Alfaro et al v. San Diego, City of et al
Filing
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ORDER Denying 6 Motion to Dismiss for Failure to State a Claim Upon Which Relief May Be Granted. Defendants must answer the complaint within 30 days of the date of this order. Signed by Judge Marilyn L. Huff on 6/12/2017. (ag)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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MARCUS ALFARO, an individual;
DERRIN AUSTIN, an individual; and
PIPER DENLINGER, an individual,
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Case No.: 3:17-cv-00046-H-KSC
Plaintiffs,
v.
CITY OF SAN DIEGO, a California
Municipal Corporation; and BRIAN
FENNESSY, individually and in his
official capacity as Chief of the San
Diego Fire-Rescue Department,
ORDER DENYING MOTION TO
DISMISS FOR FAILURE TO STATE
A CLAIM UPON WHICH RELIEF
MAY BE GRANTED
[Doc. No. 6]
Defendants.
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On January 10, 2017, Plaintiffs filed a complaint against Defendants City of San
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Diego and Brian Fennessy, Chief of the San Diego Fire-Rescue Department (“SDFD”).
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(Doc. No. 1.) Plaintiffs assert two claims for relief under the Fair Labor Standards Act, 29
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U.S.C. §§ 201-219 (“FLSA”). The first claim is for unpaid overtime wages and the second
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is for retaliation.
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On May 1, 2017, Defendants filed a motion to dismiss for failure to state a claim
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pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. No. 6.) Plaintiffs
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filed an opposition on May 25, 2017, and Defendants filed a reply on June 1, 2017. (Doc.
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3:17-cv-00046-H-KSC
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Nos. 7, 8.) On June 2, 2017, pursuant to its discretion under Local Rule 7.1(d)(1), the Court
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determined that the motion was fit for resolution without oral argument and vacated the
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scheduled hearing. (Doc. No. 9.) For the reasons that follow, the Court denies the motion.
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Background
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According to the complaint, Plaintiffs are fire captains within SDFD, and they each
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previously held the position of emergency radio operator (“ERO”). (Doc. No. 1 at 3, ¶ 11.)
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While they were employed as EROs, Plaintiffs purportedly worked 56 hours per week and
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were not paid overtime. (Id. at 4, ¶¶ 18-19.) Plaintiffs contend that they are entitled to
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overtime pay for their work as EROs pursuant to the Ninth Circuit’s published opinion,
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Haro v. City of Los Angeles, 745 F.3d 1249 (9th Cir. 2014). According to Plaintiffs, they
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complained about their missing overtime wages and were then dismissed from their ERO
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positions in retaliation for their complaints. (Doc. No. 1 at 5-6, ¶ 24.)
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The complaint states that Chief Fennessy has ultimate decision-making authority
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over SDFD personnel matters. (Id. at 2, ¶ 4.) According to Plaintiffs, the City of San Diego
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acted by and through its appointing authority for SDFD, Chief Fennessy, in failing and
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refusing to pay overtime. (Id. at 4-5, ¶ 20.) In opposition, Defendants request judicial notice
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of four exhibits: a memorandum of understanding (“MOU”) between the city and the
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firefighters’ union and three ordinances setting compensation schedules for officers and
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employees of the city. (Doc. Nos. 6-2 to 6-6.) These exhibits purportedly establish that the
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city council sets rates of pay and quantity of hours for EROs. (Doc. No. 6-1 at 11-12.)
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Discussion
I.
Legal Standards
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A complaint must satisfy the pleading requirements of Federal Rule of Civil
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Procedure 8 to evade dismissal under a Rule 12(b)(6) motion. Landers v. Quality
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Commc’ns, Inc., 771 F.3d 638, 640-41 (9th Cir. 2014). Rule 8(a) requires “a short and
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plain statement of the claim showing that the pleader is entitled to relief, in order to give
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the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell
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Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation marks and alteration notations
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omitted). “To survive a motion to dismiss, a complaint must contain sufficient factual
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matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Hartmann
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v. Cal. Dept. of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013) (quoting Ashcroft v.
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Iqbal, 556 U.S. 662, 678 (2009)). “A claim has facial plausibility when the plaintiff pleads
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factual content that allows the court to draw the reasonable inference that the defendant is
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liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “Factual allegations must be
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enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555
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(citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed.
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2004)).
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II.
Analysis
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A.
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Defendants argue that Chief Fennessy is not a proper defendant in this action because
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he is not an “employer” as the term has been applied under the FLSA. (Doc. No. 6-1 at 10.)
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The FLSA defines “employer” to “include[] any person acting directly or indirectly in the
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interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). The term
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“employer” is to be given an “expansive interpretation” in order to “effectuate the FLSA’s
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broad remedial purposes.” Real v. Driscoll Strawberry Assocs., 603 F.2d 748, 754 (9th Cir.
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1979). It is possible for two or more employers to jointly employ someone for purposes of
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the FLSA. 29 C.F.R. § 791.2; see, e.g., Falk v. Brennan, 414 U.S. 190, 195 (1973). Whether
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there is an employment relationship under the FLSA is tested by “‘economic reality’ rather
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than ‘technical concepts.’” Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 33
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(1961).
The Definition of Employer Under the FLSA
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The Ninth Circuit has elaborated on the economic reality test, directing lower courts
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“to consider the totality of the circumstances.” Hale v. State of Ariz., 993 F.2d 1387, 1394
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(9th Cir. 1993) (citing Bonnette v. California Health and Welfare Agency, 704 F.2d 1465,
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1470 (9th Cir. 1983)). The totality of the circumstances include “whether the alleged
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employer has the power to hire and fire the employees, supervises and controls employee
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work schedules or conditions of employment, determines the rate and method of payment,
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and maintains employment records.” Id. “While these factors ‘provide a useful framework
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for analysis . . ., they are not etched in stone and will not be blindly applied.’” Id.
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Defendants cite an out-of-district summary judgment opinion to argue that Chief
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Fennessy cannot be an employer because he did not control the “purse strings.” (Doc. No.
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6-1 at 12.) In other words, he purportedly did not set Plaintiffs’ quantity of hours or rate of
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pay. (Id.) But the Chief’s ability to control the purse strings cannot be the sole factor in
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determining whether he is an employer under the statute. The FLSA prescribes conduct for
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employers that involve other issues than overtime pay. For example, the statute mandates
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conduct for employers regarding child labor (29 U.S.C. § 212(c)), record-keeping (id.
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§ 211(c)), retaliation (id. §§ 215(a)(3), 2161), and the Patient Protection and Affordable
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Care Act (id. §§ 218b, 218c). If the definition of employer was solely dependent on power
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over the purse strings, then many managers would not be liable under the FLSA for
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violations of these provisions. That outcome would thwart the “broad remedial purposes”
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of the FLSA. Real, 603 F.2d at 754. Indeed, these broad remedial purposes are precisely
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the reason that the term employer is to be “broadly construed.” Id. Because of these broad
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remedial purposes, the Ninth Circuit outlined a four-factor test, not a one-factor “purse
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strings” test. See Hale, 993 F.2d at 1394.
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In the complaint, Plaintiffs allege that Chief Fennessy has the ultimate decision-
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making authority over SDFD personnel matters. (Doc. No. 1 at 2, § 4.) At the motion to
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dismiss stage, “the court must presume all factual allegations of the complaint to be true
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and draw all reasonable inferences in favor of the nonmoving party.” Usher v. City of Los
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Angeles, 828 F.2d 556, 561 (9th Cir. 1987) (citations omitted). It is a reasonable inference
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that, by exercising ultimate decision-making authority over personnel matters, Chief
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Fennessy had the power to hire and fire Plaintiffs, control their work schedules and
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conditions of employment (even if not their quantity of hours), and access their
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Section 215(a)(3) prohibits any “person” from retaliating, but Section 216 defines penalties for
retaliation in terms of the “employer.”
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employment records. See Hale, 993 F.2d at 1394. Thus, Plaintiffs have alleged enough
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facts, at the motion to dismiss stage, to meet three of the four factors of the economic reality
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test. Defendants may submit evidence to challenge these allegations at summary judgment.
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The thrust of Defendants’ argument is that a person cannot be liable for failing to
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pay overtime if he has no power to pay the overtime. That may be true. In order to be liable,
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an “employer must have an opportunity to comply with the provisions of the FLSA.”
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Forrester v. Roth’s I. G. A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir. 1981). But that
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issue goes to the question of liability, not to the definition of employer under the statute.
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Regardless, at this early stage, Defendants have not established that Chief Fennessy had no
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power to facilitate overtime pay. The documents offered for judicial notice establish that
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the city council sets the pay scale for city employees and that the MOU sets the quantity of
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hours for fire suppression companies. (See, e.g., Doc. Nos. 6-3 at 22, 6-4 at 6.) But the
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documents do not conclusively establish that Chief Fennessy had absolutely no power or
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discretion to affect the decision to provide overtime pay to these Plaintiffs. It would be
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more appropriate to evaluate this issue at the summary judgment stage when the record is
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more fully developed. Accordingly, the Court denies the motion to dismiss on this basis.
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The Court also declines Defendants’ request for judicial notice because the attached
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documents would not alter the Court’s decision.
California’s Claim Presentation Requirement
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B.
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Defendants argue that Plaintiffs’ second claim for relief should be dismissed for
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failure to comply with the State of California’s claim presentation requirement. (Doc. No.
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6-1 at 14-16.) The second claim for relief is for retaliation under the FLSA, a federal statute.
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A state may not impose additional conditions upon the exercise of a federal right. Felder
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v. Casey, 487 U.S. 131, 152 (1988); Willis v. Reddin, 418 F.2d 702, 704-05 (9th Cir. 1969)
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(“California may not impair federally created rights or impose conditions upon them.”).
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Defendants have cited no cases in which a court required a plaintiff to comply with a state
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claim presentation requirement in order to vindicate a federal right. Accordingly, the Court
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denies the motion to dismiss on this basis.
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C.
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Defendants argue that there is a factual dispute regarding Plaintiffs’ hourly wage
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rates. (Doc. No. 6-1 at 18-19.) Thus, according to Defendants, if Plaintiffs prevail on their
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claims, the Court will have to interpret the MOU to compute damages. (Id.) Defendants
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therefore contend that Plaintiffs were required to exhaust the remedies provided for in the
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MOU prior to initiating this action in federal court. (Id. at 16-19.)
Exhaustion of MOU Remedies
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“The rule for determining whether a plaintiff is required to exhaust remedies
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provided for in a collective bargaining agreement before bringing the claim in federal court
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is well established.” Collins v. Lobdell, 188 F.3d 1124, 1127 (9th Cir. 1999). If the claim
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is based on rights arising from the collective bargaining agreement, the plaintiff is required
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to exhaust remedies created by the agreement. Barrentine v. Arkansas–Best Freight Sys.,
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Inc., 450 U.S. 728, 736-37 (1981); Wren v. Sletten Constr. Co., 654 F.2d 529, 535 (9th
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Cir.1981). But “if the claim arises from statutory rights, the plaintiff is not required to
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exhaust agreement remedies.” Collins, 188 F.3d at 1127 (citations omitted). “[S]tatutory
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rights under the FLSA are ‘guarantees to individual workers that may not be waived
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through collective bargaining.’” Id. (quoting Local 246 Util. Workers Union v. Southern
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Cal. Edison Co., 83 F.3d 292, 297 (9th Cir.1996)).
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Defendants argue that if any portion of Plaintiffs’ claims require interpretation of an
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MOU, then Plaintiffs are required to exhaust their remedies under the MOU prior to
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initiating this action in federal court. (Doc. No. 6-1 at 18.) The Court disagrees. The key
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issue is whether the claims are based on rights arising from the FLSA or from the MOU.
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See Collins, 188 F.3d at 1127. The complaint does not allege violations of the MOU. (Doc.
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No. 1 at 7-8.) While the Court may need to look to the MOU for damages computation, the
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MOU does not create the rights at issue here. Those rights—to receive overtime pay and
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be free from retaliation—are created by the FLSA. See 29 U.S.C. §§ 207, 215(a)(3). Those
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rights therefore arise from the FLSA. See Collins, 188 F.3d at 1127 (rights arose under the
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FLSA where complaint alleged violations of the FLSA and did not allege violations of the
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collective-bargaining agreement); cf. Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1073
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(9th Cir. 2007) (claims were not “substantially dependent” on labor agreement solely
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because of “the mere need to ‘look to’” the labor agreement for damages computation)
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(quoting Livadas v. Bradshaw, 512 U.S. 107, 125 (1994)).
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Furthermore, even if Plaintiffs’ claims did present a claim arising under the MOU,
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Plaintiffs would still be entitled to take their case straight to federal court as long as their
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claims also arose under the FLSA. See Collins v. Lobdell, 188 F.3d 1124, 1127 (9th Cir.
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1999) (citations omitted) (“exhaustion of remedies provided for in a collective bargaining
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agreement is not required even where a claim based on statutory rights also presents a claim
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under the agreement”); Albertson’s, Inc. v. United Food & Commercial Workers Union,
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AFL-CIO & CLC, 157 F.3d 758, 762 (9th Cir. 1998) (“[W]e hold that employees covered
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by a collective bargaining agreement are entitled to take their FLSA claims to court
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regardless of whether those claims may also be covered by the grievance-arbitration
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procedure.”). Accordingly, the Court denies the motion to dismiss on this basis.
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Conclusion
The Court denies Defendants’ motion to dismiss. Defendants must answer the
complaint within 30 days of the date of this order.
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IT IS SO ORDERED.
DATED: June 12, 2017
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MARILYN L. HUFF, District Judge
UNITED STATES DISTRICT COURT
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