McCray v. Marriott Hotel Services, Inc. et al
Filing
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ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT. Re: Dkt. No. 38 . Signed by Judge Nathanael Cousins. (lmh, COURT STAFF) (Filed on 3/22/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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IAN MCCRAY,
Plaintiff,
United States District Court
Northern District of California
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v.
MARRIOTT HOTEL SERVICES, INC.,
et al.,
Case No. 16-cv-02092 NC
ORDER GRANTING DEFENDANTS’
MOTION FOR SUMMARY
JUDGMENT
Re: Dkt. No. 38
Defendants.
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In this employment case, plaintiff Ian McCray asserts that his former employer,
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defendant Marriott Hotel Services, failed to pay the San Jose minimum wage in
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compliance with a municipal wage ordinance. A collective bargaining agreement governs
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McCray’s employment, and the CBA provides for a waiver of the San Jose minimum wage
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ordinance. In addition, the San Jose ordinance appears to provide a waiver for CBAs. In
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order to determine if Marriott’s admittedly low hourly rate was lawful, the Court must first
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assess which law to apply to this dispute. Defendants Marriott Hotel Services and SJMEC
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Inc. argue that CBAs are governed by federal law, so federal preemption applies, and the
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Court should begin its analysis with the provisions of the Labor Management Relations
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Act (LMRA). McCray argues that his complaint is based on violations of municipal law,
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so the Court must begin its inquiry by interpreting the San Jose minimum wage ordinance.
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The Court considered these questions on a motion to remand and determined that
for purposes of federal jurisdiction, McCray’s complaint raised substantial issues of federal
Case No. 16-cv-02092 NC
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law. Dkt. No. 22. The Court then denied defendants’ motion to dismiss, stating that it
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was premature to determine whether McCray failed to follow the CBA’s grievance and
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arbitration mechanisms. Dkt. No. 23. Defendants now move for summary judgment on all
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claims, arguing that (1) the LMRA preempts the municipal claims; (2) McCray failed to
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exhaust the grievance procedure; (3) McCray’s claims are time-barred; and (4) McCray’s
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claims fail as a matter of law because the San Jose ordinance expressly permits
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collectively-bargained waivers of the ordinance. Dkt. No. 38.
The parties do not dispute that McCray was subject to the CBA, that Marriott did
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not pay him minimum wage but did offer him other benefits, and that McCray did not
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bring a formal grievance or seek arbitration with defendants prior to filing this lawsuit.
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United States District Court
Northern District of California
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Dkt. Nos. 38, 42.
The Court concludes that the LMRA preempts the municipal claims, and thus
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McCray’s failure to exhaust administrative remedies under the CBA is fatal to his claims.
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The Court GRANTS defendants’ motion for summary judgment.
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I.
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LEGAL STANDARD
Summary judgment may be granted only when, drawing all inferences and
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resolving all doubts in favor of the nonmoving party, there is no genuine dispute as to any
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material fact. Fed. R. Civ. P. 56(a); Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014);
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Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under
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governing substantive law, it could affect the outcome of the case. Anderson v. Liberty
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Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if “the
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evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.
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Bald assertions that genuine issues of material fact exist are insufficient. Galen v. Cnty. of
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L.A., 477 F.3d 652, 658 (9th Cir. 2007).
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The moving party bears the burden of identifying those portions of the pleadings,
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discovery, and affidavits that demonstrate the absence of a genuine issue of material fact.
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Celotex, 477 U.S. at 323. Once the moving party meets its initial burden, the nonmoving
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party must go beyond the pleadings, and, by its own affidavits or discovery, set forth
Case No. 16-cv-02092 NC
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specific facts showing that a genuine issue of fact exists for trial. Fed. R. Civ. P. 56(c);
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Barthelemy v. Air Lines Pilots Ass’n, 897 F.2d 999, 1004 (9th Cir. 1990) (citing Steckl v.
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Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983)). All justifiable inferences, however,
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must be drawn in the light most favorable to the nonmoving party. Tolan, 134 S. Ct. at
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1863 (citing Liberty Lobby, 477 U.S. at 255).
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II.
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DISCUSSION
The Court first addresses whether federal or municipal law governs the analysis of
McCray’s complaint.
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Preemption of State Law Claims under LMRA
Under Section 301 of the LMRA, disputes regarding collective bargaining
United States District Court
Northern District of California
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agreements are exclusively governed by federal jurisdiction. Section 301 provides, “[s]uits
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for violation of contracts between an employer and a labor organization representing
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employees in an industry affecting commerce as defined in this chapter, or between any
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such labor organizations, may be brought in any district court of the United States having
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jurisdiction of the parties.” 29 U.S.C. § 185(a).
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In Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985), the Supreme Court
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interpreted Section 301 to provide jurisdiction not only over causes of action based on a
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CBA, but also to cases whose resolution “is substantially dependent upon analysis of the
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terms of an agreement made between the parties in a labor contract.” When state law
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claims require a court to interpret the terms of a CBA, a court must treat those claims as
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preempted by the exclusive federal jurisdiction provided by the LMRA. Id. at 211.
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“The pre-emptive force of § 301 is so powerful as to displace entirely any state
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cause of action ‘for violation of contracts between an employer and a labor organization.’”
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Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for So. Cal., 463 U.S.
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1, 23 (1983) (quoting 29 U.S.C. § 185(a)). That a plaintiff has not framed his or her state-
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law claim so that it explicitly refers to a CBA will not defeat federal preemption.
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International Bhd. of Elec. Workers v. Hechler, 481 U.S. 851, 859 n.3 (1987). If a
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plaintiff’s claims are founded on rights created by a CBA or are “substantially dependent
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on analysis of a CBA” and can only be resolved by looking to the terms of the CBA, they
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are preempted. Caterpillar Inc. v. Williams, 482 U.S. 386, 394 (1987).
The Court already concluded that the central question in this case is whether the
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CBA waiver of state and municipal law is applicable, so federal jurisdiction is appropriate.
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Dkt. No. 22; see Burnside v. Kiewit Pacific Corp., 491 F.3d 1053, 1060 (9th Cir. 2007)
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(finding that federal jurisdiction and preemption are appropriate when the Court is required
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to interpret the CBA to resolve whether the CBA or state law applies). Because the Court
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concluded that federal jurisdiction is appropriate, the Court also now finds that the LMRA
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preempts McCray’s state law causes of actions.
In doing so, the Court acknowledges that the LMRA requires the Court to start its
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United States District Court
Northern District of California
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analysis by looking at applicable federal law and the provisions in the CBA. McCray
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brings claims for (1) failure to pay minimum wages in violation of San Jose’s minimum
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wage ordinance; (2) failure to timely pay wages in violation of state law; (3) knowing and
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intentional failure to comply with itemized employee wage statements in violation of state
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law; and (4) unlawful and unfair business practices. “A claim is not preempted if it poses
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no significant threat to the collective bargaining process and furthers a state interest in
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protecting the public transcending the employment relationship.” Young v. Anthony’s Fish
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Grottos, Inc., 830 F.2d 993, 1001 (9th Cir. 1987). However, in Young, the Ninth Circuit
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dismissed plaintiff’s emotional distress claim because “[t]he claims arise out of the same
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conduct which formed the basis of her contract claim. As resolution of the claims is
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inextricably intertwined with the interpretation of the CBA, they are preempted.” Id. at
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1002. Similarly, here, all of McCray’s claims are related to the amount and process of
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work pay, which is covered by the CBA. Thus, the Court must construe McCray’s claims
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as breaches of the CBA. See Coleman v. Kaiser Permanente, No. 12-cv-02668 JST, 2014
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WL 2886293, at *4 (N.D. Cal. June 25, 2014).
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B.
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Failure to Exhaust Grievance Procedure
Because the Court concludes that it is the CBA and federal law that apply to the
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causes of action in this case, the Court agrees with defendants that McCray must first
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attempt to exhaust any mandatory or exclusive grievance procedures in the agreement.
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Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 986-87 (9th Cir. 2007).
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However, an exception to this exhaustion requirement exists where an employee
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shows that “the union representing the employee in the grievance/arbitration procedure
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[has acted] in such a discriminatory, dishonest, arbitrary, or perfunctory fashion as to
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breach its duty of fair representation.” DelCostello v. Int’l Brotherhood of Teamsters, 462
U.S. 151, 164 (1983). In this situation, an employee may bring a suit against his or her
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United States District Court
Northern District of California
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employer without having exhausted the grievance or arbitration procedure required by the
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CBA. Id. However, even in an action brought solely against an employer, the employee
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bears the burden of proving that the employer breached the terms of the CBA and that the
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labor union breached its duty of fair representation. Soremekun, 509 F.3d at 987. Where
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an employee is required to show a union’s breach of its duty of fair representation, even in
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an action brought solely against an employer, the claim is not a straightforward breach of
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contract suit under § 301, but rather “a hybrid § 301/fair representation claim amounting to
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a direct challenge to the private settlement of disputes under [the CBA].” DelCostello, 462
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U.S. at 165; accord Coleman, No. 12-cv-02668 JST, 2014 WL 2886293, at *5.
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McCray argues that the union refused to file a grievance on his behalf, and that even
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now, the Union has written as an amicus in support of defendants’ position. Dkt. No. 42 at
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24. However, McCray has not alleged that the union breached its duty of fair
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representation and there is no dispute of fact that McCray did not exhaust his contractual
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remedies under the CBA. Thus, the Court must grant defendants’ motion for summary
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judgment. Id.; Young v. Anthony’s Fish Grottos, Inc., 830 F.2d 993, 1002 (9th Cir. 1987).
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Case No. 16-cv-02092 NC
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III. CONCLUSION
The Court concludes that McCray’s complaint and its causes of action are
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preempted under federal law by the LMRA and the provisions of the CBA. Because
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McCray failed to exhaust his administrative remedies before filing this lawsuit, McCray’s
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case must be dismissed.
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The Court GRANTS defendants’ motion for summary judgment.
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IT IS SO ORDERED.
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Dated: March 22, 2017
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_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge
United States District Court
Northern District of California
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Case No. 16-cv-02092 NC
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