(Super. Ct. No. 37-2008-00081581- CU-OE-CTL) APPEALS from a judgment of the Superior Court of San Diego County, Frederic L. Link, Judge. Affirmed.
The opinion of the court was delivered by: Haller, J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
Annie Sciborski sued her former employer, Pacific Bell Directory (Pacific Bell), challenging Pacific Bell's actions in deducting approximately $19,000 from her wages to recover a $36,000 sales commission paid to her. After a three-day trial, a jury found Pacific Bell's wage deductions violated Labor Code section 221 and resulted in Sciborski's constructive discharge in violation of public policy. The jury awarded Sciborski $36,000 in lost earnings, but found Sciborski did not prove her claimed future economic loss and emotional distress damages. The court awarded Sciborski attorney fees based on her prevailing on the Labor Code section 221 claim.
Pacific Bell appeals, contending Sciborski's claims were preempted by federal law under section 301 of the Labor Management Relations Act (section 301). (29 U.S.C. § 185.) Pacific Bell maintains Sciborski's claims are preempted because she was a union member governed by a collective bargaining agreement and a consideration of her claims required the court to interpret this agreement. We reject this contention. Sciborski's claims are not preempted because they arose from independent state law and did not require the interpretation of the collective bargaining agreement.
In Pacific Bell's appeal and Sciborski's cross-appeal, each party challenges the attorney fees award. Pacific Bell contends Sciborski was not entitled to the fees and the amount awarded was unreasonable. Sciborski contends the court erred in refusing to apply a multiplier to increase the award. In the unpublished portion of the opinion, we reject these challenges. Sciborski was entitled to recover attorney fees on her statutory claim and the court did not abuse its discretion in finding the amount was reasonable on the record before it.
FACTUAL AND PROCEDURAL SUMMARY
Because this appeal involves primarily the legal preemption question, we focus our factual summary on the facts necessary to decide this issue. We view the facts in the light most favorable to Sciborski, the party prevailing at trial. Additional facts will be set forth when discussing the legal issues.
In October 2005, Sciborski began working as a sales representative at Pacific Bell, selling advertising for Pacific Bell's Yellow Pages. She was a member of the International Brotherhood of Electrical Workers, AFL-CIO Local Union 2139 (Union), and the terms and conditions of her employment were governed by the collective bargaining agreement (CBA) between Pacific Bell and the Union.
Pursuant to the CBA, Sciborski was paid a basic weekly salary and a commission on completed sales. The CBA sets forth detailed rules governing commissions, including that "commissions are earned by employees only when the final commission rate and contract price applicable to a sale are determined by the Company, and all of the conditions to earn commissions have been satisfied." The CBA further provides that "[u]ntil the commissions are earned, any commission payments made to employees . . . are advances to be applied against employees' future earned commissions."*fn2 (Italics added.)
In 2006 and 2007, Sciborski was assigned to customers in the "North County Coastal" and "North County Inland" geographic areas. However, when another employee went on a leave of absence, Sciborski (and several other employees) volunteered to also work for customers in the "San Diego Metro" area. In April 2007, Pacific Bell assigned Sciborski to a Metro area business customer, Expert Home Services, which was known as a "new connect" because it was a new telephone customer. New customer assignments are valuable because they are more likely to generate new business. Pacific Bell assigned the account to Sciborski in her "primary" module.
Sciborski initially sold an average size advertisement to Expert Home Services, and received a commission check of about $800. That commission has never been challenged. Several months later, in the summer of 2007, Sciborski sold a much larger advertising campaign to Expert Home Services for approximately $24,000 per month. The contract was signed and the sale closed in September 2007. In November 2007, the Expert Home Services advertisement was published and Pacific Bell received full compensation from Expert Home Services for the advertisement.
Sciborski and her supervisor (Pacific Bell's sales manager) reviewed the sale and the supervisor confirmed that Sciborski had been the sole salesperson on the account and there was nothing in the records showing she would not be entitled to the full commission ($36,000). Sciborski thus entered the sale in the computer system, and requested the commission be paid. However, several days later, Sciborski's supervisor told Sciborski that Christine McCormick (a union official) had raised questions about her entitlement to the sales commission. McCormick said she intended to "look" into the sale because there was " 'no way' " Sciborski " 'could have sold that.' "
Shortly after, Pacific Bell paid Sciborski $36,000 for the commission (after taxes she received about $17,000).
The Union thereafter formally protested the commission, arguing the account was improperly assigned to Sciborski because she was a "loaned" representative to the account. Pacific Bell thereafter notified Sciborski that there had been a clerical or computer error and she should not have been assigned the Expert Home Services account. Pacific Bell also notified her that management and Union representatives had made a decision "they were going to take the account and commission away from [her] and spread . . . the commission[ ] across the floor [divide the $36,000 among all of the Metro area salespersons]."
Shortly after, Pacific Bell began making deductions from Sciborski's wages to recover the amount of the commission. Over Sciborski's protests, Pacific Bell eventually charged back $19,573.78 from Sciborski's paychecks and also deducted additional funds from her 401K account. Although Sciborski contacted her Union representatives, they declined to take any action on her behalf, particularly because the Union had initiated the challenge to the sales commission.
On April 2, 2008, Sciborski resigned from her employment to prevent Pacific Bell from making additional deductions from her paychecks.
Complaint and Pretrial Proceedings
Soon after resigning, Sciborski filed a complaint against Pacific Bell challenging Pacific Bell's deductions from her wages, alleging the deductions: (1) violated applicable wage statutes, including Labor Code section 221; (2) constituted a breach of contract; and (3) resulted in her constructive discharge in violation of public policy. Labor Code section 221 generally prohibits an employer from deducting earned amounts from an employee's wages.
Within two months, Pacific Bell removed the action to the federal district court under section 301's complete preemption doctrine. (See 28 U.S.C. § 1447.) Pacific Bell maintained that Sciborski's claims arose from the breach of a collective bargaining agreement, requiring the application of federal law under section 301, which preempts state law.
Sciborski then moved to remand the case back to the state court, arguing there was no federal removal jurisdiction over the case. Sciborski contended her claims were based on independent rights conferred by California statutes and were not substantially dependent on an interpretation of the collective bargaining agreement.
Pacific Bell opposed the motion arguing that under California law an employer is entitled to deduct wages for commission advances that were not yet "earned," and to determine whether Sciborski had "earned" the $36,000, it was necessary to interpret provisions of the CBA. Before the federal court ruled on the motion, Sciborski dismissed her breach of contract claim. In her reply brief, Sciborski argued that with respect to her two remaining claims there was no federal preemption because her recovery was not dependent on the resolution of disputed language in the CBA.
In an eight-page written order, the district court granted Sciborski's motion and ordered the case remanded to the state court. After setting forth the applicable law, the court ruled that neither the Labor Code section 221 claim nor the constructive discharge claim was preempted by section 301.
On the Labor Code section 221 claim, the district court stated: "Under California law, '[a]n employer may legally advance commissions to its employees prior to the completion of all conditions for payment and, by agreement, charge back any excess advance over commissions earned against any future advance should the conditions not be satisfied.' [Citation.] 'The essence of an advance is that at the time of payment the employer cannot determine whether the commission will eventually be earned because a condition to the employee's right to the commission has yet to occur or its occurrence as yet is otherwise ascertainable." [Citation.] In the case, Defendant's liability under [section] 221 requires a court to determine whether Defendant made deductions from Plaintiff's commissions after 'all of the conditions to earn commission had been satisfied.' This is a factual inquiry and does not require interpretation of the CBA."
On the constructive discharge in violation of public policy claim, the district court found there was no preemption because the claim did not require the court to interpret the CBA and the claim arose "under the public policy of California rather than rights conferred by the CBA."
Four months after the remand, Pacific Bell moved for summary judgment essentially on the same preemption grounds. The court (Judge Charles Hayes) denied the motion, finding there was no federal preemption, reasoning, in part, that Sciborski's statutory claims would not require the court to "interpret or analyze . . . the [CBA]" and "rather [the court] is required to make a factual determination as to whether the disputed commissions were in fact earned."*fn3
Pacific Bell later brought a cross-complaint against Sciborski for breach of contract, seeking the remaining portion of the $36,000 sales commission paid to her.
Summary of Trial Proceedings
At trial, Sciborski testified and presented evidence showing she satisfied all the applicable conditions necessary to earning a sales commission on the Expert Home Services sale and thus argued that Labor Code section 221 prohibited Pacific Bell from deducting the commission from her wages. These applicable conditions included "retir[ing] the sale" (i.e., negotiating and executing the contracts, obtaining artwork approval, and entering all information into the system), the advertisement was printed in the Yellow Pages book, and payment was received from Expert Home Services.
In defense, Pacific Bell did not dispute that Sciborski had performed these tasks and that Sciborski had fully satisfied these conditions to earning a commission on the Expert Home Services sale. Pacific Bell also agreed that if Sciborski had been properly assigned to the account, she would have been entitled to the full $36,000 commission. However, Pacific Bell argued that Sciborski never "earned" the commission because there was a clerical computer error and the account should not have been assigned to her in the first place. Pacific Bell acknowledged that it was responsible for the improper assignment.
Pacific Bell witnesses explained that the Expert Home Services account was not properly assigned to Sciborski because she was a "loaned" salesperson for the Metro-area accounts, and "loaner reps" are not permitted to work on a "new-connect" customer assignment. Pacific Bell also relied on a document entitled "Market Selection Practice," which was incorporated into the CBA and contains detailed rules for employee account assignments. Provisions in the Market Selection document state: "Sales Representatives that are newly assigned, or loaned to a campaign are not eligible for new connects unless they were initially assigned to the campaign and have a full market assignment" and an employee "will be removed from New Connect distribution process when . . . [¶] . . . [¶] . . . loaned to ...