, the meaning of "discharge" under Labor Code section 201 - rather than an interpretation of the agreement itself. Because no party has identified any provision of the agreement whose meaning is uncertain and that must be interpreted to resolve plaintiffs' claim, this lawsuit is not preempted and state *6 courts may decide it on the merits. We reverse the judgment of the Court of Appeal, which concluded otherwise.
I. FACTUAL AND PROCEDURAL HISTORY
We draw these facts, which are generally undisputed, primarily from the Court of Appeal opinion. (
Melendez v. San Francisco Baseball Associates LLC
(2017)
George Melendez, a security guard at the park, is the lead plaintiff in this putative class action against the Giants. He "contends that he and other security guards were employed 'intermittingly' for specific job assignments
**767
(baseball games or other events) and were discharged 'at the end of a homestand, at the end of a baseball season, at the end of an inter-season event like a fan fest, college football game, a concert, a series of shows, or other events,' and that therefore under Labor Code section 201 [they] were entitled to but did not receive immediate payment of their final wages upon each such 'discharge.' " (
Melendez
,
supra
, 16 Cal.App.5th at p. 341,
The Giants contend that the "security guards are not intermittent employees but are 'year-round employees who remain employed with the Giants until they resign or are terminated pursuant to the CBA.' " (
Melendez
,
supra
, 16 Cal.App.5th at p. 341,
As relevant here, the Giants moved to compel arbitration, arguing that the action is preempted by the Labor Management Relations Act of 1947. The trial court denied the motion. It "held that resolution of the controversy does not require interpretation of the CBA, but simply a determination of whether the security guards are discharged within the meaning of Labor Code section 201 at the conclusion of an event or series of baseball games." (
Melendez,
The Court of Appeal agreed with the Giants and reversed the order denying the motion to compel arbitration. It explained that, "[a]lthough no provision of the CBA provides an explicit answer, the duration of the employment relationship must be derived
*291
from what is implicit in the agreement."
*7
(
Melendez
,
We granted plaintiffs' petition for review limited to the question of whether this action is preempted because it requires interpretation of a collective bargaining agreement.
II. DISCUSSION
Section 301(a) of the Labor Management Relations Act of 1947 (
"In a series of opinions, the Supreme Court concluded that § 301's jurisdictional grant required the 'complete preemption' of state law claims brought to enforce collective bargaining agreements." (
Balcorta v. Twentieth Century-Fox Film Corp.
(9th Cir. 2000)
After reviewing the high court opinions that developed the preemption rule, the
Balcorta
court explained that "[a]lthough the language of § 301 is limited to '[s]uits for violation of contracts,' courts have concluded
*292
that, in order to give the proper range to § 301's policies of promoting arbitration and the uniform interpretation of collective bargaining agreement provisions, § 301 'complete preemption' must be construed to cover 'most state-law actions that require interpretation of labor agreements.' [Citations.] One reason for expanding complete preemption beyond the textual confines of § 301 is that any claim the resolution of which requires the interpretation of a collective bargaining agreement presents some risk to the policy of uniformity if state law principles are employed in that interpretation, even if the claim is not one for breach of contract. [Citing
Lingle
,
supra
, 486 U.S. at pp. 405-406 [
Critically,
Balcorta
also explained that "[t]here is another strand to this aspect of federal labor law, however. Despite the breadth of § 301 complete preemption, 'not every claim which requires a court to refer to the language of a labor-management agreement is necessarily preempted.' [Citation.] In order to help preserve state authority in areas involving minimum labor standards, the Supreme Court has distinguished between claims that require interpretation or construction of a labor agreement and those that require a court simply to 'look at' the agreement. See
Livadas
,
supra
,
*9
"Preemption does not arise when interpretation is required only by a defense. [Citing
Caterpillar Inc. v. Williams
(1987)
The high court has also said that preemption applies "when resolution of a state-law claim is substantially dependent
*293
upon analysis of the terms of an agreement made between the parties in a labor contract." (
Allis-Chalmers
,
supra
, 471 U.S. at p. 220,
These concepts are not bright lines. " '[T]he line between reference to and interpretation of an agreement may be somewhat hazy' " ( Balcorta , supra , 208 F.3d at p. 1108 ), and " '[s]ubstantial dependence' on a CBA is an inexact concept, turning on the specific facts of each case ...." ( Cramer , supra , 255 F.3d at p. 691.) But "the totality of the policies underlying § 301 - promoting the arbitration of labor contract disputes, securing the uniform interpretation of labor contracts, and protecting the states' authority to enact minimum labor standards - guides our understanding of what constitutes 'interpretation.' " ( Balcorta , at pp. 1108-1109.)
As an overarching principle, the high court has also "emphasized that 'pre-emption should not be lightly inferred in this area, since the establishment of labor standards falls within the traditional police power of the State.' " (
Lingle
,
supra
, 486 U.S. at p. 412,
Sciborski
summarized the analytical process a court should use to apply these principles. "Under section 301 preemption analysis, it is helpful
*10
to apply a two-part test to determine whether a claim is preempted. First, the court should evaluate whether the claim arises from independent state law or from the collective bargaining agreement. If the claim arises from the collective bargaining agreement, the claim is preempted as a matter of law. [Citation.] However, if the claim arises from independent state law, the court must then proceed to the second step. In this step, the court determines whether the claim requires 'interpretation or construction of a labor agreement,' or whether a collective bargaining agreement will merely be 'reference[d]' in the litigation. [Citations.] A state law claim is preempted if a court must
interpret
a disputed provision of the collective bargaining agreement to determine whether the plaintiff's state law claim has merit." (
Sciborski
,
supra
, 205 Cal.App.4th at p. 1164,
The first step in this analytical process is easy in this case. Plaintiffs' claim arises solely from independent state law - Labor Code section 201 - and is not based on the collective bargaining agreement.
Because the difference between interpreting and merely referencing a collective bargaining agreement is inherently " 'hazy' " ( Balcorta , supra , 208 F.3d at p. 1108 ), the second step is more difficult. But, bearing in mind that preemption should not be lightly inferred because establishing *294 minimum labor standards comes within a state's traditional police power, we conclude this **770 lawsuit is not preempted. The parties' dispute turns on an interpretation of California's independent labor laws, not on an interpretation of the collective bargaining agreement.
As noted, Labor Code section 201, subdivision (a), provides, "If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately." In
Smith v. Superior Court
(2006)
In reaching this conclusion, we noted that a "commonly understood meaning of 'discharge' includes the action of an employer who, having hired an employee to work on a particular job or for a specific term of service, formally releases the employee and ends the employment relationship at the point the job or service term is deemed complete." (
Smith
,
supra
, 39 Cal.4th at p. 84,
The parties debate at length how
Smith
,
supra
,
*295 These are credible arguments, and they will have to be considered when the trial court resolves the merits of this lawsuit on remand. But they are arguments concerning the meaning of "discharge" under Labor Code section 201, not concerning the meaning of the collective bargaining agreement. The parties have pointed us to no disagreement concerning the meaning of any provision of the agreement.
*12
Closely on point is
Balcorta
,
supra
,
Balcorta concluded that the collective bargaining agreement in that case had to be consulted but not interpreted. "Although the provisions do detail fairly complicated procedures and contain a hefty dose of industry jargon, their meaning is neither uncertain nor ambiguous. A court may be required to read and apply these provisions in order to determine whether an employee was discharged from his 'call' at the end of his shift, but no interpretation of the provisions would be necessary." ( Balcorta , supra , 208 F.3d at pp. 1109-1110.) "[D]etermining whether Balcorta was discharged does not require a court to interpret the collective bargaining agreement ..., and thus does not render Balcorta's claims subject to complete preemption." ( Id . at p. 1110.)
Balcorta also explained that labor law rights such as that under Labor Code former section 201.5, are not negotiable and that section "301 does not permit parties to waive, in a collective bargaining agreement, nonnegotiable state rights ...." ( Balcorta , supra , 208 F.3d at p. 1111 ; see Lab. Code, § 219 ["no provision of this article can in any way be contravened or set aside by a private agreement, whether written, oral, or implied"].) Accordingly, the collective bargaining agreement did not have to be interpreted to determine whether it waived the right to timely payment of wages under state law. ( Balcorta, at pp. 1111-1112.)
Although this case involves Labor Code section 201, not Labor Code former section 201.5, we believe the same result applies. The collective bargaining agreement must be consulted or referenced, but not interpreted. Nor is resolution of the state law claim "substantially dependent upon analysis of the terms of" the collective bargaining agreement. (
Allis-Chalmers
,
supra
, 471 U.S. at p. 220,
The Court of Appeal in this case concluded that plaintiffs' claim was preempted based on "inferences ... drawn" from several provisions of the collective bargaining agreement. (
Melendez
,
supra
, 16 Cal.App.5th at p. 346,
Our finding that the action is not preempted is consistent with the policies underlying section 301(a). Allowing a state court to interpret Labor Code section 201 does not threaten the policies of "promoting the arbitration of labor contract disputes" or "securing the uniform interpretation of labor contracts." ( Balcorta , supra , 208 F.3d at pp. 1108-1109.) But, importantly, it does "protect[ ] the states' authority to enact minimum labor standards." ( Id . at p. 1109.) It is up to state courts, not an arbitrator, to interpret state labor law standards applicable to all workers.
We express no view on the parties' interpretations of Labor Code section 201 or the ultimate merits of this lawsuit, which are not before us in this appeal from the denial of the motion to compel arbitration, and on which no court has yet ruled. We hold only that section 301(a) does not preempt this lawsuit. The merits will have to be resolved when the matter is remanded to the trial court.
III. CONCLUSION
The trial court correctly denied the motion to compel arbitration. Accordingly, we reverse **772 the judgment of the Court of Appeal and remand the matter to that court for further proceedings consistent with this opinion.
We Concur:
CANTIL-SAKAUYE, C. J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.