Williams v. Winco Holdings, Inc.

          ORDER DENYING DEFENDANTS' MOTION TO DISMISS AND REMANDING MATTER TO THE STANISLAUS COUNTY SUPERIOR COURT FOR LACK OF SUBJECT MATTER JURISDICTION (DOC. NOS. 8 AND 13)

         On January 15, 2016, plaintiff Keith Williams filed the instant action in the Stanislaus County Superior Court, alleging a single cause of action for wrongful termination in violation of public policy. (Doc. No. 3-1, at 4-8.) Plaintiff alleges that his right to privacy under Article 1, Section 1 of the California Constitution was violated when defendants terminated his employment on their night stocking crew after he failed a random drug test. (Id. at 6-7.) On April 11, 2016, defendants removed the action to federal court on the basis of federal question jurisdiction pursuant to § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. (Doc. Nos. 1 and 2.) On April 18, 2016, defendants moved to dismiss the complaint under Federal Rule of Civil Procedure ("Rule") 12(b)(6) on the grounds that plaintiff's claim is completely preempted by § 301 of the LMRA, and that he failed to exhaust his claim pursuant to the procedures of the LMRA. (Doc. No. 8-1, at 2.) Plaintiff argues that his claim is not preempted because a state law claim is only preempted by § 301 when its resolution requires the interpretation of, as opposed to merely a reference to, a collective bargaining agreement. (Doc. No. 11, at 6-7) (citing Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 690 (9th Cir. 2001) and Lingle v. Norge, 486 U.S. 399 (1988)).

         On May 17, 2016, defendant's motion to dismiss came on for hearing before the court.^[1]Attorney Kristina Launey appeared telephonically on behalf of defendants and attorney Jeremy Pasternak appeared telephonically on behalf of plaintiff. Having considered the arguments of the parties and for the reasons set forth below, defendants' motion to dismiss will be denied and the action remanded back to Stanislaus County Superior Court due to lack of subject matter jurisdiction.

         I. Judicial Notice of Collective Bargaining Agreements

         Defendants request that the court take judicial notice of two collective bargaining agreements ("CBA") - WinCo Foods #21 Hourly Employee Working Conditions and Wages Agreements - which were in effect during plaintiff's employment with WinCo. (Doc. No. 9.) The court "may take judicial notice of a CBA in evaluating a motion to dismiss . . . [as] such documents properly are considered . . . materials ‘not subject to reasonable dispute' because they are ‘capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.'" Jones v. AT & T, No. C 07-3888 JF, 2008 WL 902292, *2 (N.D. Cal. Mar. 31, 2008). See also Densmore v. Mission Linen Supply, 2016 WL 696503, at *4 (E.D. Cal. Feb. 22, 2016) (taking judicial notice of CBAs where necessary to resolve issues of preemption). Therefore, the court will take judicial notice of the two CBAs.

         II. Legal Standards

         A. Preemption under Section 301 of the LMRA

         Section 301 of the LMRA, codified at 29 U.S.C. § 185(a), 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 . . .

         The Supreme Court has recognized that the LMRA "does more than confer jurisdiction in the federal courts over labor organizations. It expresses a federal policy that federal courts should enforce these agreements on behalf of or against labor organizations and that industrial peace can be best obtained only in that way." Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448, 456-57 (1957). See also Local 174, Teamsters of Am. v. Lucas Flour Co., 369 U.S. 95, 103-04 (1962) ("The dimensions of § 301 require the conclusion that substantive principles of federal labor law must be paramount in the area covered by the statute."). As a result, because "[a]n action arising under § 301 is controlled by federal substantive law even though it is brought in state court, " the Supreme Court has deemed it proper for such cases to be removed to federal court under federal question jurisdiction. Avco Corp. v. Aero Lodge No. 375, Int'l. Ass'n of Machinists & Aerospace Workers, 390 U.S. 557, 560 (1968).

         Section 301 preemption subsequently expanded "beyond cases specifically alleging contract violation to those whose resolution is ‘substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract.'" Cramer, 255 F.3d at 689 (citing Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985)). "The preemptive force of § 301 is so powerful as to displace entirely any state cause of action ‘for violation of contracts between an employer and a labor organization.'" Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 23 (1983). "Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301." Id.

         Nevertheless, "not every dispute concerning employment, or tangentially involving a provision of a [CBA], is preempted by § 301 or other provisions of the federal labor law." Allis-Chalmers, 471 U.S. at 211. In Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987), the Supreme Court clarified that § 301 preemption applies only to "claims founded directly on rights created by collective-bargaining agreements, and claims ‘substantially dependent on analysis of a collective-bargaining agreement.'" Id. at 394 (quoting Franchise Tax Bd., 463 U.S. at 23). In that case the Supreme Court also explicitly rejected the argument that "all employment-related matters involving unionized employees be resolved through collective bargaining and thus be governed by a federal common law created by § 301." Id. at 396, n.10 (internal citations omitted).

         In Burnside v. Kiewit Pacific Corp., 491 F.3d 1053, 1060 (9th Cir. 2007), the Ninth Circuit set forth a two-part analysis for determining whether a plaintiff's claim is preempted by § 301. First, a court must "determine whether a particular right inheres in state law or, is instead grounded in a CBA." Id. "If the right exists solely as a result of the CBA, then the claim is preempted, and [ ] analysis ends there." Burnside, 491 F.3d at 1059. However, if the claim exists independently from the CBA, the court must still decide whether it is "‘substantially dependent' on the terms of a CBA" by determining "whether the claim can be resolved by ‘looking to' versus interpreting the CBA." Id. at 1060 (citing Caterpillar, 482 U.S. at 394 and Livadas v. Bradshaw, 512 U.S. 107, 125 (1994)). If the claim requires interpretation of the CBA, the claim is preempted; if the claim merely requires "looking to" the CBA, it is not preempted. Id.

         The first step of the Burnside analysis described above requires the court to "consider the legal character of a claim, as ‘independent' of rights under the collective-bargaining agreement [and] not whether a grievance arising from ‘precisely the same set of facts' could be pursued." Id. at 1059-60 (quoting Livadas, 512 U.S. at 123). The second step of the analysis requires the court to determine whether the claimed rights are "substantially dependent" on the analysis of the CBA. The court in Burnside clarified that a defense relying on the terms in a CBA is "not enough to ‘inject[ ] a federal question into an action that asserts what is plainly a state-law claim.'" Id. at 1053 (quoting Caterpillar, 482 U.S. at 398-99).^[2] See also Humble v. Boeing Co., 305 F.3d 1004, 1011 (9th Cir. 2002) ("reliance on CBA provisions to defend against an independent state law claim does not trigger § 301 preemption."). The "‘look to'/‘interpret' distinction" in the second step of the analysis has been recognized as "not a task that always lends itself to analytical precision." Id. at 1060. See also Cramer, 255 F.3d at 691. Of course, "when the meaning of the contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require that" the state law claim is preempted. Livadas, 512 U.S. at 124. See also Valles v. Ivy Hill Corp., 410 F.3d 1071, 1076 (9th Cir. 2005); Ward v. Circus Circus Casinos, Inc., 473 F.3d 994, 998 (9th Cir. 2007); Aguilera v. Pirelli Armstrong Tire Corp., 223 F.3d 1010, 1014 (9th Cir. 2000). Moreover, "‘[§] 301 does not permit parties to waive, in a collective-bargaining agreement, nonnegotiable state rights' conferred on individual employees." Valles, 410 F.3d at 1076 (quoting Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1111 (9th Cir. 2000)). "Thus, in order for complete preemption to apply, ‘the need to interpret the CBA must inhere in the nature of the plaintiff's claim. If the claim is plainly based on state law, § 301 preemption is not mandated simply because the defendant refers to the CBA in mounting a defense.'" Id. (quoting Cramer, 255 F.3d at 691). See also Ward, 473 F.3d at 998 (the "determinative question is whether the state law factual inquiry . . . turn[s] on the meaning of any provision of the collective-bargaining agreement.").

         The Ninth Circuit's decision in Cramer is instructive. There, the court addressed the appropriate considerations in determining if a state law claim required the court to "interprets" or merely "refer to" a CBA in a case presenting the issue of whether a plaintiff's state law claims for invasion of privacy and intentional infliction of emotional distress were preempted under § 301. 255 F.3d at 688. The court held that the CBA at issue in that case could not have "contemplate[d] the surreptitious videotaping plaintiffs challenge[d] in their state law claims . . . [because] § 301 does not grant the parties . . . the ability to contract for what is illegal under state law." Id. at 694-95. In reviewing the Supreme Court's decisions in Allis-Chalmers, Lingle, and Livada, the court found that preemption under § 301 was not appropriate where "the legal character of a claim [is] ‘independent' of rights under the collective bargaining agreement . . . [and] the bare fact that a collective bargaining agreement will be consulted" does not extinguish the claim. Id. at 690-91. Thus, the court concluded where a claim involves the "employer's alleged failure to comport with its contractually established duties, " it is preempted. Id. However, "if the claim may be litigated without reference to rights and duties established" in a collective bargaining agreement, it is not preempted. Id. The court noted that "the plaintiff's claim is the touchstone for this analysis . . . [and] the need to interpret the CBA ...