Spiger v. United Parcel Services, Inc.
Filing
11
ORDER REMANDING CASE. Signed by U.S. District Judge Karen E. Schreier on 12/29/15. (SLW)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
SABRINA SPIGER,
4:15-CV-04110-KES
Plaintiff,
vs.
ORDER REMANDING CASE
UNITED PARCEL SERVICES, INC.,
Defendant.
INTRODUCTION
Plaintiff, Sabrina Spiger, filed this pro se lawsuit in the Small Claims
Court of Hughes County, South Dakota. Docket 1-1. Defendant removed the
case to this court and now moves to dismiss for lack of jurisdiction. Docket 1;
Docket 4. For the reasons stated below, this case is remanded, and defendant’s
motion to dismiss is denied.
FACTUAL BACKGROUND
UPS employed Spiger from January 20, 2014 to April 6, 2015. Docket 7
at ¶ 2. She worked both as a counter clerk and as part of UPS’s air operation.
Id. The terms and conditions of Spiger’s employment were governed by the
“National Master United Parcel Service Agreement” and “Teamsters Central
Region and United Parcel Service Supplemental Agreement to the National
Master United Parcel Service Agreement” (together, hereinafter “the CBA”). Id.
at 5; Docket 7-1.
On March 25, 2015, Spiger filed a grievance complaining that someone
changed her hours and that she was not paid for all the time she had worked.
Docket 7-1 at 52. She claimed this was a violation “of contract and the laws of
the state.” Id. She requested “to be paid for all time/pay as well as penalty,
taken away pay from me resulting in lost wages and for practice to cease
immediately.” Id. During the grievance hearing, Spiger resigned. Id. She also
allegedly told UPS she would “see [it] in court.” Docket 7 at ¶7.
Spiger filed this claim on May 7, 2015 in Small Claims Court in Hughes
County. Docket 1-1. She described her claims as “DEBT OWED FOR LOST
WAGES IN AIRTIME @ $11.50 HR . . . PLUS LOST WAGES ON TIME CLOCK
REGULAR HOURS.” Id. The only law she cites in her complaint is SDCL
60-11-7, which states “In any action for the breach of an obligation to pay
wages, if a private employer has been oppressive, fraudulent, or malicious, in
the employer's refusal to pay wages due to the employee, the measure of
damages is double the amount of wages for which the employer is liable.” Id.
She claims punitive damages under this statute. Id.
Defendant removed the case to this court based on federal question
jurisdiction. Docket 1 at ¶11. Defendant argues, “Federal question jurisdiction
exists in this case based on the complete preemption of Plaintiff's claims by
Section 301 of the Labor Management Relations Act (‘LMRA’ or ‘Act’), 29 U.S.C.
§ 185(a), because Plaintiff's claims will necessarily require interpretation of the
CBA.” Id. Defendant argues that because Spiger cites a statute that provides
for punitive damages when “ ‘a private employer has been oppressive,
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fraudulent, or malicious, in the employer's refusal to pay wages due to the
employee[,]’ . . . the CBA is critical in determining what amount of wages are
due to an employee.” Id. at ¶12-13.
The CBA covers issues of wages, hours, and records as well as grievance
and arbitration procedures. Defendants supplied the National Master United
Parcel Service Agreement portion of the CBA. Docket 7-1. Article 8 discusses
the grievance procedure. Id. at 3. “All grievances and/or questions of
interpretation arising under the provisions of this [CBA] shall be submitted to
the grievance procedure for determination.” Id. Article 8, section 3 states, “If
the Master Panel is unable to reach agreement, then either party may appeal
the issue presented to final and binding arbitration.” Id. at 6.
Article 12 provides:
Upon request, an employee or the Union may inspect the record of
an employee’s time recorded on the DIAD or other device for
previous days’ work. An employee will be permitted to examine the
operation record for the current pay period for the purpose of
ascertaining his/her hours worked. If an employee has an issue
with his/her hours worked for a particular day, the Employer will
provide the employee, upon written request, with a print out of
his/her hours worked.
The Employer shall not alter the information from the DIAD board,
or information recorded through the use of any other technology,
so as to diminish an employee’s compensable time, without the
employee’s knowledge. Further, the Employer shall post for an
employee’s review, a copy of the PTE edits for each day.
Id. at 11.
Article 17 provides:
All employees covered by this Agreement shall be paid for all time
spent in service of the Employer. Rates of pay provided for by this
Agreement shall be minimums. Time shall be computed from the
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time that the employee is ordered to report for work and registers
in and until the employee is effectively released from duty.
Id. at 12.
Article 22, section 5 lays out the wage structure for part time employees.
Id. at 18. Article 40, section 6 regulates the part-time air drivers wages. Id. at
26. Article 41 regulates full-time employees’ wages. Id. at 36.
Defendant also provided the Teamsters Central Region and United Parcel
Service Supplemental Agreement portion of the CBA. Docket 7-1. Article 5,
section 1 states: “The Union and the Employer agree that there shall be no . . .
legal proceedings without first using all possible means of a settlement, as
provided for in this Agreement . . . .” Id. at 39. This section defines a grievance
as “any controversy, complaint, misunderstanding, or dispute arising as to
interpretation, application or observance of any of the provisions of this
Agreement . . . .” Id. Section 1 also details the grievance procedure. Id. at
40-42.
Article 8, section 1 states: “All regular employees covered by this
Agreement shall be paid in full each week.” Id. at 43. Article 9 regulates time
sheets and time clocks. Id. at 44. It states:
The Employer shall provide and require the employee to keep a
time sheet or trip card showing the arrival and departure at
centers or hubs . . . and same shall be turned in at the end of each
trip. . . . In all delivery operations, a daily time record shall be
maintained by the Employer at its place of business.
Id.
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Article 11 regulates part-time employees. Section 3 states: “It is
understood these employees shall be paid the appropriate rate of pay for all
hours which [sic] they perform such work.” Id. at 46. Article 12 regulates
weekly work schedules and overtime pay. Id. at 47-50.
Defendant now moves to dismiss this action for failure to state a claim
because Spiger’s claims are preempted by § 301 of the LMRA and for lack of
subject matter jurisdiction because she failed to exhaust her remedies in the
grievance process. Docket 5 (citing Fed. R. Civ. P. 12(b)(1), (6)).
LEGAL STANDARD
The court must accept the well-pleaded allegations in the complaint as
true and draw all reasonable inferences in favor of the non-moving party.
Schriener v. Quicken Loans, Inc., 774 F.3d 442, 444 (8th Cir. 2014). Civil rights
and pro se complaints must be liberally construed. Erickson v. Pardus, 551
U.S. 89, 94 (2007) (citation omitted). Even with this construction, “a pro se
complaint must contain specific facts supporting its conclusions.” Martin v.
Sargent, 780 F.2d 1334, 1337 (8th Cir. 1985); Ellis v. City of Minneapolis, 518
F. App'x 502, 504 (8th Cir. 2013).
DISCUSSION
The Eighth Circuit Court of Appeals has not analyzed the § 301
preemption doctrine as applied to a wage claim, but it analyzed the § 301
preemption doctrine generally in Williams v. Nat'l Football League, 582 F.3d 863
(8th Cir. 2009). District courts within the Eighth Circuit have applied that
analysis to wage claims. Other circuits have ruled directly on § 301 preemption
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as applied to wage claims. These circuits found similar claims both preempted
and not preempted, although a majority held these claims preempted.
I.
Eighth Circuit Analysis
In Williams, the Eighth Circuit analyzed § 301 preemption. Professional
football players tested positive for a substance banned under the CBA and were
suspended. Id. at 870. The players sued the NFL in state court alleging
numerous violations of Minnesota common law. Id. at 872. The state court
issued a temporary restraining order blocking the suspension. Id. The NFL
removed the case to federal district court. Id. The players then initiated a
separate action in federal court against the NFL and the NFL Management
Council alleging breach of contract under § 301. Id. An amended complaint
added a claim for violation of Minnesota’s Drug and Alcohol Testing in the
Workplace Act (DATWA) and Minnesota’s Consumable Products Act (CPA). Id.
The district court found that the Minnesota statutory claims were not
preempted by § 301 but the common law claims “were preempted by section
301 such that they must be construed as section 301 claims.” Id. at 873. The
district court then dismissed the § 301 claims. Because the federal claims were
all dismissed, the district court held that the Minnesota state court should
resolve the state-law claims and declined to exercise supplemental jurisdiction
over those claims. Id. at 872. Both parties appealed. Id. at 868.
The Eighth Circuit first considered the state-law claim under DATWA. Id.
at 874. Defendants argued that the court would need to interpret the CBA in
order to determine whether the procedure the NFL used in testing met or
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exceeded the protections provided by DATWA. Id. at 875. The court found that
“Section 301 preempts state-law claims that are ‘substantially dependent upon
analysis[] of a CBA . . . .” Id. (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S.
202, 220 (1985)). “However, the [United States Supreme] Court has established
that section 301 does not preempt state law claims merely because the parties
involved are subject to a CBA and the events underlying the claim occurred on
the job.” Id. “ ‘[T]he Supreme Court has distinguished those which require
interpretation or construction of the CBA from those which only require
reference to it.’ ” Id. at 876 (quoting Trustees of Twin City Bricklayers Fringe
Ben. Funds v. Superior Waterproofing, Inc., 450 F.3d 324, 330 (8th Cir. 2006)).
“In sum, section 301 does not preempt every employment dispute, and it does
not preempt all other disputes concerning CBA provisions.” Id. at 877 (citing
Miner v. Local 373, 513 F.3d 854, 865 (8th Cir. 2008)).
The Eighth Circuit applies “a two-step approach in order to determine if
the claim is sufficiently ‘independent’ to survive section 301 preemption . . . .”
Id. at 874.
First, a ‘state-law claim is preempted if it is “based on” [a] ...
provision of the CBA[,]’ meaning that ‘[t]he CBA provision at issue’
actually sets forth the right upon which the claim is based.
Second, section 301 preemption applies where a state-law claim ‘is
“dependent upon an analysis” of the relevant CBA,’ meaning that
the plaintiff's state-law claim requires interpretation of a provision
of the CBA.
Id. (quoting Bogan v. Gen. Motors Corp., 500 F.3d 828, 832 (8th Cir. 2007)).
Applying the two-part test to the DATWA claim, the court found that
DATWA added a new claim that an employee could bring if the employer fell
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below the DATWA standards. Id. at 875-76. There would be no need to consult
the CBA to resolve the DATWA claim. Id. at 876. The court would merely
“compare the facts and the procedure that the NFL actually followed with
respect to its drug testing of the Players with DATWA’s requirements for
determining if the Players are entitled to prevail.” Id.
With respect to the common law claims, plaintiffs sought recovery on
multiple grounds under the theory that once defendants knew the product
contained a banned substance, defendants had a duty to the players to
disclose this. Id. at 881. The players argued that these claims involved “purely
factual questions about the NFL's conduct and did not require interpretation of
any provision of the CBA” and that this duty existed independently from the
CBA. Id.
The court, however, found that the breach of fiduciary duty, negligence,
and gross negligence claims were preempted because “whether the NFL or the
individual defendants owed the Players a duty to provide such a warning
cannot be determined without examining the parties’ legal relationship and
expectations as established by the CBA and the Policy.” Id. The
misrepresentation claims were preempted because “the Players [could not]
demonstrate the requisite reasonable reliance to prevail on their claims without
resorting to the CBA . . . .” Id. The court would have to determine whether the
language in the CBA was ambiguous enough for plaintiffs to reasonably believe
the substance was not banned because of the lack of warning. Id. at 882
(quoting Trustees, 450 F.3d at 332). The intentional infliction of emotional
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distress claim was preempted because the court could only determine the
outrageousness of the NFL’s conduct in light of what was agreed to in the CBA.
Id.
Thus, to determine whether the state-law claims are sufficiently
independent to survive § 301 preemption, the district court must apply the
two-part test articulated in Williams.
II.
Analysis of District Court Decisions Within the Eighth Circuit
In its memorandum in support of its motion to dismiss, UPS states,
“Other courts have specifically held that state-law wage claims are preempted
under the LMRA.” Docket 5 at 10. Numerous district courts in the Eighth
Circuit have interpreted Williams and analyzed whether wage claims are
preempted by § 301. The majority have found that the claims are not
preempted. These cases, discussed below, as well as the circuit court opinions
which follow, interpret both defensive preemption raised in support of motions
to dismiss and complete preemption raised in support of motions to remand or
remove under the same two-step Williams standard explained above. Williams
concerned defensive preemption.
The courts do not explain the analytical difference between types of
preemption and generally analyze the claims the same way. But “[r]emoval
cases are construed more narrowly than originally filed cases to protect the
plaintiff's choice of forum and to protect the state courts from usurpation by
federal courts.” Hewitt v. Gerber Products Co., No. 2:13-CV-02117, 2013 WL
5786089, at *1 (W.D. Ark. Oct. 28, 2013) (citing Shamrock Oil & Gas Corp. v.
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Sheets, 313 U.S. 100, 108–09 (1941); Hurt v. Dow Chemical Co., 963 F.2d
1142, 1145 (8th Cir. 1992). “The Court must strictly construe the federal
removal statute and resolve any ambiguities about federal jurisdiction in favor
of remand.” Id. (citing Transit Casualty Co. v. Certain Underwriters at Lloyd's of
London, 119 F.3d 619, 625 (8th Cir. 1997)). Given this strict construction, if an
argument to dismiss based on § 301 preemption is rejected, it should support a
motion to remand.
In Navarro v. Am. Nat. Skyline Inc. of Mo., 998 F. Supp. 2d 833 (E.D. Mo.
2014), plaintiffs brought suit in state court against their employer for unpaid
wages. Plaintiffs alleged that they worked full shifts, worked overtime, and
accumulated work expenses, and defendants refused to pay them all of the
wages they were due. Id. at 835. Defendants removed the case to federal
district court. Id. In federal court, plaintiffs moved to remand arguing that they
were only seeking “wages, overtime and other expenses,” and interpretation of
the CBA was not necessary to resolve their claim. Id.
The district court applied the two-step analysis outlined in Williams.
With respect to the first step, the court found that plaintiffs’ claim was based
on the Missouri Wage Act (MWA), not the CBA. Id. at 837. In the second step,
the court found the claim not preempted. Defendants, like UPS, argued that
the CBA governed the parties’ “rights and responsibilities with respect to hours
worked, wages, overtime,” etc. Id. The court, however, held that these
provisions would only be relevant to compute damages. Id. “Reference to the
CBA for this limited purpose[] does not support preemption.” Id. (citing Livadas
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v. Bradshaw, 512 U.S. 107, 124–25 (1994)). The court also stated that it
“would not properly consult the CBA in order to resolve the plaintiffs’ MWA
claim.” Id. at 838. It would only compare the facts “with the requirements of
the MWA to determine whether the state statute had been violated.” Id.
In Dyke v. Hormel Foods Corp., No. 3:11-CV-03029-JAJ, 2012 WL
113738 (N.D. Iowa Jan. 13, 2012), plaintiffs sued their employer in state court
for a violation of the Iowa Wage Payment Collection Law (IWPCL). Defendants
removed the case to federal court and moved to dismiss. Id. at *1. Plaintiffs
alleged that they were not paid for hours worked, including overtime, in
violation of the IWPCL. Id. Although not clear, the case seems to concern the
“donning and doffing” of necessary protective gear and the employer’s refusal to
compensate employees for this time.
The court applied the two-step preemption analysis outlined in Williams.
Id. at *4-5. The court found that plaintiffs’ claim was not “premised on a right
provided by the CBA.” Id. at *5. The claim sought unpaid wages under the
IWPCL, which “is designed to facilitate the collection of wages owed to
employees.” Id. (citing Jeanes v. Allied Life Ins. Co., 300 F.3d 938 (8th Cir.
2002)). Thus, the claim was not preempted under the first prong.
Hormel argued that “the CBA governs plaintiffs’ and defendants’ rights
and responsibilities with respect to hours worked, wages, and overtime, and
mandates binding arbitration to resolve disputes over its meaning and
application” and that the claim was preempted because it would require
interpretation of these provisions. Id. The court stated that these provisions
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were only relevant to compute damages. Id. Like the court in Navarro, the court
in Dyke found that it “would not properly consult the CBA in order to resolve
the plaintiffs' IWPCL claim.” Id. at *6. It would only “compare the facts as
developed with the requirements of the IWPCL to determine whether the state
statute had been violated.” Id. Because the claim was based on Iowa law and
defendants’ conduct rather than the CBA, the claim was not preempted and
the court denied the motion to dismiss. Id.
In Dunn v. Dubuque Glass Co., 870 F. Supp. 2d 654 (N.D. Iowa 2012),
plaintiffs filed a complaint in Iowa state court claiming their employer failed to
pay their correct “sector wages” and failed to pay for overtime in violation of
the IWPCL. Id. at 659, 661-62. Defendants paid employees different wages
based on where they worked. Id. at 661. The plaintiffs also brought claims
under the LMRA and the Fair Labor Standards Act. Id. at 659. Defendants
removed the case to federal court. Id. The court found it had subject matter
jurisdiction based on the federal-law claims and exercised supplemental
jurisdiction over the IWPCL claims. Id. at 660.
The court found the IWPCL claims preempted by § 301. “The IWPCL
states that ‘[a]n employer shall pay all wages due its employees.’ ” Id. at 668
(quoting Iowa Code section 91A.3). The court analyzed the claim under the
two-step approach outlined in Williams. Plaintiffs cited Dyke and argued that
their claims were not preempted. Id. Defendants argued that that plaintiffs’
right to sector wages was created by the CBA. Id. at 669. The court agreed,
finding this case distinguishable from Dyke because plaintiffs did not argue
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they were not paid for all the hours they worked but rather that they were not
paid enough for work done in specific sectors. Id. The right to a certain wage
based on a “sector” was derived solely from the CBA. Id. Thus, the claim
fulfilled the first prong of the preemption test. Id.
The court also held that plaintiffs fulfilled the second prong because their
IWPCL claims required interpretation of the CBA. Id. This claim was not one
where the court referenced the CBA only to compute damages. Instead, the
court needed to interpret the “sector wages provisions of the Agreement to
determine whether Plaintiffs are entitled to particular wages in different
locations.” Id. Thus, plaintiffs’ claims fulfilled the second prong of the
preemption test. Id.
The court held, however, that plaintiffs’ overtime claims were not
preempted. Id. Plaintiffs had a statutory right to overtime pay independent of
the CBA. Id. at 667, 669. This “ ‘claim [was] based on rights arising out of a
statute designed to provide minimum substantive guarantees to individual
workers[,]’ ” which could not be abridged by the CBA. Id. at 667 (quoting
Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 737 (1981)). The
court found that the CBA would only be relevant to the issue of damages. Id.
This did not support preemption. Id.
In Hewitt v. Gerber Products Co., No. 2:12-CV-02152, 2012 WL 5410753
(W.D. Ark. Nov. 6, 2012), plaintiffs sued their employer in state court for
unpaid wages under the Arkansas Minimum Wage Act and unjust enrichment.
This case concerned compensation for time spent “donning and doffing”
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necessary gear before and after work. Id. at *1. Plaintiffs also alleged they were
sometimes forced to work through lunch breaks. Id. Defendants removed the
case to federal court. Id. Plaintiffs moved to remand. Id. The court found the
claims were not preempted and remanded the case to state court. Id. at *9.
The court applied the two-step approach outlined in Williams. In
analyzing the first step, the court found both claims to be based on Arkansas
state law rather than the CBA. Id. at *4. Defendants failed to point to a
provision of the CBA that was at issue. Id. The donning and doffing issue was
raised and rejected during CBA negotiations. Id. Because the CBA was silent
on the issue, the court held there was no provision of the CBA that needed to
be interpreted. Id.
The court also stated that “[e]ven if the CBA were to address
compensation for the disputed time periods, Plaintiffs’ claims arise
independently under state law and are therefore not completely preempted.” Id.
The claims were based on laws granting all employees a right to compensation
for time worked. Id. Plaintiffs argued that this time includes donning and
doffing, and defendants disagreed. Id. Thus, the “ultimate issue is whether or
not Plaintiffs are entitled to compensation for those activities under state law,
regardless of what is provided under the CBA.” Id. Put another way, “Plaintiffs
do not seek a determination as to the appropriate wage under the CBA; they
seek to recover wages allegedly due under state statutory and common law.” Id.
at *5. The court held that the matter was more properly decided by a state
court and granted the motion to remand. Id. at *5-6.
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Other district courts within the Eighth Circuit have held that wage
claims are preempted by § 301. UPS cites to Zupancich v. U.S. Steel Corp., No.
CIV 08-5847 ADM/RLE, 2009 WL 1474772 (D. Minn. May 27, 2009) to support
this position. Zupancich sued his employer in state court for a violation of the
Minnesota Fair Labor Standards Act (MFLSA). He alleged that U.S. Steel did
not pay him for the time between swiping-in at the security gate and arriving at
his work station. Id. at *1. U.S. Steel removed the case to federal court and
moved to dismiss based on preemption. Id.
The court found that the state-law claims were preempted. This order
was issued before Williams and does not analyze the state-law claims under the
two-step test articulated in Williams. The court explained that it “must
determine whether a claim asserting [an individual] right could be resolved on
its merits without resort to the terms of the CBA.” Id. at *3. The court found
that it could not. Id. “[T]he MFLSA specifically anticipates that employees may
bargain collectively with their employers to establish wages and conditions of
work more favorable to the employees than those required under the MFLSA.”
Id. (citing Minn. Stat. § 177.35). Therefore, the language of the statute itself
required the court to examine the CBA to determine whether the parties’
negotiated conditions of work were more favorable than those under the
MFLSA. Id. The court found the claim was not independent of the CBA and
therefore it was preempted. Id.
In Walz v. United Parcel Serv., Inc., No. 8:13CV250, 2013 WL 6061977
(D. Neb. Nov. 15, 2013), an employee sued UPS in state court alleging a
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violation of the Nebraska Wage Payment and Collection Act (NWPCA) and
seeking unpaid wages. Id. at *1. “The NWPCA requires employers to pay former
employees any ‘unpaid wages’ within a certain period of time following
separation.” Id. at *2; Neb. Rev. Stat. §§ 48-1228 – 48-1234. UPS removed the
action to federal court. Id. at *1. The district court found the claim preempted.
Id. at *2. The court held that Walz’s claim was “ ‘inextricably intertwined’ with
consideration of the terms of the CBA” because whether he had “any right to
payment from UPS under the NWPCA will substantially depend on an
interpretation of the CBA.” Id. The court denied Walz’s remand request.
As illustrated by the cases above, district courts in the Eighth Circuit
analyze the application of § 301 preemption to state-law wage claims on a case
by case basis. To determine whether a claim is preempted, a district court
must determine whether it is premised on a right provided by the CBA or by
state-law, and whether it is sufficiently independent of the CBA. Although the
CBA inherently governs the rights and responsibilities of management and
labor, state laws also affect that relationship. District courts determine whether
the CBA must be interpreted to resolve the claim, recognizing that referencing
the CBA merely to compute damages is not sufficient to support preemption.
III.
Other Circuits’ Analysis
Other circuits have directly analyzed the application of § 301 preemption
to state-law wage claims. In wage claim cases, the circuits disagree as to
whether certain state-law claims are independent of CBAs. “The boundary
between claims requiring ‘interpretation’ of a CBA and ones that merely require
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such an agreement to be ‘consulted’ is elusive.” Wynn v. AC Rochester, 273
F.3d 153, 158 (2d Cir. 2001).
Ninth Circuit cases demonstrate this case-by-case analysis. Cf. Gregory
v. SCIE, LLC, 317 F.3d 1050 (9th Cir. 2003) (holding that claims for overtime
were “entirely based on state law” and not preempted even though CBA
governed wages and overtime); with Firestone v. S. California Gas Co., 219 F.3d
1063 (9th Cir. 2000) (holding that because different rates of pay were
determined by the CBA, it was impossible to determine whether plaintiffs’
rights had been violated without interpretation of the CBA).
In other circuits, state-law wage claims have been held preempted. See,
e.g., In Barton v. House of Raeford Farms, Inc., 745 F.3d 95 (4th Cir.) cert.
denied, 135 S. Ct. 160 (2014) (holding state-law claim for wages for time spent
donning and doffing protective gear, etc. preempted because plaintiffs only
disagreed with defendant’s “interpretation of how to calculate their ‘hours
worked’ under the CBA”); Cavallaro v. UMass Mem'l Healthcare, Inc., 678 F.3d 1
(1st Cir. 2012) (holding a state-law wage claim preempted because it relied on
amount of wages provided in the CBA even if those amounts were altered or
enlarged by state law and “various ‘peculiarities of industry-specific wage and
benefit structures’ embodied in the CBA” needed to be applied and construed
to resolve minimum wage claims); Mowry v. United Parcel Serv., 415 F.3d 1149
(10th Cir. 2005) (holding a state-law wage claim preempted because the court
would have to resolve issues regulated by the CBA such as what work plaintiff
performed and when, whether he was paid or underpaid, and the amount of
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the shortfall to resolve the complaint); Vera v. Saks & Co., 335 F.3d 109 (2d
Cir. 2003) (holding a claim that an employer violated state statutory and
common law by taking commissions for returned shoes out of employee’s pay
check was preempted when plaintiff directly challenged the legality of the
provision of the CBA discussing return charges.); Atchley v. Heritage Cable
Vision Associates, 101 F.3d 495 (7th Cir. 1996) (holding a state-law claim that
employer failed to pay wages due within ten days preempted because the wages
were based on the ratification date of the CBA and the CBA need to be
interpreted to determine that date).
The Third Circuit has found wage claims not preempted. See, e.g., New
Jersey Carpenters & the Trustees Thereof v. Tishman Const. Corp. of New
Jersey, 760 F.3d 297 (3d Cir. 2014) (holding a claim that employer did not pay
plaintiffs fringe benefits as required by statute was not preempted because it
was premised on an independent state-law created right).
These cases show other circuits use the same fact-intensive approach as
district courts in the Eighth Circuit. As the Seventh Circuit explained, “[Some]
circuits require [a] case-by-case analysis of the state-law claim as it relates to
the CBA. As one would expect in case-by-case analysis, in some situations
preemption is found and in others it is not.” In re Bentz Metal Products Co., Inc.,
253 F.3d 283, 289 (7th Cir. 2001). A case-by-case approach is necessary
because each claim is brought under the laws of different states or different
CBAs. This court uses this fact specific approach when applying the two-part
test found in Williams.
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IV.
Spiger’s Claim Is Not Preempted by § 301
Spiger’s complaint is extremely short. The only law she cites to support
her claim to recover wages is SDCL 60-11-7, which authorizes an award of
double damages to employees who were denied pay by private employers that
engaged in oppressive, fraudulent, or malicious conduct. Docket 1-1. Thus, the
statute implies an obligation to pay wages. South Dakota Codified Laws Title
60, chapter 11 dictates a scheme of “Wages, Hours, and Conditions of
Employment.” The provisions relevant to the present case are the minimum
wage provisions and SDCL 60-11-7. As explained, SDCL 60-11-7 does not
create an obligation to pay wages, but its language necessarily assumes that
such an obligation exists. South Dakota law also guarantees a minimum wage
of eight dollars and fifty cents an hour, SDCL 60-11-3, and that a person paid
less than the minimum wage “shall be entitled to recover the full amount
measured by said minimum wage and costs, notwithstanding any agreement to
work for less.” SDCL 60-11-4. Under South Dakota law, employees are entitled
to be paid for their work.
Under the first prong of the preemption test in Williams, the court must
determine whether Spiger’s state-law claim is based on a provision of the CBA
or if the CBA provision sets forth the right upon which the claim is based.
Williams, 582 F.3d at 874. Spiger does not mention the CBA in her complaint.
She claims she was not paid for hours that she worked, a right she is
guaranteed by South Dakota law. Therefore, the first prong of the preemption
test found in Williams is not met.
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Under the second prong, the court must determine whether Spiger’s
state-law claim is dependent upon analysis of the CBA or requires
interpretation of a provision in the CBA. Id. UPS points to numerous provisions
in the CBA which govern the wages and hours of employees and argues that
the CBA provisions must be interpreted to decide Spiger’s claim. Docket 5. UPS
does not, however, explain why these provisions must be interpreted. Spiger
has a right to be paid for her work under South Dakota law. This right is not
granted by the CBA. Because this right is independent of the CBA and Spiger
claims damages under this right, there is no need to interpret the CBA to
determine the merit of her claim.
The CBA does not grant Spiger the right to be paid for her work. It is true
that it provides, “All employees covered by this Agreement shall be paid for all
time spent in service of the Employer.” Docket 7-1 at 12. This provision,
however, is not the basis for Spiger's right to be paid for her work. This
argument implies UPS employees could negotiate to not be paid for their work
even though South Dakota law forbids this. This argument has been rejected
by the Supreme Court: “Clearly, § 301 does not grant the parties to a collectivebargaining agreement the ability to contract for what is illegal under state law.”
Lueck, 471 U.S. at 212.
The wage amounts in the complaint do not need to be interpreted to
determine the merits of Spiger’s claim. The complaint seeks the wage amounts
of $10.50 and $11.50 per hour. Docket 1-1 at 2. The CBA describes for what
type of work the hourly rates are available. Docket 7-1. UPS argues that the
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court must interpret the CBA because these wage levels are dictated by the
CBA. Docket 5 at 9. The CBA provisions, however, are only necessary for
purposes of calculating damages. The right to be paid a wage under South
Dakota law is distinct from the right to be paid a certain wage under a CBA.
Thus, a claim for the right to be paid a wage is independent of the CBA. UPS
does not offer a reason why the CBA provisions providing these wages must be
interpreted. It also does not offer a possible interpretation of these wage
amounts that would affect the court’s analysis. The wages levels are stated in
the CBA, but the heart of this matter is whether Spiger was paid at all for
hours she worked. This is not sufficient to preempt her claims.
This case is distinguishable from the cases in which courts found a
state-law wage claim preempted. The particularity of the “sector” wages in
Dunn is not present here. Spiger does not argue that she is entitled to a certain
wage for doing certain work, only that she was not paid at all. This claim is
“ ‘based on rights arising out of a statute designed to provide minimum
substantive guarantees to individual workers[,]’ ” which cannot be abridged by
a CBA. Dunn, 870 F. Supp. 2d at 667 (quoting Barrentine, 450 U.S. at 737).
Like Hewitt, the “ultimate issue” is whether Spiger is entitled to any wage for
the contested hours. The CBA is only referenced for damages.
The issue in Zupancich is not present. Zupancich brought his claim
under a state law which “specifically anticipate[d]” that employees may
negotiate better conditions of employment. Zupancich, 2009 WL 1474772 at *3.
Here, the South Dakota statutes do not contain this language. It is also legally
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immaterial whether UPS employees negotiated a wage higher than the
minimum wage because Spiger claims she was not paid at all. The bargained
for wage is only relevant to the factual issue of calculating damages.
Zupancich was decided before Williams and does not use the two-step
test that other courts use. Walz also does not apply this test, and the
discussion in Walz relevant to this case is short and perfunctory.
Cases from other circuits do not offer a clear rule of law to provide
guidance in this matter. While a majority of courts have held state-law wage
claims preempted, not all have, and at least the Seventh and Ninth have
expressly stated that preemption must be analyzed on a case-by-case basis. In
the Eighth Circuit, most district courts have found claims similar to Spiger’s
not preempted under precedent controlling in this court.
V.
Remand
In its notice of removal, UPS cites only § 301 preemption as a basis of
jurisdiction. Docket 1 at ¶11. This court determines Spiger’s claims are not
preempted. “A federal court has jurisdiction to consider its own subject matter
jurisdiction.” Robins v. Ritchie, 631 F.3d 919, 930 (8th Cir. 2011). All doubts
about federal jurisdiction must be resolved in favor of remand. Griffioen v.
Cedar Rapids & Iowa City Ry. Co., 785 F.3d 1182, 1192 (8th Cir. 2015)
(quoting Cent. Iowa Power Coop. v. Midwest Indep. Transmission Sys. Operator,
Inc., 561 F.3d 904, 912 (8th Cir. 2009)). Under 28 U.S.C. 1447(c), when a case
is removed improperly due to a lack of subject matter jurisdiction, remand may
occur without a motion and at any stage of the proceedings. Wisc. Dep't of Corr.
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v. Schacht, 524 U.S. 381, 392 (1998); Cascades Dev. of Minnesota, LLC v. Nat'l
Specialty Ins., 675 F.3d 1095, 1098 (8th Cir. 2012). “ ‘If the district court
concludes that it does not have subject matter jurisdiction, it must remand the
case.’ ” Hubbard v. Federated Mut. Ins. Co., 799 F.3d 1224, 1226-27 (8th Cir.
2015) (quoting Junk v. Terminix Int'l Co., 628 F.3d 439, 444-45 (8th Cir. 2010)).
Because of this precedent, and for the reasons discussed above, this case
is remanded back to state court. Accordingly, it is ORDERED
1. Defendant’s motion to dismiss (Docket 4) is denied.
2. Plaintiff’s complaint (Docket 1) is REMANDED to Hughes County
Small Claims Court and the clerk of this court shall mail a certified
copy of this order to that Court.
Dated December 29, 2015.
BY THE COURT:
/s/Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE
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