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VICEROY GOLD CORP. v. AUBRY

July 21, 1994

VICEROY GOLD CORPORATION, a Delaware Corporation, Plaintiff,
v.
LLOYD W. AUBRY Jr., as Director of the Department of Industrial Relations for the State of California, and VICTORIA BRADSHAW, as Labor Commissioner for the State of California, in their Official capacities only; and CALIFORNIA STATE DEPARTMENT OF INDUSTRIAL RELATIONS, DIVISION OF LABOR STANDARDS ENFORCEMENT, inclusive, Defendants.



The opinion of the court was delivered by: WALKER

 Plaintiff Viceroy Gold Corporation ("Viceroy") operates a gold processing facility in San Bernardino County called the Castle Mountain Mine ("Castle Mountain"). Castle Mountain is a non-union mine employing workers who operate equipment to recover gold ore from rock. The ore processing is performed by complex machinery utilizing a substantially automated procedure. Witt Decl in Supp at PP 4-6.

 Castle Mountain operates twenty-four hours a day, seven days a week, using rotating shifts. The mine workers currently work eight-hour shifts and forty-hour work weeks. Because housing near the facility is limited, many of the mine workers commute seventy-five miles or more to the mine from Las Vegas, Nevada and its environs. Many workers spend three hours a day commuting to and from work on highways that are narrow and unsafe. During the last two years, two employees of Castle Mountain sub-contractors died in auto accidents during their commutes. Witt Decl in Supp at P 10.

 The vast majority of Viceroy's employees at Castle Mountain have expressed dissatisfaction with the eight-hour work day; they prefer twelve-hour shifts. In October 1992, thirty-two out of thirty-two employees involved in a secret ballot vote elected to switch to a twelve-hour work shift. Witt Decl in Supp at P 21. Twelve-hour shifts would reduce work weeks from five to four days. With a four-day work week, mine workers at Castle Mountain would reduce total commuting times and be able to spend more time with their families and in other pursuits.

 Although Viceroy is willing to implement twelve-hour work shifts, the State of California's Division of Labor Standards Enforcement ("DLSE") has prohibited Viceroy's workers from working shifts longer than eight hours. DLSE bases its prohibition upon Cal Labor Code sections 750 and 750.5. Section 750 was enacted in 1909 and states, in pertinent part:

 
(a) Underground mines or underground workings.
 
(b) Smelters and plants for the reduction or refining of ores or metals.

 Cal Lab Code § 750. In 1983, the California Legislature amended section 750 by adding section 750.5. That provision created an exception to the eight-hour shift limitation mandated by section 750:

 
The provisions of Section 750 shall not prohibit a period of employment up to 12 hours within a 24-hour period when the employer and a labor organization representing employees of the employer have entered into a valid collective-bargaining agreement where the agreement expressly provides for the wages, hours of work, and working conditions of the employees.

 Cal Lab Code § 750.5.

 The DLSE held that the Castle Mountain facility was a plant "for the reduction or refining of ores and metals" covered by section 750. Because Castle Mountain is not a unionized mine, the DLSE ruled that the exception created by section 750.5 for workers covered by a "valid collective bargaining agreement" did not apply. Viceroy was therefore barred from implementing work shifts in excess of eight hours.

 According to Viceroy, the eight-hour shift limitation has led to severe employee morale problems at Castle Mountain and has caused at least two employees to quit their jobs at the mine. Additionally, Viceroy claims that section 750.5 puts Castle Mountain at a competitive disadvantage against in-state unionized mines and nearby mines located in Nevada in recruiting qualified mine workers because those mines can schedule longer shifts for their employees. After making two unsuccessful attempts to convince the DLSE to allow Viceroy to implement longer shifts, Viceroy filed this action against various state labor officials and the California State Department of Industrial Relations, Division of Labor Standards Enforcement (collectively referred to as the "state") for declaratory and injunctive relief.

 The complaint alleges six grounds for relief:

 
(1) as a matter of legislative intent and statutory construction, section 750 was not meant to apply to modern facilities like Castle Mountain;
 
(2) section 750.5 is preempted by the National Labor Relations Act ("NLRA"), 29 USC §§ 151, et seq, as amended, under the principle enunciated in Machinists v Wisconsin Employment Relations Comm'n, 427 U.S. 132, 49 L. Ed. 2d 396, 96 S. Ct. 2548 (1976);
 
 
(3) section 750.5 is preempted by the NLRA under the principle articulated in San Diego Building Trades Council v Garmon, 359 U.S. 236, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959);
 
(4) section 750.5 is preempted by section 301 of the Labor Management Relations Act ("LMRA"), 29 USC §§ 141, et seq, as amended;
 
(5) section 750.5 is preempted by the Employee Retirement Income Security Act ("ERISA"), 29 USC §§ 1001, et seq; and
 
(6) section 750.5 violates the Equal Protection Clause of the United States Constitution.

 Viceroy's first claim seeks to escape the eight-hour shift limitation altogether. The other five claims specifically attack the validity of the section 750.5 union exception to the eight-hour shift limitation created by section 750.

 Viceroy now moves for summary judgment on all of its claims for relief. The state cross-moves for summary judgment on Viceroy's ERISA and LMRA preemption claims. The parties agree that these motions are based solely upon questions of law. For convenience, the court addresses the state's motion for summary judgment on Viceroy's LMRA and ERISA preemption claims before taking up Viceroy's motions. In connection with the latter, of course, the court will first consider Viceroy's standing to assert the claims at issue and then address the merits of those claims.

 The court's ruling, however, has no impact on the general eight-hour shift limitation of section 750, which remains operative. In essence, the court's invalidation of the section 750.5 union exception has the practical effect of reinstating the eight-hour shift limitation on union mine workers. Non-unionized mine workers, including Viceroy's employees, continue to be prohibited by section 750 from working shifts greater than eight hours.

 This outcome may not completely satisfy any party or unionized mine workers in California. Nevertheless, it harmonizes the conflicting legal principles at issue in this case. The NLRA prohibits a state from conferring state benefits in a manner creating substantial incentives for employees to unionize or not to unionize. Because the section 750.5 union exception to the general eight-hour shift limitation of section 750 does just that, it is preempted. The less than desirable practical consequences of this outcome must be dealt with - if at all - by the California legislature.

 I

 The parties both move for summary judgment on Viceroy's LMRA and ERISA preemption claims. The court will address these cross-motions first.

 A

 The parties cross-move for summary judgment on Viceroy's claim that section 301 of the LMRA, 29 USC § 185(a), preempts section 750.5. Section 301 states, in relevant part:

 
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce * * * may be brought in any district court of the United States having jurisdiction of the parties * * *.

 29 USC § 185(a). The scope of federal preemption under section 301 is defined in several key Supreme Court cases. In Teamsters v Lucas Flour Co, 369 U.S. 95, 103-04, 82 S. Ct. 571, 7 L. Ed. 2d 593 (1962), the Court held that "a suit in state court alleging a violation of a provision of a labor contract must be brought under § 301 and be resolved by reference to federal law." Allis-Chalmers Corp v Lueck, 471 U.S. 202, 210, 85 L. Ed. 2d 206, 105 S. Ct. 1904 (1984) (explaining Lucas Flour). In Allis-Chalmers, an employee brought a state law tort action against an employer for bad faith delay in handling benefits payable under a collective bargaining agreement. The Court held the state-tort bad faith breach action was preempted because it "purport[ed] to define the meaning of the contract relationship" between the parties and was "inextricably intertwined" with the interpretation of the collective bargaining agreement. Id at 213. "Questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement must be resolved by reference to uniform federal law, whether such questions arise in the context of a suit for breach of contract or in a suit alleging liability in tort." Id at 211. In essence, the Allis-Chalmers Court held that the employee's tort claim was for enforcement of the terms of a labor contract. The state tort claim was therefore preempted by § 301.

 Collectively, Lucas Flour and Allis-Chalmers require contract disputes involving collective bargaining agreements and the interpretation of collective bargaining agreements to be resolved by reference to uniform federal labor law. The purpose of section 301 preemption is to ensure uniformity and predictability in the collective bargaining process. Lucas Flour, 369 U.S. at 103-104; Allis-Chalmers, 471 U.S. at 211.

 Viceroy claims section 750.5 is preempted by section 301 of the LMRA. Citing Allis-Chalmers, Viceroy argues that because the section 750.5 union exception only applies to workers covered by a "valid collective bargaining agreement," the state's application of that exception is "inextricably intertwined" with the terms of a collective bargaining agreement. Viceroy's reliance on LMRA preemption is misplaced.

 By its express terms, section 301 only applies to "suits for the violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce." 29 USC § 185. Unlike Allis Chalmers and Lucas Flour, this suit is not one for enforcement of the terms of a collective bargaining agreement. In this suit, Viceroy seeks to invalidate a state statute allegedly conferring a benefit on unionized mines and mine workers unavailable to non-unionized mines and mine workers. As the court noted above, section 301 preemption ensures that rights bargained for under the federally established collective bargaining process will be consistently interpreted and not subjected to different interpretations by the states. This federal interest in uniformity of labor contract interpretation has no application to Viceroy because Viceroy does not have a collective bargaining agreement to interpret.

 Accordingly, Viceroy's LMRA preemption claim fails as a matter of law. The state's motion for summary judgment on Viceroy's section 301 preemption claim is hereby GRANTED and Viceroy's motion for summary judgment on that claim is hereby DENIED.

 B

 Viceroy also claims section 750.5 is preempted by ERISA. That comprehensive federal statute is "designed to promote the interests of employees and their beneficiaries in employee benefit plans." Shaw v Delta Air Lines, Inc, 463 U.S. 85, 90, 77 L. Ed. 2d 490, 103 S. Ct. 2890 (1983). Pursuant to 29 USC § 1144, ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan * * * ." Section 750.5 grants an exception to the eight-hour shift limitation of section 750 to workers covered by a "valid collective-bargaining agreement where the agreement expressly provides for the wages, hours of work, and working conditions of the employees." Viceroy claims the requirement that the collective bargaining agreement provide for "working conditions of the employees" necessarily relates to employee benefit plans and therefore implicates ERISA preemption. Even if there were some merit to this strained interpretation of section 750.5 and ERISA, Viceroy lacks standing to bring a claim of ERISA preemption.

 It is axiomatic that unless plaintiff has standing to sue under Article III of the United States Constitution, there can be no case or controversy cognizable in the federal courts. See Allen v Wright, 468 U.S. 737, 750, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984). To have standing, a plaintiff must first show injury-in-fact which is "actual or imminent, not 'conjectural' or ...


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